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Fincash » Mutual Funds » Best Debt Lumpsum Investments

6 Best Debt Mutual Funds for Lump sum Investments 2025

Updated on July 3, 2025 , 47093 views

Debt Mutual Fund schemes in India have grown over the years. As a result, the best performing mutual debt funds in the Market keep on changing. There are various rating systems in place to judge a mutual fund scheme, namely CRISIL, Morning Star, ICRA. These systems evaluate a mutual fund in terms of returns, Standard Deviation, credit quality of securities, rate movement guidance by RBI, etc.

debt-lumpsum

Why To Invest Lump Sum in Debt Mutual Funds?

  • Better return than prevailing Fixed Deposit (FD) & Recurring deposit (RD) rates across banks
  • Returns are linked to debt markets
  • Immediate (T+1) Redemption online
  • Indexation (Debt Taxation benefits) benefits on returns over three years

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Best Lumpsum Debt Mutual Funds FY 25 - 26

Below are the top ranked funds from Debt Categories primarily funds having AUM > 500 Crore & are in Ultra-short, Corporate bond, Credit Risk, Low Duration sub categories && Having maturity of less than 3 years and providing highest yields.

Top 6 Lump sum Debt Mutual Funds

FundNAVNet Assets (Cr)Min Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)2024 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Nippon India Credit Risk Fund Growth ₹35.1228
↑ 0.01
₹1,017 500 2.65.39.78.28.38.17%1Y 10M 28D2Y 3M 25D
Kotak Credit Risk Fund Growth ₹29.5981
↑ 0.03
₹704 5,000 2.75.38.17.27.18%2Y 2M 12D2Y 9M 11D
SBI Credit Risk Fund Growth ₹45.7979
↓ -0.01
₹2,245 5,000 2.24.98.98.18.17.85%2Y 1M 28D2Y 11M 12D
L&T Credit Risk Fund Growth ₹32.4032
↑ 0.00
₹657 10,000 13.317.421.511.37.27.19%2Y 1M 17D2Y 10M 6D
Nippon India Low Duration Fund Growth ₹3,756.65
↓ -0.01
₹7,663 500 2.14.387.17.47%11M 10D1Y 2M 20D
HDFC Low Duration Fund Growth ₹57.9635
↑ 0.01
₹22,354 5,000 2.24.387.37.46.98%10M 28D1Y 10M 20D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Jul 25
*List of Debt Mutual Funds having net assets > 500 Crore and Fund have assets under manegement for atleast 3 years.

1. Nippon India Credit Risk Fund

(Erstwhile Reliance Regular Savings Fund - Debt Plan)

The primary investment objective of this option is to generate optimal returns consistent with moderate level of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly investments shall predominantly be made in Debt & Money Market Instruments.

Nippon India Credit Risk Fund is a Debt - Credit Risk fund was launched on 8 Jun 05. It is a fund with Moderate risk and has given a CAGR/Annualized return of 6.5% since its launch.  Ranked 21 in Credit Risk category.  Return for 2024 was 8.3% , 2023 was 7.9% and 2022 was 3.9% .

Below is the key information for Nippon India Credit Risk Fund

Nippon India Credit Risk Fund
Growth
Launch Date 8 Jun 05
NAV (04 Jul 25) ₹35.1228 ↑ 0.01   (0.02 %)
Net Assets (Cr) ₹1,017 on 31 May 25
Category Debt - Credit Risk
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderate
Expense Ratio 1.63
Sharpe Ratio 3.34
Information Ratio 0
Alpha Ratio 0
Min Investment 500
Min SIP Investment 100
Exit Load 0-12 Months (1%),12 Months and above(NIL)
Yield to Maturity 8.17%
Effective Maturity 2 Years 3 Months 25 Days
Modified Duration 1 Year 10 Months 28 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,899
30 Jun 22₹12,030
30 Jun 23₹12,938
30 Jun 24₹13,920
30 Jun 25₹15,246

Nippon India Credit Risk Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹206,148.
Net Profit of ₹26,148
Invest Now

Returns for Nippon India Credit Risk Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Jul 25

DurationReturns
1 Month 0.7%
3 Month 2.6%
6 Month 5.3%
1 Year 9.7%
3 Year 8.2%
5 Year 8.8%
10 Year
15 Year
Since launch 6.5%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.3%
2023 7.9%
2022 3.9%
2021 13.5%
2020 -5.9%
2019 1.9%
2018 6.1%
2017 7%
2016 10%
2015 8.8%
Fund Manager information for Nippon India Credit Risk Fund
NameSinceTenure
Kinjal Desai25 May 187.02 Yr.
Sushil Budhia1 Feb 205.33 Yr.

