Table of Contents
- Why To Invest in Debt Mutual Funds?
- Risks In Debt Mutual Funds
- Debt Mutual Fund Taxation
- Best Debt Mutual Funds in India for Investments FY 22 - 23
- Top 5 Liquid Mutual Funds
- Top 5 Ultra Short Term Bond Mutual Funds
- Top and Best Floating Rate Mutual Funds
- Top 5 Best Money Market Mutual Funds
- Top 5 Short Term Bond Mutual Funds
- Top 5 Medium to Long Term Bond Mutual Funds
- Top 5 Banking and PSU Debt Mutual Funds
- Top 5 Credit Risk Mutual Funds
- Top 5 Dynamic Bond Mutual Funds
- Top 5 Corporate Bond Mutual Funds
- Top 5 Gilt Mutual Funds
- How to Evaluate Best Debt Mutual Funds
- Things to consider as an investor
- How to Invest in Best Debt Funds Online?
- Conclusion
Top 5 Funds
Best Debt Mutual Funds 2022
Best debt funds vary according to the tenor of investment of the investor. Investors need to be clear on their time horizon of investment when selecting the best Debt fund for their investment and also factor in the interest rate scenario.
For investors with a very short holding period, say for a couple of days to a month, Liquid Funds and ultra-short term funds may be relevant. When the time horizon is one to two years then short-term funds may be the desired vehicle. For longer tenors, for more than 3 years, long-term debt funds are the most preferred instruments by investors, especially during falling interest rates. Above all, debt funds have proved to be less risky than equities when looking for short-term investments, however, the volatility of long-term income funds may match that of equities.
As debt funds invest in fixed income instruments like government securities, treasury bills, corporate Bonds, etc., they have the capacity of generating consistent and regular returns over time. However, there are many qualitative and quantitative factors that one needs understand before selecting the best debt funds to invest, viz - AUM, Average Maturity, Taxation, the credit quality of the portfolio, etc. Below we have listed the top 5 best debt funds to invest across the various categories of debt funds - Best Liquid Funds, best ultra short-term funds, best short-term funds, best long-term funds and best Gilt Funds to invest in 2022 - 2023.
Why To Invest in Debt Mutual Funds?
a. Debt funds are considered to be an ideal investment for generating regular income. For example, choosing dividend payout can be an option for regular income.
b. In debt funds, investors can withdraw required money from the investment at any point in time and can let the remaining money stay invested.
c. Since debt funds largely invest in government securities, corporate debt and other securities like treasury bills, etc., they are not affected by equity market volatility.
d. If an investor is planning to achieve short-term Financial goals or invest for short periods then debt funds can be a good option. Liquid funds, ultra short-term funds, and short-term income funds may be the desired options.
e. In debt funds, investors can generate fixed income every month by starting a Systematic Withdrawal Plan (SWP is a reverse of SIP / STP) to withdraw a fixed amount on a monthly basis. Also, you can change the amount of the SWP when required.
Risks In Debt Mutual Funds
While Investing in debt funds, investors should be cautious about two major risks associated with them- credit risk and interest risk.
a. Credit Risk
A credit risk arises when a company that has issued the debt instruments does not make regular payments. In such cases, it has a major impact on the fund, depending on how much portion the fund has in the portfolio. Hence, it is suggested to be in debt instruments with a rating higher credit rating. An AAA rating is considered to be the highest quality with little or negligible payment Default Risk.
b. Interest Risks
The interest rate risk refers to a change in the bond price due to the change in the prevailing interest rate. When the interest rate rise in the economy the bond prices fall down and vice versa. The higher the maturity of the funds’ portfolio, the more prone it is to the interest rate risk. So in a rising interest rate scenario, it is advisable to go for lower maturity debt funds. And the reverse in a falling interest rate scenario.
Debt Mutual Fund Taxation
Tax implication on debt funds is computed in the following manner-
a. Short Term Capital Gains
If the holding period of a debt investment is less than 36 months, then it is classified as a short-term investment and these are taxed as per individual's tax slab.
b. Long Term Capital Gains
If the holding period of debt investment is more than 36 months, then it is classified as a long-term investment and is taxed at 20% with an indexation benefit.
| Capital Gains | Investment Holding Gains | Taxation |
|---|---|---|
| Short Term Capital Gains | Less than 36 months | As per individual's tax slab |
| Long Term Capital Gains | More than 36 months | 20% with indexation benefits |
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Best Debt Mutual Funds in India for Investments FY 22 - 23
Top 5 Liquid Mutual Funds
Top Liquid funds with AUM/Net Assets > 10,000 Crore.
