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6 Best Debt Mutual Funds for Lump sum Investments 2019
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 19 - 20
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 (%) 2018 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity BOI AXA Credit Risk Fund Growth ₹13.1663
↑ 0.00 ₹799 5,000 1.4 -2.7 -0.8 6.4 -0.3 14.14% 1Y 8M 5D 2Y 8M 16D Aditya Birla Sun Life Credit Risk Fund Growth ₹13.6127
↓ 0.00 ₹7,318 1,000 1.1 3.2 5.9 8 6.6 12.03% 1Y 5M 23D 1Y 11M 1D Reliance Credit Risk Fund Growth ₹25.6949
↓ -0.01 ₹9,628 500 2.2 4.2 6.6 7.7 6.1 11.29% 1Y 8M 5D 2Y 3M 14D Franklin India Credit Risk Fund Growth ₹19.4722
↓ -0.03 ₹7,157 5,000 2.2 5.4 8.4 9.1 8.4 11.14% 2Y 7D 2Y 10M 11D ICICI Prudential Regular Savings Fund Growth ₹19.7597
↓ 0.00 ₹11,534 10,000 1.8 4.1 6.9 8 6.6 10.5% 1Y 2M 12D 1Y 5M 19D Baroda Pioneer Treasury Advantage Fund Growth ₹2,163.36
↓ -0.03 ₹743 5,000 1.7 3.5 6.8 7.8 7 10.46% 9M 7D 11M 20D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 19 Mar 19
(Erstwhile BOI AXA Corporate Credit Spectrum Fund) The Scheme’s investment objective is to generate capital appreciation over the long term by investing predominantly in corporate debt across the credit spectrum within the universe of investment grade rating. To achieve this objective, the Scheme will seek to make investments in rated, unrated instruments and structured obligations of public and private companies. BOI AXA Credit Risk Fund is a Debt - Credit Risk fund was launched on 27 Feb 15. It is a fund with Moderate risk and has given a Below is the key information for BOI AXA 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 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. Reliance 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 Reliance 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 The fund’s objective is to provide reasonable returns, by maintaining an optimum balance of safety, liquidity and yield, through investments in a basket of debt and money market instruments with a view to delivering consistent performance. However, there can be no assurance that the investment objective of the Scheme will be realized. ICICI Prudential Regular Savings Fund is a Debt - Credit Risk fund was launched on 3 Dec 10. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Regular Savings 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 1. BOI AXA Credit Risk Fund
CAGR/Annualized return of 7% since its launch. Return for 2018 was -0.3% , 2017 was 9.3% and 2016 was 11.2% . BOI AXA Credit Risk Fund