Data below for Nippon India Credit Risk Fund as on 31 May 25

Asset Allocation
Asset ClassValue
Cash5.92%
Debt93.8%
Other0.28%
Debt Sector Allocation
SectorValue
Corporate78.94%
Government14.86%
Cash Equivalent5.92%
Credit Quality
RatingValue
A25.19%
AA44.71%
AAA30.1%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.02% Govt Stock 2031
Sovereign Bonds | -
8%₹78 Cr7,500,000
Summit Digitel Infrastructure Limited
Debentures | -
6%₹60 Cr600
Renew Solar Energy (Jharkhand Five) Private Limited
Debentures | -
5%₹49 Cr5,000
TRuhome Finance Limited
Debentures | -
4%₹41 Cr4,000
Jubilant Bevco Limited
Debentures | -
4%₹40 Cr4,000
↑ 4,000
Mancherial Repallewada Road Private Limited
Debentures | -
4%₹40 Cr4,500
↑ 4,500
Prestige Projects Private Limited
Debentures | -
4%₹40 Cr4,000
The Sandur Manganese And Iron Ores Limited
Debentures | -
4%₹39 Cr4,000
Bamboo Hotel And Global Centre (Delhi) Private Limited
Debentures | -
4%₹38 Cr3,800
Delhi International Airport Limited
Debentures | -
4%₹36 Cr3,500

2. Kotak Credit Risk Fund

(Erstwhile Kotak Income Opportunities Fund)

The investment objective of the scheme is to generate income by investing in debt/ and money market securities across the yield curve and credit spectrum. The scheme will also seek to maintain reasonable liquidity within the fund.

Kotak Credit Risk Fund is a Debt - Credit Risk fund was launched on 11 May 10. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.4% since its launch.  Ranked 18 in Credit Risk category.  Return for 2024 was 7.1% , 2023 was 6.4% and 2022 was 0.9% .

Below is the key information for Kotak Credit Risk Fund

Kotak Credit Risk Fund
Growth
Launch Date 11 May 10
NAV (04 Jul 25) ₹29.5981 ↑ 0.03   (0.12 %)
Net Assets (Cr) ₹704 on 31 May 25
Category Debt - Credit Risk
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 1.7
Sharpe Ratio 0.76
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 8%
Effective Maturity 2 Years 9 Months 11 Days
Modified Duration 2 Years 2 Months 12 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,744
30 Jun 22₹10,837
30 Jun 23₹11,421
30 Jun 24₹12,349
30 Jun 25₹13,328

Kotak Credit Risk Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹197,169.
Net Profit of ₹17,169
Invest Now

Returns for Kotak Credit Risk Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Jul 25

DurationReturns
1 Month 0.7%
3 Month 2.7%
6 Month 5.3%
1 Year 8.1%
3 Year 7.2%
5 Year 5.9%
10 Year
15 Year
Since launch 7.4%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.1%
2023 6.4%
2022 0.9%
2021 5.3%
2020 6.6%
2019 9%
2018 6.2%
2017 6.6%
2016 10.4%
2015 9.1%
Fund Manager information for Kotak Credit Risk Fund
NameSinceTenure
Deepak Agrawal11 May 1015.07 Yr.
Sunit garg1 Nov 222.58 Yr.