Fund NAV Net Assets (Cr) Min Investment 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Liquid Fund Growth ₹2,361.02
↑ 0.32 ₹28,934 500 0.3 0.9 1.8 3.4 3.3 3.88% 1M 12D 1M 13D Aditya Birla Sun Life Liquid Fund Growth ₹341.951
↑ 0.04 ₹32,899 5,000 0.2 0.8 1.7 3.4 3.3 4.15% 1M 13D 1M 13D Tata Liquid Fund Growth ₹3,347.91
↑ 0.41 ₹13,843 5,000 0.2 0.8 1.7 3.4 3.2 4.09% 1M 15D 1M 16D ICICI Prudential Liquid Fund Growth ₹314.54
↑ 0.04 ₹39,902 500 0.2 0.8 1.7 3.4 3.2 3.91% 1M 22D 1M 25D Nippon India Liquid Fund Growth ₹5,186.81
↑ 0.64 ₹25,763 100 0.2 0.8 1.7 3.4 3.2 4.07% 1M 15D 1M 17D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Ultra Short Term Bond Mutual Funds
Top Ultra Short Bond funds with AUM/Net Assets > 1,000 Crore.
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Savings Fund Growth ₹441.001
↑ 0.06 ₹16,109 1,000 0.6 1.7 3.7 5.7 3.9 5.04% 5M 26D 6M UTI Ultra Short Term Fund Growth ₹3,464.8
↑ 0.16 ₹2,506 5,000 0.5 1.4 5.8 4.3 6.1 4.65% 4M 15D 4M 20D ICICI Prudential Ultra Short Term Fund Growth ₹22.4725
↑ 0.00 ₹13,266 5,000 0.7 1.6 3.6 5.6 4 4.61% 3M 4D 3M 25D SBI Magnum Ultra Short Duration Fund Growth ₹4,848.9
↑ 0.33 ₹14,029 5,000 0.5 1.5 3.2 5 3.4 4.54% 5M 5D 5M 16D Kotak Savings Fund Growth ₹34.9552
↑ 0.00 ₹12,596 5,000 0.6 1.5 3.2 4.9 3.2 4.66% 4M 17D 5M 16D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top and Best Floating Rate Mutual Funds
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Floating Rate Fund - Long Term Growth ₹277.943
↓ 0.00 ₹15,937 1,000 0.7 1.5 3.5 6.2 3.6 5.24% 7M 2D 1Y 4M 28D ICICI Prudential Floating Interest Fund Growth ₹336.956
↓ -0.55 ₹16,087 5,000 0.3 0.2 3.1 6.3 3.8 5.87% 1Y 4M 2D 7Y 8M 16D Nippon India Floating Rate Fund Growth ₹36.0644
↓ 0.00 ₹14,223 5,000 -0.1 0.8 2.9 6.9 3.7 5.39% 1Y 1M 10D 1Y 6M 25D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Best Money Market Mutual Funds
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Money Manager Fund Growth ₹296.668
↑ 0.02 ₹15,495 1,000 0.6 1.6 3.5 5.5 3.8 4.75% 5M 12D 5M 12D UTI Money Market Fund Growth ₹2,472.96
↑ 0.24 ₹10,561 10,000 0.8 1.7 3.6 5.3 3.7 4.47% 4M 6D 4M 4D Kotak Money Market Scheme Growth ₹3,609.56
↑ 0.34 ₹15,402 5,000 0.8 1.7 3.6 5.1 3.7 4.58% 4M 13D 4M 13D ICICI Prudential Money Market Fund Growth ₹304.713
↑ 0.03 ₹13,002 500 0.7 1.6 3.4 5.2 3.7 4.6% 6M 18D 6M 28D L&T Money Market Fund Growth ₹21.4288
↑ 0.00 ₹1,053 10,000 0.5 1.3 2.8 4.9 2.9 4.55% 5M 16D 5M 19D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Short Term Bond Mutual Funds
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity PGIM India Short Maturity Fund Growth ₹36.4867
↓ 0.00 ₹29 -0.3 0.4 2 3.1 3 4.89% 1Y 18D 1Y 2M 26D UTI Short Term Income Fund Growth ₹25.487
↑ 0.00 ₹2,510 0 0.7 7.6 4.2 8.4 5.62% 1Y 3M 18D 2Y 2M 26D Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹38.1091
↓ 0.00 ₹8,484 0.1 0.9 3.1 7 3.8 5.94% 1Y 4M 28D 2Y 1M 6D ICICI Prudential Short Term Fund Growth ₹47.6618
↓ -0.03 ₹16,623 0.1 0.5 2.8 7 3.9 5.74% 1Y 5M 23D 4Y 4D Nippon India Short Term Fund Growth ₹42.3539 ₹8,160 -0.7 0.3 2.6 6.6 4.4 5.8% 1Y 7M 28D 1Y 11M 19D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Medium to Long Term Bond Mutual Funds
Top Medium to Long Term Bond funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity SBI Magnum Income Fund Growth ₹56.1214
