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6 Best Debt Mutual Funds for Lump sum Investments 2020
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.
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 20 - 21
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
Fund NAV Net Assets (Cr) Min Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2019 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Nippon India Credit Risk Fund Growth ₹22.8004
↑ 0.40 ₹4,628 500 -11.3 -11 -11.4 0.3 1.9 14.56% 1Y 7M 24D 2Y 2M 19D Aditya Birla Sun Life Credit Risk Fund Growth ₹14.0068
↑ 0.27 ₹5,115 1,000 1.7 -1.1 2.7 5.5 2.1 11.75% 1Y 11M 8D 2Y 6M 22D Franklin India Credit Risk Fund Growth ₹18.6158
↑ 0.37 ₹5,481 5,000 -6.5 -5.9 -4.7 3.7 4 11.41% 1Y 10M 28D 2Y 9M 4D Franklin India Low Duration Fund Growth ₹20.5428
↑ 0.29 ₹3,827 10,000 -7.8 -8.4 -5.3 3.7 5.2 10.55% 11M 1D 1Y 2M 16D Baroda Pioneer Credit Risk Fund Growth ₹14.1134
↑ 0.24 ₹573 5,000 -1.4 -0.6 -0.7 4.1 2.1 10.34% 1Y 7M 10D 1Y 7M 9D Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹27.4593
↑ 0.24 ₹15,040 10,000 -2.1 0.1 4.7 7.3 9.6 9.48% 5M 23D 6M 25D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 27 Mar 20
(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 Below is the key information for Nippon India Credit Risk Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Corporate Bond Fund) The investment objective of the Scheme is to generate returns by predominantly investing in a portfolio of corporate debt securities with short to medium term maturities across the credit spectrum within the investment grade. The Scheme does not guarantee/indicate any returns. There can be no assurance that the schemes’ objectives will be achieved. Aditya Birla Sun Life Credit Risk Fund is a Debt - Credit Risk fund was launched on 17 Apr 15. It is a fund with Moderate risk and has given a Below is the key information for Aditya Birla Sun Life Credit Risk Fund Returns up to 1 year are on (Erstwhile Franklin India Corporate Bond Opportunities Fund) The Fund seeks to provide regular income and capital appreciation through a focus on corporate securities. Franklin India Credit Risk Fund is a Debt - Credit Risk fund was launched on 30 Nov 11. It is a fund with Moderate risk and has given a Below is the key information for Franklin India Credit Risk Fund Returns up to 1 year are on To provide regular income to investors through investment primarily in debt funds. Franklin India Low Duration Fund is a Debt - Low Duration fund was launched on 26 Jul 10. It is a fund with Moderate risk and has given a Below is the key information for Franklin India Low Duration Fund Returns up to 1 year are on (Erstwhile Baroda Pioneer Credit Opportunities Fund) The primary objective of the Scheme is to generate returns by investing in debt and money market instruments across the credit spectrum. There is no assurance or guarantee that the investment objective of the Scheme will be