Data below for Kotak Credit Risk Fund as on 31 May 25

Asset Allocation
Asset ClassValue
Cash8.81%
Equity6%
Debt81.32%
Other3.87%
Debt Sector Allocation
SectorValue
Corporate67.69%
Government13.63%
Cash Equivalent8.81%
Credit Quality
RatingValue
A15.52%
AA62.41%
AAA22.08%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
9%₹63 Cr5,965,000
TATA Projects Limited
Debentures | -
7%₹51 Cr5,000
Jubilant Bevco Limited
Debentures | -
7%₹51 Cr500
↑ 500
Vedanta Limited
Debentures | -
7%₹50 Cr5,000
Bamboo Hotel And Global Centre (Delhi) Private Limited
Debentures | -
7%₹50 Cr5,000
Aditya Birla Real Estate Limited
Debentures | -
7%₹46 Cr4,500
Aditya Birla Renewables Limited
Debentures | -
6%₹41 Cr4,000
Indostar Capital Finance Limited
Debentures | -
6%₹40 Cr4,000
Au Small Finance Bank Limited
Debentures | -
4%₹30 Cr30
National Bank For Agriculture And Rural Development
Debentures | -
4%₹25 Cr2,500

3. SBI Credit Risk Fund

(Erstwhile SBI Corporate Bond Fund)

The investment objective will be to actively manage a portfolio of good quality corporate debt as well as Money Market Instruments so as to provide reasonable returns and liquidity to the Unit holders. However there is no guarantee or assurance that the investment objective of the scheme will be achieved.

SBI Credit Risk Fund is a Debt - Credit Risk fund was launched on 19 Jul 04. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.5% since its launch.  Ranked 3 in Credit Risk category.  Return for 2024 was 8.1% , 2023 was 8.3% and 2022 was 4.2% .

Below is the key information for SBI Credit Risk Fund

SBI Credit Risk Fund
Growth
Launch Date 19 Jul 04
NAV (04 Jul 25) ₹45.7979 ↓ -0.01   (-0.01 %)
Net Assets (Cr) ₹2,245 on 31 May 25
Category Debt - Credit Risk
AMC SBI Funds Management Private Limited
Rating
Risk Moderate
Expense Ratio 1.56
Sharpe Ratio 2.32
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-12 Months (3%),12-24 Months (1.5%),24-36 Months (0.75%),36 Months and above(NIL)
Yield to Maturity 7.85%
Effective Maturity 2 Years 11 Months 12 Days
Modified Duration 2 Years 1 Month 28 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,754
30 Jun 22₹11,156
30 Jun 23₹12,075
30 Jun 24₹12,973
30 Jun 25₹14,103

SBI Credit Risk Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125
Invest Now

Returns for SBI Credit Risk Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Jul 25

DurationReturns
1 Month 0.6%
3 Month 2.2%
6 Month 4.9%
1 Year 8.9%
3 Year 8.1%
5 Year 7.1%
10 Year
15 Year
Since launch 7.5%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.1%
2023 8.3%
2022 4.2%
2021 5%
2020 9.8%
2019 6.5%
2018 6.2%
2017 6.9%
2016 10.5%
2015 9.7%
Fund Manager information for SBI Credit Risk Fund
NameSinceTenure
Lokesh Mallya1 Feb 178.33 Yr.

Data below for SBI Credit Risk Fund as on 31 May 25

Asset Allocation
Asset ClassValue
Cash10.55%
Equity2.82%
Debt86.27%
Other0.35%
Debt Sector Allocation
SectorValue
Corporate71.14%
Government15.13%
Cash Equivalent10.55%
Credit Quality
RatingValue
A18.54%
AA64.34%
AAA17.12%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.23% Govt Stock 2039
Sovereign Bonds | -
9%₹199 Cr19,000,000
Aadhar Housing Finance Limited
Debentures | -
5%₹113 Cr11,200
Nirma Limited
Debentures | -
5%₹112 Cr11,000
Renew Solar Energy (Jharkhand Five) Private Limited
Debentures | -
5%₹107 Cr11,000
Infopark Properties Limited
Debentures | -
5%₹106 Cr10,500
Aditya Birla Real Estate Limited
Debentures | -
4%₹87 Cr8,500
The Sandur Manganese And Iron Ores Limited
Debentures | -
4%₹84 Cr8,500
6.79% Govt Stock 2034
Sovereign Bonds | -
4%₹82 Cr8,000,000
Avanse Financial Services Limited
Debentures | -
4%₹81 Cr8,000
Renserv Global Private Limited
Debentures | -
4%₹80 Cr8,000

4. L&T Credit Risk Fund

(Erstwhile L&T Income Opportunities Fund)

The Scheme seeks to generate regular returns and capital appreciation by investing in debt (including securitised debt), government and money market securities.