↓ -0.05 ₹1,632 -1.4 -1.1 1.4 7.5 3.6 6.68% 3Y 9M 25D 6Y 4M 17D Aditya Birla Sun Life Income Fund Growth ₹100.576
↓ -0.04 ₹1,566 -1.9 -1.2 1.5 7.2 4 6.4% 2Y 8M 23D 3Y 1M 24D ICICI Prudential Bond Fund Growth ₹31.4555
↓ -0.02 ₹2,707 -1.4 -1.4 0.6 6.7 2.9 5.71% 2Y 9M 22D 5Y 3M 11D Kotak Bond Fund Growth ₹61.6608
↓ -0.08 ₹1,653 -1.9 -1.7 1.2 6.4 2.4 6.07% 2Y 10M 6D 7Y 1M 28D HDFC Income Fund Growth ₹46.7036
↓ -0.04 ₹537 -2.1 -2.3 -0.6 4.9 2.1 6.51% 3Y 11M 5D 6Y 7M 12D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Banking and PSU Debt Mutual Funds
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity UTI Banking & PSU Debt Fund Growth ₹17.6067
↑ 0.01 ₹293 5.7 6.6 8.3 7.7 2.8 5.19% 1Y 4M 10D 1Y 7M 20D HDFC Banking and PSU Debt Fund Growth ₹18.5067
↓ 0.00 ₹6,564 -0.3 0.3 2.6 6.9 3.7 5.62% 1Y 11M 3D 3Y 4M 15D ICICI Prudential Banking and PSU Debt Fund Growth ₹26.0954
↓ -0.02 ₹10,510 0.3 0.5 3.3 6.9 4.2 5.77% 2Y 2M 12D 5Y 10M 2D Kotak Banking and PSU Debt fund Growth ₹52.3515
↓ -0.03 ₹7,845 -0.5 0.2 2.9 7.1 3.9 5.8% 2Y 2M 26D 4Y 11M 1D Aditya Birla Sun Life Banking & PSU Debt Fund Growth ₹294.697
↓ -0.05 ₹12,063 -0.2 0.6 2.8 7.1 3.6 5.51% 1Y 8M 12D 2Y 6M Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Credit Risk Mutual Funds
Top Credit Risk funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Axis Credit Risk Fund Growth ₹17.0823
↓ 0.00 ₹719 -0.3 0.8 3.6 5.3 6 6.55% 1Y 5M 1D 1Y 9M 14D SBI Credit Risk Fund Growth ₹36.0028
↑ 0.00 ₹3,093 0 1 3.9 6.6 5 6.45% 1Y 6M 29D 2Y 5M 16D HDFC Credit Risk Debt Fund Growth ₹19.2416
↑ 0.01 ₹8,925 -0.7 0.4 3.8 7.8 7 7.2% 2Y 2M 25D 2Y 11M 1D Kotak Credit Risk Fund Growth ₹23.9532
↓ -0.01 ₹1,690 -2.6 -1.6 1.3 5.3 5.3 6.44% 1Y 7M 10D 2Y 5M 16D UTI Credit Risk Fund Growth ₹13.8065
↑ 0.02 ₹519 0 1 20.2 -6.2 21.5 6.55% 1Y 8M 8D 2Y 4M 6D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Dynamic Bond Mutual Funds
Top Dynamic Bond funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity ICICI Prudential Long Term Plan Growth ₹28.9251
↓ -0.03 ₹5,993 -0.7 -0.4 2.1 7.5 4.3 6.39% 2Y 3M 14D 5Y 10M 17D SBI Dynamic Bond Fund Growth ₹28.2272
↓ 0.00 ₹2,316 -0.3 0 1.5 6.9 2 5.27% 1Y 4M 2D 1Y 4M 13D HDFC Dynamic Debt Fund Growth ₹72.2026
↓ -0.12 ₹517 -1.2 -1.6 5.7 6.7 7.4 5.71% 2Y 1M 3D 5Y 8M 28D Aditya Birla Sun Life Dynamic Bond Fund Growth ₹35.7582
↑ 0.00 ₹1,420 -0.8 -0.2 2.5 4 4.9 6.38% 1Y 8M 1D 2Y 2M 12D Axis Dynamic Bond Fund Growth ₹23.391
↑ 0.01 ₹2,521 -2.4 -1.9 0.3 7.1 3.9 6.86% 5Y 9M 7D 7Y 11M 16D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Corporate Bond Mutual Funds
Top Corporate Bond funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Corporate Bond Fund Growth ₹89.3471
↓ -0.02 ₹17,156 -0.3 0.5 2.8 7.3 4 6.21% 1Y 8M 23D 2Y 7M 6D HDFC Corporate Bond Fund Growth ₹25.793
↓ -0.02 ₹22,737 -0.9 -0.2 2.2 7.1 3.9 6.07% 2Y 6M 27D 4Y 8M 1D Nippon India Prime Debt Fund Growth ₹47.4258
↑ 0.00 ₹2,885 -0.3 0.8 3.4 6.3 4.7 5.91% 1Y 6M 25D 1Y 11M 16D ICICI Prudential Corporate Bond Fund Growth ₹23.6091
↓ -0.01 ₹17,711 0.1 0.6 3.1 7 4.1 5.7% 1Y 4M 17D 4Y 5M 16D Kotak Corporate Bond Fund Standard Growth ₹3,014.04
↓ -0.09 ₹9,535 -0.2 0.5 2.9 6.5 3.8 5.63% 1Y 1M 28D 2Y 8M 5D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22
Top 5 Gilt Mutual Funds