realized. Baroda Pioneer Credit Risk Fund is a Debt - Credit Risk fund was launched on 23 Jan 15. It is a fund with Moderate risk and has given a Below is the key information for Baroda Pioneer Credit Risk Fund Returns up to 1 year are on To provide a combination of regular income and high liquidity by investing primarily in a mix of short term debt and money market instruments. Franklin India Ultra Short Bond Fund - Super Institutional Plan is a Debt - Ultrashort Bond fund was launched on 18 Dec 07. It is a fund with Moderate risk and has given a Below is the key information for Franklin India Ultra Short Bond Fund - Super Institutional Plan Returns up to 1 year are on 1. Nippon India Credit Risk Fund
CAGR/Annualized return of 5.7% since its launch. Ranked 21 in Credit Risk category. Return for 2019 was 1.9% , 2018 was 6.1% and 2017 was 7% . Nippon India Credit Risk Fund
Growth Launch Date 8 Jun 05 NAV (27 Mar 20) ₹22.8004 ↑ 0.40 (1.80 %) Net Assets (Cr) ₹4,628 on 29 Feb 20 Category Debt - Credit Risk AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderate Expense Ratio 1.82 Sharpe Ratio -0.56 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 14.56% Effective Maturity 2 Years 2 Months 19 Days Modified Duration 1 Year 7 Months 24 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 15 ₹10,000 29 Feb 16 ₹10,813 28 Feb 17 ₹11,934 28 Feb 18 ₹12,677 28 Feb 19 ₹13,518 29 Feb 20 ₹13,683 Returns for Nippon India Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 20 Duration Returns 1 Month -11.6% 3 Month -11.3% 6 Month -11% 1 Year -11.4% 3 Year 0.3% 5 Year 3.8% 10 Year 15 Year Since launch 5.7% Historical performance (Yearly) on absolute basis
Year Returns 2019 1.9% 2018 6.1% 2017 7% 2016 10% 2015 8.8% 2014 11% 2013 8% 2012 9.6% 2011 8.4% 2010 4.7% Fund Manager information for Nippon India Credit Risk Fund
Name Since Tenure Prashant Pimple 9 Oct 09 10.32 Yr. Kinjal Desai 25 May 18 1.69 Yr. Data below for Nippon India Credit Risk Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 10.39% Debt 89.61% Other 0% Debt Sector Allocation
Sector Value Corporate 82.03% Cash Equivalent 14.77% Securitized 3.2% Credit Quality
Rating Value A 37.28% AA 18.97% AAA 0.01% BBB 27.57% Top Securities Holdings / Portfolio
Name Holding Value Quantity RMZ Buildcon Private Limited
Debentures | -14% ₹677 Cr 10,100 Yes Bank Limited
Debentures | -10% ₹468 Cr 6,500 MARIPOSA AGRI VENTURES AND HOSPITALITIES PRIVATE LIMITED
Debentures | -7% ₹358 Cr 3,000 Vineha Enterprises Private Limited
Debentures | -6% ₹287 Cr 22,500 Renew Wind Energy (Rajasthan One) Private Limited
Debentures | -5% ₹271 Cr 3,060 Sugee Builders Private Limited
Debentures | -4% ₹203 Cr 176
↓ -25 Piramal Enterprises Limited
Debentures | -4% ₹194 Cr 1,971 INDIAN RECEIVABLE TRUST 19 FEB - 2019
Unlisted bonds | -4% ₹175 Cr 2,112
↑ 2,112 Narmada Wind Energy Private Limited
Debentures | -3% ₹171 Cr 1,940 INNOVATION TRUST XXX
Unlisted bonds | -3% ₹151 Cr 318
↑ 318 2. Aditya Birla Sun Life Credit Risk Fund
CAGR/Annualized return of 7.1% since its launch. Return for 2019 was 2.1% , 2018 was 6.6% and 2017 was 8.1% . Aditya Birla Sun Life Credit Risk Fund
Growth Launch Date 17 Apr 15 NAV (27 Mar 20) ₹14.0068 ↑ 0.27 (1.96 %) Net Assets (Cr) ₹5,115 on 29 Feb 20 Category Debt - Credit Risk AMC Birla Sun Life Asset Management Co Ltd Rating Risk Moderate Expense Ratio 1.72 Sharpe Ratio 0.16 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load 0-365 Days (1%),365 Days and above(NIL) Yield to Maturity 11.75% Effective Maturity 2 Years 6 Months 22 Days Modified Duration 1 Year 11 Months 8 Days Growth of 10,000 investment over the years.