Growth Launch Date 27 Feb 15 NAV (19 Mar 19) ₹13.1663 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹799 on 28 Feb 19 Category Debt - Credit Risk AMC BOI AXA Investment Mngrs Private Ltd Rating Risk Moderate Expense Ratio 2.17 Sharpe Ratio -0.55 Information Ratio -0.28 Alpha Ratio -5.94 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-12 Months (4%),12-24 Months (3%),24-36 Months (2%),36 Months and above(NIL) Yield to Maturity 14.14% Effective Maturity 2 Years 8 Months 16 Days Modified Duration 1 Year 8 Months 5 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 15 ₹10,000 29 Feb 16 ₹10,864 28 Feb 17 ₹12,165 28 Feb 18 ₹13,172 28 Feb 19 ₹13,116 Returns for BOI AXA Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Mar 19 Duration Returns 1 Month 0% 3 Month 1.4% 6 Month -2.7% 1 Year -0.8% 3 Year 6.4% 5 Year 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2018 -0.3% 2017 9.3% 2016 11.2% 2015 2014 2013 2012 2011 2010 2009 Fund Manager information for BOI AXA Credit Risk Fund
Name Since Tenure Alok Singh 27 Feb 15 3.93 Yr. Data below for BOI AXA Credit Risk Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Debt 102.47% Debt Sector Allocation
Sector Value Corporate 102.47% Credit Quality
Rating Value A 41.85% AA 15.08% BBB 14.7% Below B 3.88% Top Securities Holdings / Portfolio
Name Holding Value Quantity Karuna Healthcare Private Limited
Debentures | -14% ₹113 Cr 10,230,000
↓ -3,000,000 SINTEX-BAPL Limited
Debentures | -13% ₹107 Cr 1,000,000,000 Coffee Day Natural Resources Private Limited
Debentures | -12% ₹96 Cr 8,600,000 DRSR Logistics Services Private Limited
Debentures | -8% ₹64 Cr 5,070,000 Dewan Housing Finance Corporation Limited
Debentures | -7% ₹56 Cr 5,700,000 RKV Enterprises Private Limited
Debentures | -6% ₹45 Cr 4,000,000 Dewan Housing Finance Corporation Limited
Debentures | -5% ₹44 Cr 4,450,000 Marck Remedies Private Limited
Debentures | -5% ₹42 Cr 366,700,000 Accelarating Education And Development Private Limited
Debentures | -5% ₹38 Cr 400,000,000 Accelarating Education And Development Private Limited
Debentures | -5% ₹38 Cr 400,000,000 2. Aditya Birla Sun Life Credit Risk Fund
CAGR/Annualized return of 8.2% since its launch. Return for 2018 was 6.6% , 2017 was 8.1% and 2016 was 10.3% . Aditya Birla Sun Life Credit Risk Fund
Growth Launch Date 17 Apr 15 NAV (19 Mar 19) ₹13.6127 ↓ 0.00 (-0.03 %) Net Assets (Cr) ₹7,318 on 28 Feb 19 Category Debt - Credit Risk AMC Birla Sun Life Asset Management Co Ltd Rating Risk Moderate Expense Ratio 2 Sharpe Ratio 1.24 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 12.03% Effective Maturity 1 Year 11 Months 1 Day Modified Duration 1 Year 5 Months 23 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 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 19 Mar 19 Duration Returns 1 Month 0.8% 3 Month 1.1% 6 Month 3.2% 1 Year 5.9% 3 Year 8% 5 Year 10 Year 15 Year Since launch 8.2% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.6% 2017 8.1% 2016 10.3% 2015 2014 2013 2012 2011 2010 2009 Fund Manager information for Aditya Birla Sun Life Credit Risk Fund
Name Since Tenure Maneesh Dangi 17 Apr 15 3.8 Yr. Sunaina Cunha 1 Apr 17 1.84 Yr. Data below for Aditya Birla Sun Life Credit Risk Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 14.84% Equity 0.09% Debt 85.08% Debt Sector Allocation