Top The investment objective of the scheme is to generate optimal returns with adequate liquidity through active management of the portfolio, by investing in debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be realized. UTI Dynamic Bond Fund is a Debt - Dynamic Bond fund was launched on 16 Jun 10. It is a fund with Moderate risk and has given a Below is the key information for UTI Dynamic Bond Fund Returns up to 1 year are on (Erstwhile DHFL Pramerica Credit Opportunities Fund) The investment objective of the Scheme is to generate income and capital appreciation by investing predominantly in corporate debt. There can be no assurance that the investment objective of the Scheme will be realized. PGIM India Credit Risk Fund is a Debt - Credit Risk fund was launched on 29 Sep 14. It is a fund with Moderate risk and has given a Below is the key information for PGIM India Credit Risk Fund Returns up to 1 year are on The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of predominantly debt & money market securities by Banks and Public Sector Undertakings (PSUs). UTI Banking & PSU Debt Fund is a Debt - Banking & PSU Debt fund was launched on 3 Feb 14. It is a fund with Moderate risk and has given a Below is the key information for UTI Banking & PSU Debt Fund Returns up to 1 year are on The main objective of the scheme is to provide optimal returns and liquidity through a portfolio comprising of debt securities and money market instruments. Baroda Pioneer Treasury Advantage Fund is a Debt - Low Duration fund was launched on 24 Jun 09. It is a fund with Moderately Low risk and has given a Below is the key information for Baroda Pioneer Treasury Advantage Fund Returns up to 1 year are on The primary objective of the schemes is to generate regular income through investments in debt and money market instruments. Income maybe generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents. Aditya Birla Sun Life Savings Fund is a Debt - Ultrashort Bond fund was launched on 16 Apr 03. It is a fund with Moderately Low risk and has given a Below is the key information for Aditya Birla Sun Life Savings Fund Returns up to 1 year are on GILT funds with AUM/Net Assets > 500 Crore.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity ICICI Prudential Gilt Fund Growth ₹80.2844
↓ -0.17 ₹2,327 -0.6 -1.4 2.2 7.7 3.8 5.62% 2Y 5M 5D 9Y 2M 26D SBI Magnum Gilt Fund Growth ₹51.8261
↓ 0.00 ₹3,540 -0.4 0 1.9 7.9 3 5.13% 1Y 5M 23D 1Y 7M 2D UTI Gilt Fund Growth ₹50.1818
↓ -0.05 ₹543 -0.2 -0.8 1.3 6.7 2.3 4.66% 10M 20D 3Y 3M Aditya Birla Sun Life Government Securities Fund Growth ₹64.7339
↓ -0.04 ₹1,170 -2.3 -1.6 1.2 7.2 3.6 6.62% 3Y 1M 10D 3Y 8M 12D Nippon India Gilt Securities Fund Growth ₹30.4231
↓ -0.02 ₹1,232 -1.9 -1.9 0.1 6.5 1.8 6.13% 3Y 11M 26D 5Y 4D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22 1. UTI Dynamic Bond Fund
CAGR/Annualized return of 8% since its launch. Ranked 3 in Dynamic Bond category. Return for 2021 was 10.8% , 2020 was 5.9% and 2019 was -3.9% . UTI Dynamic Bond Fund
Growth Launch Date 16 Jun 10 NAV (20 May 22) ₹25.0534 ↓ -0.01 (-0.02 %) Net Assets (Cr) ₹366 on 30 Apr 22 Category Debt - Dynamic Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.18 Sharpe Ratio 0.77 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 4.26% Effective Maturity 2 Years 3 Months 4 Days Modified Duration 9 Months 25 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,396 30 Apr 19 ₹10,436 30 Apr 20 ₹10,429 30 Apr 21 ₹10,994 30 Apr 22 ₹12,151 Returns for UTI Dynamic Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 7.4% 3 Month 7.4% 6 Month 7% 1 Year 18.4% 3 Year 7.6% 5 Year 5.3% 10 Year 15 Year Since launch 8% Historical performance (Yearly) on absolute basis