Date Value 29 Feb 16 ₹10,697 28 Feb 17 ₹11,808 28 Feb 18 ₹12,720 28 Feb 19 ₹13,473 29 Feb 20 ₹13,965 Returns for Aditya Birla Sun Life Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 20 Duration Returns 1 Month 0% 3 Month 1.7% 6 Month -1.1% 1 Year 2.7% 3 Year 5.5% 5 Year 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2019 2.1% 2018 6.6% 2017 8.1% 2016 10.3% 2015 2014 2013 2012 2011 2010 Fund Manager information for Aditya Birla Sun Life Credit Risk Fund
Name Since Tenure Maneesh Dangi 17 Apr 15 4.79 Yr. Sunaina Cunha 1 Apr 17 2.84 Yr. Data below for Aditya Birla Sun Life Credit Risk Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 7.54% Equity 0.08% Debt 92.38% Debt Sector Allocation
Sector Value Corporate 69.24% Government 20.34% Cash Equivalent 6.74% Securitized 3.58% Credit Quality
Rating Value A 14.14% AA 28.54% AAA 54.87% BBB 0.82% Below B 1.63% Top Securities Holdings / Portfolio
Name Holding Value Quantity SP Imperial Star Private Limited
Unlisted bonds | -5% ₹260 Cr 185 ADANI PROPERTIES PRIVATE LIMITED
Debentures | -3% ₹175 Cr 149
↑ 65 L & T Vadodara Bharuch Tollway Limited
Debentures | -3% ₹170 Cr 170,850 ONGC Petro Additions Limited
Debentures | -3% ₹150 Cr 150 Tata Housing Development Company Limited
Debentures | -3% ₹150 Cr 1,500
↑ 1,500 JSW Energy Limited
Debentures | -3% ₹149 Cr 1,490
↑ 490 Tata Realty And Infrastructure Limited
Debentures | -3% ₹149 Cr 1,500
↑ 1,500 JM Financial Products Limited
Debentures | -3% ₹147 Cr 1,500 Shriram - City Union Finance Limited
Debentures | -3% ₹139 Cr 1,400
↑ 1,400 Net Receivables / (Payables)
Net Current Assets | -3% ₹136 Cr 3. Franklin India Credit Risk Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 16 in Credit Risk category. Return for 2019 was 4% , 2018 was 8.4% and 2017 was 8.3% . Franklin India Credit Risk Fund
Growth Launch Date 30 Nov 11 NAV (27 Mar 20) ₹18.6158 ↑ 0.37 (2.03 %) Net Assets (Cr) ₹5,481 on 29 Feb 20 Category Debt - Credit Risk AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 1.75 Sharpe Ratio -0.6 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-12 Months (3%),12-24 Months (2%),24-36 Months (1%),36 Months and above(NIL) Yield to Maturity 11.41% Effective Maturity 2 Years 9 Months 4 Days Modified Duration 1 Year 10 Months 28 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 15 ₹10,000 29 Feb 16 ₹10,688 28 Feb 17 ₹11,869 28 Feb 18 ₹12,744 28 Feb 19 ₹13,826 29 Feb 20 ₹13,850 Returns for Franklin India Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 20 Duration Returns 1 Month -4% 3 Month -6.5% 6 Month -5.9% 1 Year -4.7% 3 Year 3.7% 5 Year 5.8% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2019 4% 2018 8.4% 2017 8.3% 2016 8.7% 2015 9.3% 2014 11.9% 2013 8.6% 2012 11% 2011 2010 Fund Manager information for Franklin India Credit Risk Fund
Name Since Tenure Santosh Kamath 15 Apr 14 5.72 Yr. Kunal Agrawal 25 Oct 18 1.18 Yr. Data below for Franklin India Credit Risk Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 3.62% Debt 96.38% Debt Sector Allocation
Sector Value Corporate 89.39% Cash Equivalent 10.41% Government 0.2% Credit Quality
Rating Value A 42.26% AA 49.72% AAA 2.9% B 0.23% BBB 2.49% Below B 2.4% Top Securities Holdings / Portfolio
Name Holding Value Quantity SHRIRAM TRANSPORT FINANCE COMPANY LIMITED
Debentures | -7% ₹392 Cr 3,930 ADANI RAIL INFRA PRIVATE LIMITED
Debentures | -6% ₹352 Cr 300 Rishanth Wholesale Trading Private Ltd.
Debentures | -4% ₹232 Cr 230 Piramal Enterprises Limited
Debentures | -4% ₹230 Cr 2,300 Andhra Pradesh Capital Region Development Authority
Debentures | -4% ₹200 Cr 10,140 PIRAMAL CAPITAL & HOUSING FINANCE LIMITED
Debentures | -3% ₹164 Cr 2,125 AADARSHINI REAL ESTATE DEVELOPERS PRIVATE LIMITED
Debentures | -3% ₹151 Cr 30 PIPELINE INFRASTRUCTURE PRIVATE LIMITED
Debentures | -2% ₹137 Cr 1,350 Yes Bank Limited
Debentures | -2% ₹132 Cr 1,695 Coastal Gujarat Power Limited
Debentures | -2% ₹125 Cr 1,150 4. Franklin India Low Duration Fund
CAGR/Annualized return of 7.7% since its launch. Ranked 3 in Low Duration category. Return for 2019 was 5.2% , 2018 was 8.4% and 2017 was 8.3% . Franklin India Low Duration Fund
Growth Launch Date 26 Jul 10 NAV (27 Mar 20) ₹20.5428 ↑ 0.29 (1.44 %) Net Assets (Cr) ₹3,827 on 29 Feb 20 Category Debt - Low Duration AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.78 Sharpe Ratio -0.72 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load 0-3 Months (0.5%),3 Months and above(NIL) Yield to Maturity 10.55% Effective Maturity 1 Year 2 Months 16 Days Modified Duration 11 Months 1 Day Growth of 10,000 investment over the years.