Sector Value Corporate 74.38% Cash Equivalent 13.13% Government 7.32% Securitized 5.08% Credit Quality
Rating Value A 24.55% AA 32.62% AAA 27.9% B 0.12% BBB 6.33% Below B 2.03% Top Securities Holdings / Portfolio
Name Holding Value Quantity Sprit Textiles Private Limited
Debentures | -6% ₹417 Cr 2,785 Clearing Corporation Of India Limited
CBLO | -4% ₹317 Cr Vedanta Limited
Debentures | -4% ₹298 Cr 3,000 Adilink Infra & Multitrading Private Limited
Debentures | -4% ₹293 Cr 2,650 SPANDANA SPHOORTY FINANCIAL LIMITED
Debentures | -3% ₹243 Cr 3,200
↓ -675 SP Imperial Star Private Limited
Unlisted bonds | -3% ₹238 Cr 185 STATE BANK OF INDIA
Debentures | -3% ₹189 Cr 1,888
↓ -100 Net Receivables / (Payables)
Net Current Assets | -2% ₹171 Cr L & T Vadodara Bharuch Tollway Limited
Debentures | -2% ₹167 Cr 170,850 Tata Motors Finance Limited
Debentures | -2% ₹158 Cr 1,330 3. Reliance Credit Risk Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 21 in Credit Risk category. Return for 2018 was 6.1% , 2017 was 7% and 2016 was 10% . Reliance Credit Risk Fund
Growth Launch Date 8 Jun 05 NAV (19 Mar 19) ₹25.6949 ↓ -0.01 (-0.04 %) Net Assets (Cr) ₹9,628 on 28 Feb 19 Category Debt - Credit Risk AMC Reliance Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderate Expense Ratio 2.13 Sharpe Ratio 2.02 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 11.29% Effective Maturity 2 Years 3 Months 14 Days Modified Duration 1 Year 8 Months 5 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 14 ₹10,000 28 Feb 15 ₹11,136 29 Feb 16 ₹12,042 28 Feb 17 ₹13,290 28 Feb 18 ₹14,117 28 Feb 19 ₹15,054 Returns for Reliance Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Mar 19 Duration Returns 1 Month 0.8% 3 Month 2.2% 6 Month 4.2% 1 Year 6.6% 3 Year 7.7% 5 Year 8.6% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.1% 2017 7% 2016 10% 2015 8.8% 2014 11% 2013 8% 2012 9.6% 2011 8.4% 2010 4.7% 2009 8% Fund Manager information for Reliance Credit Risk Fund
Name Since Tenure Prashant Pimple 9 Oct 09 9.32 Yr. Kinjal Desai 25 May 18 0.69 Yr. Data below for Reliance Credit Risk Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 4.64% Debt 95.36% Other 0% Debt Sector Allocation
Sector Value Corporate 87.48% Securitized 6.49% Cash Equivalent 4.64% Government 1.39% Credit Quality
Rating Value A 37.19% AA 41.34% AAA 6.45% BBB 8.58% Top Securities Holdings / Portfolio
Name Holding Value Quantity RMZ Buildcon Private Limited
Debentures | -8% ₹802 Cr 10,100 Yes Bank Limited
Debentures | -6% ₹592 Cr 6,500 Vodafone Mobile Services Limited
Debentures | -4% ₹397 Cr 4,000 Renew Power Ventures Private Limited
Debentures | -3% ₹331 Cr 3,300 MARIPOSA AGRI VENTURES AND HOSPITALITIES PRIVATE LIMITED
Debentures | -3% ₹317 Cr 3,000 Indiabulls Housing Finance Limited
Debentures | -3% ₹296 Cr 3,000 Nirma Limited
Debentures | -3% ₹292 Cr 3,000 Renew Wind Energy (Rajasthan One) Private Limited
Debentures | -3% ₹288 Cr 3,060 Aqua Space Developers Pvt. Ltd.