Year Returns 2021 10.8% 2020 5.9% 2019 -3.9% 2018 5.2% 2017 4.2% 2016 14.9% 2015 6.9% 2014 14.7% 2013 7.6% 2012 11.2% Fund Manager information for UTI Dynamic Bond Fund
Name Since Tenure Sudhir Agarwal 1 Dec 21 0.41 Yr. Data below for UTI Dynamic Bond Fund as on 30 Apr 22
Asset Allocation
Asset Class Value Cash 33.3% Debt 66.7% Debt Sector Allocation
Sector Value Government 46.31% Corporate 27.06% Cash Equivalent 26.62% Credit Quality
Rating Value AA 10.21% AAA 74.7% Below B 15.09% Top Securities Holdings / Portfolio
Name Holding Value Quantity 5.53% Govt Stock 2033
Sovereign Bonds | -11% ₹40 Cr 400,000,000 6.54% Govt Stock 2032
Sovereign Bonds | -8% ₹29 Cr 300,000,000
↑ 300,000,000 National Bank For Agriculture And Rural Development
Debentures | -7% ₹25 Cr 250 5.22% Govt Stock 2025
Sovereign Bonds | -7% ₹24 Cr 250,000,000 Jorabat Shillong Expressway Limited
Debentures | -6% ₹23 Cr 4,619 Jorabat Shillong Expressway Limited
Debentures | -6% ₹21 Cr 4,282 182 Dtb 15092022
Sovereign Bonds | -5% ₹20 Cr 200,000,000 6.1% Govt Stock 2031
Sovereign Bonds | -5% ₹18 Cr 200,000,000
↑ 200,000,000 Piramal Capital & Housing Finance Limited
Debentures | -3% ₹10 Cr 123,219 Punjab National Bank
Debentures | -3% ₹10 Cr 100 2. PGIM India Credit Risk Fund
CAGR/Annualized return of 6.3% since its launch. Ranked 2 in Credit Risk category. . PGIM India Credit Risk Fund
Growth Launch Date 29 Sep 14 NAV (21 Jan 22) ₹15.5876 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹39 on 31 Dec 21 Category Debt - Credit Risk AMC Pramerica Asset Managers Private Limited Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 1.85 Sharpe Ratio 1.73 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Years (1%),1 Years and above(NIL) Yield to Maturity 5.01% Effective Maturity 7 Months 2 Days Modified Duration 6 Months 14 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,596 30 Apr 19 ₹11,155 30 Apr 20 ₹10,531 30 Apr 21 ₹11,446 Returns for PGIM India Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 0.3% 3 Month 0.6% 6 Month 4.4% 1 Year 8.4% 3 Year 3% 5 Year 4.2% 10 Year 15 Year Since launch 6.3% Historical performance (Yearly) on absolute basis
Year Returns 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Fund Manager information for PGIM India Credit Risk Fund
Name Since Tenure Data below for PGIM India Credit Risk Fund as on 31 Dec 21
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 3. UTI Banking & PSU Debt Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 3 in Banking & PSU Debt category. Return for 2021 was 2.8% , 2020 was 8.9% and 2019 was -1% . UTI Banking & PSU Debt Fund
Growth Launch Date 3 Feb 14 NAV (20 May 22) ₹17.6067 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹293 on 30 Apr 22 Category Debt - Banking & PSU Debt AMC UTI Asset Management Company Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.32 Sharpe Ratio -1.05 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 5.19% Effective Maturity 1 Year 7 Months 20 Days Modified Duration 1 Year 4 Months 10 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,610 30 Apr 19 ₹10,457 30 Apr 20 ₹11,342 30 Apr 21 ₹12,100 30 Apr 22 ₹12,441 Returns for UTI Banking & PSU Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 5.7% 3 Month 5.7% 6 Month 6.6% 1 Year 8.3% 3 Year 7.7% 5 Year 5.5% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2021 2.8% 2020 8.9% 2019 -1% 2018 6.8% 2017 6.4% 2016 11.7% 2015 8.6% 2014 2013 2012 Fund Manager information for UTI Banking & PSU Debt Fund