Date Value 28 Feb 15 ₹10,000 29 Feb 16 ₹10,887 28 Feb 17 ₹12,059 28 Feb 18 ₹12,972 28 Feb 19 ₹14,130 29 Feb 20 ₹13,885 Returns for Franklin India Low Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 20 Duration Returns 1 Month -2.9% 3 Month -7.8% 6 Month -8.4% 1 Year -5.3% 3 Year 3.7% 5 Year 6% 10 Year 15 Year Since launch 7.7% Historical performance (Yearly) on absolute basis
Year Returns 2019 5.2% 2018 8.4% 2017 8.3% 2016 9.7% 2015 9.8% 2014 10.1% 2013 9.5% 2012 10.2% 2011 9.9% 2010 Fund Manager information for Franklin India Low Duration Fund
Name Since Tenure Santosh Kamath 15 Apr 14 5.72 Yr. Kunal Agrawal 15 Apr 14 5.72 Yr. Data below for Franklin India Low Duration Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 14.87% Debt 85.13% Debt Sector Allocation
Sector Value Corporate 94.45% Cash Equivalent 3.15% Government 2.39% Credit Quality
Rating Value A 47.04% AA 36.38% AAA 11.51% B 0.34% Below B 4.73% Top Securities Holdings / Portfolio
Name Holding Value Quantity Greenko Clean Energy Projects Private Limited
Debentures | -7% ₹301 Cr 30,000 Small Business Fincredit India Private Limited
Debentures | -6% ₹248 Cr 2,500 Renew Power Ventures Private Limited
Debentures | -5% ₹217 Cr 2,170 Tata Realty And Infrastructure Limited
Commercial Paper | -5% ₹203 Cr 4,300 ESS KAY FINCORP LIMITED
Debentures | -5% ₹196 Cr 2,000 Tata Projects Limited
Commercial Paper | -5% ₹195 Cr 4,000 ReNew Solar Power Private Limited
Debentures | -4% ₹153 Cr 1,498 Call, Cash & Other Assets
Net Current Assets | -4% ₹153 Cr JM FINANCIAL ASSET RECONSTRUCTION COMPANY LIMITED
Debentures | -4% ₹148 Cr 1,500 STERLITE POWER GRID VENTURES LIMITED
Debentures | -4% ₹145 Cr 1,450 5. Baroda Pioneer Credit Risk Fund
CAGR/Annualized return of 6.9% since its launch. Return for 2019 was 2.1% , 2018 was 5.9% and 2017 was 8.4% . Baroda Pioneer Credit Risk Fund
Growth Launch Date 23 Jan 15 NAV (27 Mar 20) ₹14.1134 ↑ 0.24 (1.74 %) Net Assets (Cr) ₹573 on 29 Feb 20 Category Debt - Credit Risk AMC Baroda Pioneer Asset Management Co. Ltd. Rating Risk Moderate Expense Ratio 1.82 Sharpe Ratio 0.18 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Yield to Maturity 10.34% Effective Maturity 1 Year 7 Months 9 Days Modified Duration 1 Year 7 Months 10 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 15 ₹10,000 29 Feb 16 ₹10,943 28 Feb 17 ₹12,249 28 Feb 18 ₹13,127 28 Feb 19 ₹13,917 29 Feb 20 ₹14,418 Returns for Baroda Pioneer Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 20 Duration Returns 1 Month -3.4% 3 Month -1.4% 6 Month -0.6% 1 Year -0.7% 3 Year 4.1% 5 Year 6.7% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2019 2.1% 2018 5.9% 2017 8.4% 2016 11.3% 2015 2014 2013 2012 2011 2010 Fund Manager information for Baroda Pioneer Credit Risk Fund
Name Since Tenure Alok Sahoo 23 Jan 15 4.69 Yr. Karn Kumar 24 Jul 17 2.19 Yr. Data below for Baroda Pioneer Credit Risk Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 18.33% Debt 81.67% Debt Sector Allocation
Sector Value Corporate 75.43% Cash Equivalent 18.33% Government 6.23% Credit Quality