Debentures | -3% ₹250 Cr 2,500 Vineha Enterprises Private Limited
Debentures | -3% ₹250 Cr 22,500 4. Franklin India Credit Risk Fund
CAGR/Annualized return of 9.6% since its launch. Ranked 16 in Credit Risk category. Return for 2018 was 8.4% , 2017 was 8.3% and 2016 was 8.7% . Franklin India Credit Risk Fund
Growth Launch Date 30 Nov 11 NAV (19 Mar 19) ₹19.4722 ↓ -0.03 (-0.13 %) Net Assets (Cr) ₹7,157 on 28 Feb 19 Category Debt - Credit Risk AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 1.83 Sharpe Ratio 2.46 Information Ratio 1.8 Alpha Ratio 0.54 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 11.14% Effective Maturity 2 Years 10 Months 11 Days Modified Duration 2 Years 7 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 14 ₹10,000 28 Feb 15 ₹11,248 29 Feb 16 ₹12,022 28 Feb 17 ₹13,350 28 Feb 18 ₹14,334 28 Feb 19 ₹15,552 Returns for Franklin India Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Mar 19 Duration Returns 1 Month 0.8% 3 Month 2.2% 6 Month 5.4% 1 Year 8.4% 3 Year 9.1% 5 Year 9.2% 10 Year 15 Year Since launch 9.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 8.4% 2017 8.3% 2016 8.7% 2015 9.3% 2014 11.9% 2013 8.6% 2012 11% 2011 2010 2009 Fund Manager information for Franklin India Credit Risk Fund
Name Since Tenure Santosh Kamath 15 Apr 14 4.88 Yr. Kunal Agrawal 25 Oct 18 0.35 Yr. Data below for Franklin India Credit Risk Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 0.89% Debt 97.19% Other 1.92% Debt Sector Allocation
Sector Value Corporate 96.85% Cash Equivalent 0.89% Government 0.34% Credit Quality
Rating Value A 55.52% AA 43.28% AAA 1.19% Top Securities Holdings / Portfolio
Name Holding Value Quantity DOLVI Minerals & Metals Private Limited
Debentures | -6% ₹465 Cr 2,750 SHRIRAM TRANSPORT FINANCE COMPANY LIMITED
Debentures | -5% ₹386 Cr 3,930 Idea Cellular Limited
Debentures | -5% ₹332 Cr 3,370 ADANI RAIL INFRA PRIVATE LIMITED
Debentures | -4% ₹314 Cr 300 Renew Power Ventures Private Limited
Debentures | -4% ₹277 Cr 2,795 EDELWEISS COMMODITIES SERVICES LIMITED
Debentures | -3% ₹240 Cr 2,400 Rishanth Wholesale Trading Private Ltd.
Debentures | -3% ₹231 Cr 230 Piramal Enterprises Limited
Debentures | -3% ₹230 Cr 2,300 Andhra Pradesh Capital Region Development Authority
Debentures | -3% ₹205 Cr 10,165
↓ -60 Vedanta Limited
Debentures | -3% ₹181 Cr 1,830 5. ICICI Prudential Regular Savings Fund
CAGR/Annualized return of 8.6% since its launch. Ranked 26 in Credit Risk category. Return for 2018 was 6.6% , 2017 was 6.8% and 2016 was 9.5% . ICICI Prudential Regular Savings Fund
Growth Launch Date 3 Dec 10 NAV (19 Mar 19) ₹19.7597 ↓ 0.00 (0.00 %) Net Assets (Cr) ₹11,534 on 28 Feb 19 Category Debt - Credit Risk AMC ICICI Prudential Asset Management Company Limited Rating ☆ Risk Moderate Expense Ratio 1.83 Sharpe Ratio 2.51 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 100 Exit Load 0-1 Years (1%),1 Years and above(NIL) Yield to Maturity 10.5% Effective Maturity 1 Year 5 Months 19 Days Modified Duration 1 Year 2 Months 12 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 14 ₹10,000 28 Feb 15 ₹11,168 29 Feb 16 ₹11,959 28 Feb 17 ₹13,245 28 Feb 18 ₹14,080 28 Feb 19 ₹15,040 Returns for ICICI Prudential Regular Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Mar 19 Duration Returns 1 Month 0.9% 3 Month 1.8% 6 Month 4.1% 1 Year 6.9% 3 Year 8% 5 Year 8.5% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.6% 2017 6.8% 2016 9.5% 2015 9% 2014 11% 2013 7.5% 2012 9.4% 2011 8.9% 2010 2009 Fund Manager information for ICICI Prudential Regular Savings Fund
Name Since Tenure Manish Banthia 7 Nov 16 2.23 Yr. Akhil Kakkar 3 Jun 17 1.66 Yr. Data below for ICICI Prudential Regular Savings Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 10.26% Debt 89.74% Debt Sector Allocation
Sector Value Corporate 87.13% Cash Equivalent 10.26% Securitized 2.45% Government 0.16% Credit Quality
Rating Value A 33.78% AA 54.61% AAA 6.4% BBB 1.49% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Limited
Debentures | -5% ₹583 Cr 6,000 Treps
CBLO/Reverse Repo | -4% ₹472 Cr Net Current Assets
Net Current Assets | -3% ₹374 Cr Indian Hospitals Corporation Limited
Debentures | -3% ₹366 Cr 3,800 Aqua Space Developers Pvt. Ltd.