Name Since Tenure Anurag Mittal 1 Dec 21 0.41 Yr. Data below for UTI Banking & PSU Debt Fund as on 30 Apr 22
Asset Allocation
Asset Class Value Cash 29.1% Debt 70.9% Debt Sector Allocation
Sector Value Government 42.8% Cash Equivalent 29.1% Corporate 28.1% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Limited
Debentures | -9% ₹26 Cr 250 Export Import Bank Of India
Debentures | -9% ₹26 Cr 250 Power Finance Corporation Ltd.
Debentures | -9% ₹25 Cr 250 Axis Bank Limited
Debentures | -7% ₹20 Cr 200 Indian Railway Finance Corporation Limited
Debentures | -7% ₹20 Cr 200 Oil And Natural Gas Corporation Limited
Debentures | -5% ₹15 Cr 150 National Bank For Agriculture And Rural Development
Debentures | -5% ₹15 Cr 150 Housing And Urban Development Corporation Limited
Debentures | -4% ₹13 Cr 125 Hindustan Petroleum Corporation Limited
Debentures | -4% ₹10 Cr 100 Small Industries Development Bank Of India
Debentures | -3% ₹10 Cr 100 4. Baroda Pioneer Treasury Advantage Fund
CAGR/Annualized return of 3.8% since its launch. Ranked 4 in Low Duration category. . Baroda Pioneer Treasury Advantage Fund
Growth Launch Date 24 Jun 09 NAV (13 Mar 22) ₹1,600.39 ↑ 0.30 (0.02 %) Net Assets (Cr) ₹28 on 31 Jan 22 Category Debt - Low Duration AMC Baroda Pioneer Asset Management Co. Ltd. Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.89 Sharpe Ratio 0.37 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 4.07% Effective Maturity 8 Months 1 Day Modified Duration 7 Months 17 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,694 30 Apr 19 ₹11,406 30 Apr 20 ₹6,405 30 Apr 21 ₹8,184 Baroda Pioneer Treasury Advantage Fund SIP Returns
Returns for Baroda Pioneer Treasury Advantage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 0.2% 3 Month 0.7% 6 Month 1.2% 1 Year 3.7% 3 Year -9.5% 5 Year -3.2% 10 Year 15 Year Since launch 3.8% Historical performance (Yearly) on absolute basis
Year Returns 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Fund Manager information for Baroda Pioneer Treasury Advantage Fund
Name Since Tenure Data below for Baroda Pioneer Treasury Advantage Fund as on 31 Jan 22
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 5. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.5% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2021 was 3.9% , 2020 was 7% and 2019 was 8.5% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (20 May 22) ₹441.001 ↑ 0.06 (0.01 %) Net Assets (Cr) ₹16,109 on 15 May 22 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.47 Sharpe Ratio 1.84 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 5.04% Effective Maturity 6 Months Modified Duration 5 Months 26 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,692 30 Apr 19 ₹11,579 30 Apr 20 ₹12,436 30 Apr 21 ₹13,245 30 Apr 22 ₹13,782 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 0% 3 Month 0.6% 6 Month 1.7% 1 Year 3.7% 3 Year 5.7% 5 Year 6.5% 10 Year 15 Year Since launch 7.5% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.9% 2020 7% 2019 8.5% 2018 7.6% 2017 7.2% 2016 9.2% 2015 8.9% 2014 9.7% 2013 9.5% 2012 9.7% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 14 Jun 14 7.88 Yr. Kaustubh Gupta 15 Jul 11 10.8 Yr. Monika Gandhi 22 Mar 21 1.11 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 15 May 22