L&T Credit Risk Fund is a Debt - Credit Risk fund was launched on 8 Oct 09. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.8% since its launch.  Ranked 12 in Credit Risk category.  Return for 2024 was 7.2% , 2023 was 6.5% and 2022 was 3.2% .

Below is the key information for L&T Credit Risk Fund

L&T Credit Risk Fund
Growth
Launch Date 8 Oct 09
NAV (04 Jul 25) ₹32.4032 ↑ 0.00   (0.02 %)
Net Assets (Cr) ₹657 on 31 May 25
Category Debt - Credit Risk
AMC L&T Investment Management Ltd
Rating
Risk Moderate
Expense Ratio 1.65
Sharpe Ratio 1.18
Information Ratio 0
Alpha Ratio 0
Min Investment 10,000
Min SIP Investment 1,000
Exit Load 0-1 Years (1%),1 Years and above(NIL)
Yield to Maturity 7.19%
Effective Maturity 2 Years 10 Months 6 Days
Modified Duration 2 Years 1 Month 17 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,911
30 Jun 22₹11,362
30 Jun 23₹12,075
30 Jun 24₹12,879
30 Jun 25₹15,639

L&T Credit Risk Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹209,201.
Net Profit of ₹29,201
Invest Now

Returns for L&T Credit Risk Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Jul 25

DurationReturns
1 Month 0.4%
3 Month 13.3%
6 Month 17.4%
1 Year 21.5%
3 Year 11.3%
5 Year 9.4%
10 Year
15 Year
Since launch 7.8%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.2%
2023 6.5%
2022 3.2%
2021 5.7%
2020 5%
2019 2.3%
2018 5.6%
2017 7.2%
2016 10.1%
2015 9.4%
Fund Manager information for L&T Credit Risk Fund
NameSinceTenure
Shriram Ramanathan24 Nov 1212.61 Yr.

Data below for L&T Credit Risk Fund as on 31 May 25

Asset Allocation
Asset ClassValue
Cash16.62%
Debt83.13%
Other0.25%
Debt Sector Allocation
SectorValue
Corporate65.72%
Cash Equivalent18.94%
Government15.1%
Credit Quality
RatingValue
AA65.36%
AAA34.64%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Nuvoco Vistas Corporation Limited
Debentures | -
8%₹53 Cr500
Tata Housing Development Company Limited
Debentures | -
6%₹36 Cr3,500
7.32% Govt Stock 2030
Sovereign Bonds | -
5%₹32 Cr3,000,000
Ongc Petro Additions Limited
Debentures | -
4%₹27 Cr2,500
Aditya Birla Renewables Limited
Debentures | -
4%₹27 Cr2,500
Nirma Limited
Debentures | -
4%₹26 Cr2,500
Rec Limited
Debentures | -
4%₹26 Cr2,500
↑ 2,500
National Bank For Agriculture And Rural Development
Debentures | -
4%₹26 Cr2,500
Small Industries Development Bank Of India
Debentures | -
4%₹26 Cr2,500
JSW Steel Limited
Debentures | -
4%₹25 Cr250

5. Nippon India Low Duration Fund

(Erstwhile Reliance Money Manager Fund)

The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities.

Nippon India Low Duration Fund is a Debt - Low Duration fund was launched on 20 Mar 07. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.5% since its launch.  Ranked 31 in Low Duration category.  Return for 2024 was 7.4% , 2023 was 6.7% and 2022 was 4.2% .