Debentures | -3% ₹300 Cr 3,000 Muthoot Finance Limited
Debentures | -2% ₹276 Cr 2,870,000 Welspun Renewables Energy Private Limited
Debentures | -2% ₹273 Cr 2,850 Jay Properties Private Limited
Debentures | -2% ₹265 Cr 2,485 Prestige Estates Projects Limited
Debentures | -2% ₹247 Cr 2,500 Aditya Birla Fashion And Retail Limited
Debentures | -2% ₹239 Cr 1,900 6. Baroda Pioneer Treasury Advantage Fund
CAGR/Annualized return of 8.3% since its launch. Ranked 4 in Low Duration category. Return for 2018 was 7% , 2017 was 7.6% and 2016 was 9.2% . Baroda Pioneer Treasury Advantage Fund
Growth Launch Date 24 Jun 09 NAV (19 Mar 19) ₹2,163.36 ↓ -0.03 (0.00 %) Net Assets (Cr) ₹743 on 28 Feb 19 Category Debt - Low Duration AMC Baroda Pioneer Asset Management Co. Ltd. Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.84 Sharpe Ratio 3.6 Information Ratio 0.73 Alpha Ratio -7.19 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 10.46% Effective Maturity 11 Months 20 Days Modified Duration 9 Months 7 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 14 ₹10,000 28 Feb 15 ₹10,937 29 Feb 16 ₹11,902 28 Feb 17 ₹13,038 28 Feb 18 ₹13,954 28 Feb 19 ₹14,876 Returns for Baroda Pioneer Treasury Advantage Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 19 Mar 19 Duration Returns 1 Month 0.9% 3 Month 1.7% 6 Month 3.5% 1 Year 6.8% 3 Year 7.8% 5 Year 8.3% 10 Year 15 Year Since launch 8.3% Historical performance (Yearly) on absolute basis
Year Returns 2018 7% 2017 7.6% 2016 9.2% 2015 9% 2014 9.4% 2013 9.3% 2012 10.1% 2011 9.2% 2010 5.8% 2009 Fund Manager information for Baroda Pioneer Treasury Advantage Fund
Name Since Tenure Hetal Shah 24 Jun 09 9.61 Yr. Alok Sahoo 24 Jun 09 9.61 Yr. Data below for Baroda Pioneer Treasury Advantage Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 18.08% Debt 81.92% Debt Sector Allocation
Sector Value Corporate 86.52% Cash Equivalent 13.48% Credit Quality
Rating Value A 4.94% AA 54.36% AAA 40.7% Top Securities Holdings / Portfolio
Name Holding Value Quantity Indiabulls Housing Finance Limited
Debentures | -17% ₹130 Cr 1,300 Piramal Enterprises Limited
Debentures | -13% ₹95 Cr 950 ARM INFRA & UTILITIES PRIVATE LIMITED
Debentures | -11% ₹78 Cr 750
↑ 750 Dewan Housing Finance Corporation Limited
Debentures | -10% ₹73 Cr 750,000 Yes Bank Limited
Debentures | -6% ₹45 Cr 495 Cblo
CBLO | -6% ₹44 Cr Edelweiss Commodities Services Limited
Debentures | -6% ₹44 Cr 440 Aspire Home Finance Corporation Limited
Debentures | -4% ₹33 Cr 330 Net Receivable / Payable
Net Current Assets | -4% ₹32 Cr Utkarsh Small Finance Bank Limited
Certificate of Deposit | -4% ₹29 Cr 3,000
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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