Asset Allocation
Asset Class Value Cash 64.1% Debt 35.9% Debt Sector Allocation
Sector Value Corporate 42.72% Cash Equivalent 37.34% Government 19.94% Credit Quality
Rating Value AA 13.01% AAA 86.99% Top Securities Holdings / Portfolio
Name Holding Value Quantity Housing Development Finance Corporation Limited
Debentures | -4% ₹602 Cr 6,000 182 Dtb 08092022
Sovereign Bonds | -2% ₹394 Cr 40,000,000 8.15% Govt Stock 2022
Sovereign Bonds | -2% ₹296 Cr 29,500,000 Shriram Transport Finance Company Limited
Debentures | -2% ₹280 Cr 2,750 Indusind Bank Limited
Debentures | -2% ₹269 Cr 5,500
↑ 5,500 Reliance Industries Limited
Debentures | -2% ₹258 Cr 2,500 Housing Development Finance Corporation Limited
Debentures | -2% ₹246 Cr 2,450 08.21 HR UDAY 2023
Domestic Bonds | -1% ₹236 Cr 23,000,000 08.24 GJ Sdl 2023
Sovereign Bonds | -1% ₹216 Cr 21,000,000 08.18 HR UDAY 2022
Domestic Bonds | -1% ₹211 Cr 21,000,000
How to Evaluate Best Debt Mutual Funds
In order to select the best debt funds you wish to invest in, it is necessary to consider some of the important parameters such as average maturity, credit quality, AUM, expense ratio, tax implication., etc. Let's have an in-depth look-
1. Average Maturity/Duration
Average maturity is an essential parameter in debt funds that is sometimes overlooked by investors, who tend to invest for a long period without considering the risks involved. Investors need to decide their debt fund investment based on its maturity period, Matching the time period of investment with the maturity period of the debt fund is a good way to ensure you don't end up taking unnecessary risk. Thus, it is advisable to know the average maturity of a debt fund, before investing, in order to aim for optimum risk returns in debt funds. Looking at the average maturity (duration is a similar factor) is important, for example, a liquid fund may have an average maturity of a couple of days to maybe a month, this would mean it is a great option for an investor who is looking to invest money for a couple of days. Similarly, if you are looking at the time frame of one-year Investment plan then, a short-term debt fund can be ideal.
2. Interest Rate Scenario
Understanding the market environment is very important in debt funds which are affected by interest rates and its fluctuations. When the interest rate rises in the economy, the bond price falls and vice-versa. Also, during the time when the interest rates rise, new bonds are issued in the market with a higher yield than the older bonds, making those older bonds of lower value. Therefore, investors are more attracted towards newer bonds in the market and also a re-pricing of older bonds takes place. In case a debt fund is having an exposure to such "older bonds" then when the interest rates rise, the NAV of the debt fund would be impacted negatively. Furthermore, as debt funds are exposed to interest rate fluctuations, it disturbs the prices of the underlying bonds in the fund portfolio. For instance, long-term debt funds are at a higher risk during times of rising interest rates. During this time making a short-term investment plan will lower your interest rate risks.