Rating Value A 12.59% AA 67.17% AAA 15.31% BBB 3.35% Below B 1.58% Top Securities Holdings / Portfolio
Name Holding Value Quantity Edelweiss Commodities Services Limited
Debentures | -10% ₹55 Cr 560 Aspire Home Finance Corporation Limited
Debentures | -9% ₹50 Cr 500 IndusInd Bank Limited
Debentures | -8% ₹48 Cr 481 Vedanta Limited
Debentures | -6% ₹35 Cr 350 Tata Steel Limited
Debentures | -6% ₹34 Cr 210
↑ 210 Treps
CBLO/Reverse Repo | -5% ₹30 Cr ICICI Bank Limited
Debentures | -4% ₹26 Cr 250 Net Receivable / Payable
Net Current Assets | -4% ₹25 Cr Piramal Enterprises Limited
Debentures | -4% ₹25 Cr 250
↑ 250 HDFC Bank Limited
Debentures | -4% ₹22 Cr 200 6. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized return of 8.6% since its launch. Return for 2019 was 9.6% , 2018 was 8.7% and 2017 was 8.2% . Franklin India Ultra Short Bond Fund - Super Institutional Plan
Growth Launch Date 18 Dec 07 NAV (27 Mar 20) ₹27.4593 ↑ 0.24 (0.89 %) Net Assets (Cr) ₹15,040 on 29 Feb 20 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.42 Sharpe Ratio 0.39 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 9.48% Effective Maturity 6 Months 25 Days Modified Duration 5 Months 23 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 15 ₹10,000 29 Feb 16 ₹10,956 28 Feb 17 ₹12,039 28 Feb 18 ₹12,984 28 Feb 19 ₹14,177 29 Feb 20 ₹14,860 Returns for Franklin India Ultra Short Bond Fund - Super Institutional Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 20 Duration Returns 1 Month 0.6% 3 Month -2.1% 6 Month 0.1% 1 Year 4.7% 3 Year 7.3% 5 Year 8.2% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2019 9.6% 2018 8.7% 2017 8.2% 2016 9.7% 2015 9.7% 2014 10% 2013 10% 2012 10.3% 2011 9.4% 2010 5.9% Fund Manager information for Franklin India Ultra Short Bond Fund - Super Institutional Plan
Name Since Tenure Santosh Kamath 25 Oct 18 1.18 Yr. Pallab Roy 1 Jun 08 11.59 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 23.54% Debt 76.46% Debt Sector Allocation
Sector Value Corporate 76.8% Cash Equivalent 22.2% Government 1% Credit Quality
Rating Value A 18.96% AA 66.09% AAA 14.95% Top Securities Holdings / Portfolio
Name Holding Value Quantity Vedanta Limited
Debentures | -5% ₹795 Cr 7,900 Call, Cash & Other Assets
Net Current Assets | -4% ₹638 Cr Bharti Airtel Limited
Debentures | -4% ₹553 Cr 5,500 JM FINANCIAL CREDIT SOLUTIONS LIMITED
Debentures | -4% ₹540 Cr 5,400 Indostar Capital Finance Limited
Debentures | -3% ₹439 Cr 4,400 Bharti Airtel Limited
Debentures | -3% ₹400 Cr 4,000 INDOSTAR CAPITAL FINANCE LIMITED
Debentures | -3% ₹390 Cr 3,900 NIRCHEM Cement Limited
Debentures | -3% ₹378 Cr 3,750 EDELWEISS COMMODITIES SERVICES LIMITED
Debentures | -2% ₹371 Cr 7,500 EDELWEISS COMMODITIES SERVICES LIMITED
Debentures | -2% ₹361 Cr 3,650
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.
How to Invest in Debt Lump Sum Online?
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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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