Below is the key information for Nippon India Low Duration Fund

Nippon India Low Duration Fund
Growth
Launch Date 20 Mar 07
NAV (04 Jul 25) ₹3,756.65 ↓ -0.01   (0.00 %)
Net Assets (Cr) ₹7,663 on 31 May 25
Category Debt - Low Duration
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 0.94
Sharpe Ratio 2.32
Information Ratio 0
Alpha Ratio 0
Min Investment 500
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 7%
Effective Maturity 1 Year 2 Months 20 Days
Modified Duration 11 Months 10 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,530
30 Jun 22₹10,887
30 Jun 23₹11,566
30 Jun 24₹12,359
30 Jun 25₹13,351

Nippon India Low Duration Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹197,169.
Net Profit of ₹17,169
Invest Now

Returns for Nippon India Low Duration Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Jul 25

DurationReturns
1 Month 0.6%
3 Month 2.1%
6 Month 4.3%
1 Year 8%
3 Year 7.1%
5 Year 5.9%
10 Year
15 Year
Since launch 7.5%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.4%
2023 6.7%
2022 4.2%
2021 4.1%
2020 7.3%
2019 7%
2018 7.4%
2017 6.6%
2016 8.5%
2015 8.4%
Fund Manager information for Nippon India Low Duration Fund
NameSinceTenure
Vivek Sharma1 Feb 205.33 Yr.
Kinjal Desai25 May 187.02 Yr.

Data below for Nippon India Low Duration Fund as on 31 May 25

Asset Allocation
Asset ClassValue
Cash30.55%
Debt69.14%
Other0.3%
Debt Sector Allocation
SectorValue
Corporate69.04%
Government22.4%
Cash Equivalent8.26%
Credit Quality
RatingValue
AA14.29%
AAA85.71%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
India (Republic of)
- | -
5%₹395 Cr40,000,000
↑ 40,000,000
Telangana State Industrial Infrastructure Corporation Limited
Debentures | -
3%₹202 Cr20,000
Interise TRust
Debentures | -
2%₹173 Cr18,000
Highways Infrastructure Trust
Debentures | -
2%₹172 Cr1,750
Small Industries Development Bank Of India
Debentures | -
2%₹153 Cr15,000
Rec Limited
Debentures | -
2%₹152 Cr15,000
VAJRA 016 TRUST
Unlisted bonds | -
2%₹149 Cr100
NAOMI 05 2024
Unlisted bonds | -
2%₹148 Cr10,000
Hinduja Leyland Finance Limited
Debentures | -
2%₹143 Cr14,000
Shriram Finance Limited
Debentures | -
2%₹137 Cr13,500

6. HDFC Low Duration Fund

(Erstwhile HDFC Cash Management Fund - Treasury Advantage Plan)

To generate regular income through investment in debt securities and money market instruments.

HDFC Low Duration Fund is a Debt - Low Duration fund was launched on 18 Nov 99. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.1% since its launch.  Return for 2024 was 7.4% , 2023 was 7% and 2022 was 4.1% .

Below is the key information for HDFC Low Duration Fund

HDFC Low Duration Fund
Growth
Launch Date 18 Nov 99
NAV (04 Jul 25) ₹57.9635 ↑ 0.01   (0.02 %)
Net Assets (Cr) ₹22,354 on 15 Jun 25
Category Debt - Low Duration
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 1.03
Sharpe Ratio 1.99
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 6.98%
Effective Maturity 1 Year 10 Months 20 Days
Modified Duration 10 Months 28 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 20₹10,000
30 Jun 21₹10,566
30 Jun 22₹10,878
30 Jun 23₹11,605
30 Jun 24₹12,430
30 Jun 25₹13,425

HDFC Low Duration Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for HDFC Low Duration Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Jul 25

DurationReturns
1 Month 0.6%
3 Month 2.2%
6 Month 4.3%
1 Year 8%
3 Year 7.3%
5 Year 6.1%
10 Year
15 Year
Since launch 7.1%
Historical performance (Yearly) on absolute basis
YearReturns
2024 7.4%
2023 7%
2022 4.1%
2021 3.7%
2020 8.1%
2019 8%
2018 6.5%
2017 6.4%
2016 8.6%
2015 7.7%
Fund Manager information for HDFC Low Duration Fund
NameSinceTenure
Anupam Joshi27 Oct 159.68 Yr.
Praveen Jain6 Oct 222.73 Yr.
Dhruv Muchhal22 Jun 232.02 Yr.