If one has good knowledge of interest rates and can monitor the same, one can even take advantage of this. In a falling interest rate market, long-term debt funds would be a good choice. However, during the times of rising interest rates then it would be wise to be in funds with shorter average maturities like short-term funds, Ultra Short Term fund or even liquid funds.
3. Current Yield or Portfolio Yield
The yield is a measure of the interest income generated by the bonds in the portfolio. Funds that invest in debt or bonds that have a higher coupon rate (or yield) would have a higher overall portfolio yield. The yield to maturity(ytm) of a debt mutual fund indicates the running yield of the fund. When comparing debt funds on the basis of YTM, one should also look at that fact that how is the extra yield being generated. Is this at the cost of as lower portfolio quality? Investing in not so good quality instruments has its own issues. You don't want to end up investing in a debt fund which has such bonds or securities that may Default later on. So, always look at the portfolio yield and balance it off with the credit quality.
4. Credit Quality of Portfolio
In order to invest in best debt funds, checking the credit quality of the bonds and debt securities is an essential parameter. Bonds are assigned a credit rating by various agencies based on their ability to pay the money back. A bond with AAA rating is considered to be the best credit rating and also implies a safe and secure investment. If one truly wants safety and considers this as the paramount parameter in selecting the best debt fund, then getting into a fund with very high-quality debt instruments (AAA or AA+) may be the desired option.
5. Assets Under Management (AUM)
This is the foremost parameter to consider while choosing the best debt funds. AUM is the total amount invested in a particular scheme by all investors. Since, most Mutual Funds’ total AUM is invested in debt funds, investors need to select scheme assets that have a considerable AUM. Being in a fund which has a large exposure to corporates may be risky, since their withdrawals may be large which may affect the overall fund performance.
6. Expense Ratio
An important factor to be considered in debt funds is its expense ratio. A higher expense ratio creates a larger impact on the funds’ performance. For example, liquid funds have the lowest expense ratios which are up to 50 bps (BPS is a unit to measure interest rates wherein one bps is equal to 1/100th of 1%) whereas, other debt funds could charge up to 150 bps. So to make a choice between one debt mutual fund, it is important to consider the management fee or the fund running expense.
7. Taxation Impacts
Debt funds offer the benefit of long-term capital gains (more than 3 years) with indexation benefits. And the short term capital gains (less than 3 years) is taxed at 30%.
Things to consider as an investor
1. Fund Objectives
Debt Fund aims to earn optimal returns by maintaining a diversified portfolio of various types of securities. You can expect them to perform in a predictable manner. It is because of this reason, that debt funds are popular among conservative investors.
2. Fund Types
Debt funds are further divided into various categories like liquid funds, Monthly Income Plan (MIP), fixed maturity plans (FMP), Dynamic Bond Funds, income funds, credit opportunities funds, GILT funds, short-term funds and ultra short-term funds.
3. Risks
Debt funds are basically exposed to interest rate risk, credit risk, and liquidity risk. The fund value may fluctuate due to the overall interest rate movements. There’s a risk of default in the payment of interest and principal by the issuer. Liquidity risk happens when the fund manager is unable to sell the underlying security due to lack of demand.
4. Cost
Debt funds charge an expense ratio to manage your money. Till now SEBI had mandated the upper limit of expense ratio to be 2.25% (Might change time to time with regulations.).
5. Investment Horizon
An investment of 3 months to 1 year would be ideal for liquid funds. If you have a longer horizon of say 2 to 3 years, you may go for short-term bond funds.
6. Financial Goals
Debt funds can be used to achieve a variety of goals like earning additional income or for purpose of liquidity.
How to Invest in Best Debt Funds Online?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
Conclusion
Debt funds are one of the best ways to invest your money and generate income on a regular basis by choosing the relevant product matching your risk profile. So, investors looking to generate steady income or take advantage of the debt markets, can consider the above best debt funds for 2022 - 2023 and start investing!_
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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The article is nice and informative but it could be in more simple words because lot of people have much less knowledge in such sector