Data below for HDFC Low Duration Fund as on 15 Jun 25

Asset Allocation
Asset ClassValue
Cash10.58%
Debt89.18%
Other0.23%
Debt Sector Allocation
SectorValue
Corporate68.47%
Government22.01%
Cash Equivalent9.29%
Credit Quality
RatingValue
AA9.16%
AAA90.84%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.81% Govt Stock 2033
Sovereign Bonds | -
5%₹1,039 Cr100,000,000
7.59% Govt Stock 2031
Sovereign Bonds | -
4%₹921 Cr90,000,000
Sikka Ports & Terminals Limited
Debentures | -
3%₹695 Cr6,950
Mangalore Refinery And Petrochemicals Limited
Debentures | -
3%₹644 Cr6,450
Jubilant Beverages Limited
Debentures | -
3%₹604 Cr59,740
↑ 59,740
Power Finance Corporation Limited
Debentures | -
2%₹453 Cr45,000
↑ 10,000
Aditya Birla Renewables Limited
Debentures | -
2%₹409 Cr40,000
Bajaj Housing Finance Limited
Debentures | -
2%₹408 Cr40,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹377 Cr3,750
Jamnagar Utilities & Power Private Limited
Debentures | -
2%₹374 Cr3,750

Smart Tips to Look for in Debt Funds

1. Yield

The yield is a measure of the interest Income generated by the Bonds in the Portfolio.

For instance, let's assume that a bond has a Face Value of INR 100 with an 8 percent coupon rate. This means that the investor will earn INR 8 p.a., on each bond that he invests in. As the bonds are traded in the Open Market, the price will fluctuate each Business Day. The interest rates rise and fall and demand for the bonds moves up and down. And this impacts the price of the bond. Let’s assume interest rates rise to 10 percent. Even then the investor will continue to earn INR 8. So to increase the yield to 10 percent, which is the current market rate of interest, the price of the bond will have to drop to INR 80.

In another instance, lets assume that the interest rates fall to 6 percent. Again, the investor will continue to earn INR 8. This time the price of the bond will have to go up to INR 133.

If we look at these assumptions, there are two aspects to it- the one is that the yield is not fixed, but fluctuates to changes in the interest rate. The second one is the price of the bond moves inversely to interest rates. It moves to maintain a level where it will attract buyers.

2. Yield to Maturity

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.

3. Modified Duration

Modified duration provides a fair indication of a bond’s sensitivity to a change in interest rates. The higher the duration, the more Volatility the bond exhibits with a change in interest rates

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.

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FAQs

1. How do debt fund managers identify which is high-quality security?

A: Debt fund managers have their techniques for evaluating each bond and assessing the debtor's chances of defaulting to pay the bond. Usually, the higher the credit rating lesser is the chance for the creditor defaulting.

2. Why is debt mutual funds low-risk?

A: Debt mutual funds deal with securities and bonds along other money market instruments. The chances of these instruments failing are usually less, and hence, your investment will remain secure, thereby making debt mutual funds low-risk investments.

3. Do fund managers invest in low-quality securities?

A: Yes, sometimes fund managers do invest in low-quality securities if chances of good ROI exist. However, this will be a calculated risk taken by your fund manager and only if the portfolio of investment already has stable, high-quality securities.

4. Is there any short-term debt mutual fund?

A: Yes, if you opt for a Liquid Fund in which investments are made in money market instruments that have a maturity of 91 days, then you can realize your investment in a matter of three months. This is a short-term investment that you can undertake to get a better understanding of debt mutual funds.

5. Can I invest long-term in a debt mutual fund?

A: Yes, you can invest long-term in debt mutual funds. For example, suppose you invest in the Nippon India Credit Risk Fund or the ICICI Prudential Regular Savings Fund. In that case, it is better that you hold your investment at least for one year, 5 months, and 19 days and 2 years, one month, and 2 days respectively, to get maximum ROI. But you can keep investing beyond that for 3 years.

Disclaimer:
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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