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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 (%) 2017 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity BOI AXA Credit Risk Fund Growth ₹13.1016
↓ 0.00 ₹1,007 5,000 1.8 -3.9 -0.1 6.7 -0.3 12.83% 1Y 5M 8D 2Y 5M 12D Aditya Birla Sun Life Credit Risk Fund Growth ₹13.5274
↑ 0.00 ₹7,940 1,000 2.4 3 6.4 8.3 6.6 11.6% 1Y 6M 11D 2Y 7D Reliance Credit Risk Fund Growth ₹25.3543
↑ 0.00 ₹10,424 500 2.4 3.5 6.3 7.8 6.1 10.88% 1Y 8M 16D 2Y 1M 24D Franklin India Low Duration Fund Growth ₹21.322
↑ 0.00 ₹6,528 10,000 2.8 4.6 8.7 8.9 8.4 10.35% 9M 24D 11M 4D DHFL Pramerica Credit Risk Fund Growth ₹14.2787
↑ 0.00 ₹987 5,000 2.2 3 5.3 7.4 5.1 10.34% 1Y 5M 1D 1Y 10M 24D Kotak Credit Risk Fund Growth ₹20.0237
↓ 0.00 ₹4,959 5,000 2.4 3.4 6.4 7.8 6.2 10.29% 1Y 6M 25D 2Y 11M 1D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 18 Jan 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 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 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. DHFL Pramerica 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 DHFL Pramerica Credit Risk Fund Returns up to 1 year are on (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 Below is the key information for Kotak Credit Risk Fund Returns up to 1 year are on 1. BOI AXA Credit Risk Fund
CAGR/Annualized return of 7.2% 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 (18 Jan 19) ₹13.1016 ↓ 0.00 (0.00 %) Net Assets (Cr) ₹1,007 on 30 Nov 18 Category Debt - Credit Risk AMC BOI AXA Investment Mngrs Private Ltd Rating Risk Moderate Expense Ratio 2.17 Sharpe Ratio -0.67 Information Ratio -0.25 Alpha Ratio -4.5 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 12.83% Effective Maturity 2 Years 5 Months 12 Days Modified Duration 1 Year 5 Months 8 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 15 ₹10,744 31 Dec 16 ₹11,949 31 Dec 17 ₹13,063 31 Dec 18 ₹13,026 Returns for BOI AXA Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 1% 3 Month 1.8% 6 Month -3.9% 1 Year -0.1% 3 Year 6.7% 5 Year 10 Year 15 Year Since launch 7.2% Historical performance (Yearly) on absolute basis
Year Returns 2017 -0.3% 2016 9.3% 2015 11.2% 2014 2013 2012 2011 2010 2009 2008 Fund Manager information for BOI AXA Credit Risk Fund
Name Since Tenure Alok Singh 27 Feb 15 3.68 Yr. Data below for BOI AXA Credit Risk Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 11.71% Debt 88.29% Debt Sector Allocation
Sector Value Corporate 88.29% Cash Equivalent 11.71% Credit Quality
Rating Value A 24.22% AA 17.57% AAA 16.33% BBB 16.42% Below B 3.86% Top Securities Holdings / Portfolio
Name Holding Value Quantity Karuna Healthcare Private Limited
Debentures | -14% ₹144 Cr 13,230,000 SINTEX-BAPL Limited
Debentures | -10% ₹106 Cr 1,000,000,000 Coffee Day Natural Resources Private Limited
Debentures | -9% ₹95 Cr 8,600,000 Cblo
CBLO | -7% ₹73 Cr DRSR Logistics Services Private Limited
Debentures | -6% ₹63 Cr 5,070,000 Dewan Housing Finance Corporation Limited
Debentures | -6% ₹56 Cr 5,700,000 Ensource Consulting Private Limited
Debentures | -5% ₹52 Cr 5,000,000 Dewan Housing Finance Corporation Limited
Debentures | -4% ₹44 Cr 4,450,000 RKV Enterprises Private Limited
Debentures | -4% ₹43 Cr 4,000,000 Marck Remedies Private Limited
Debentures | -4% ₹43 Cr 3,667,000 2. Aditya Birla Sun Life Credit Risk Fund
CAGR/Annualized return of 8.4% 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 (18 Jan 19) ₹13.5274 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹7,940 on 30 Nov 18 Category Debt - Credit Risk AMC Birla Sun Life Asset Management Co Ltd Rating Risk Moderate Expense Ratio 1.97 Sharpe Ratio 1.28 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load 0-365 Days (1%),365 Days and above(NIL) Yield to Maturity 11.6% Effective Maturity 2 Years 7 Days Modified Duration 1 Year 6 Months 11 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 15 ₹10,591 31 Dec 16 ₹11,681 31 Dec 17 ₹12,626 31 Dec 18 ₹13,460 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 18 Jan 19 Duration Returns 1 Month 0.6% 3 Month 2.4% 6 Month 3% 1 Year 6.4% 3 Year 8.3% 5 Year 10 Year 15 Year Since launch 8.4% Historical performance (Yearly) on absolute basis
Year Returns 2017 6.6% 2016 8.1% 2015 10.3% 2014 2013 2012 2011 2010 2009 2008 Fund Manager information for Aditya Birla Sun Life Credit Risk Fund
Name Since Tenure Maneesh Dangi 17 Apr 15 3.54 Yr. Sunaina Cunha 1 Apr 17 1.58 Yr. Data below for Aditya Birla Sun Life Credit Risk Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 9.99% Equity 0.08% Debt 88.19% Other 1.74% Debt Sector Allocation
Sector Value Corporate 73.32% Government 11.17% Cash Equivalent 9.06% Securitized 4.62% Credit Quality
Rating Value A 23.82% AA 23.85% AAA 34.73% B 0.1% BB 1.05% BBB 6.53% Top Securities Holdings / Portfolio
Name Holding Value Quantity Sprit Textiles Private Limited
Debentures | -6% ₹451 Cr 2,785 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -4% ₹347 Cr 7,500
↑ 7,500 SPANDANA SPHOORTY FINANCIAL LIMITED
Debentures | -4% ₹295 Cr 3,875 Adilink Infra & Multitrading Private Limited
Debentures | -4% ₹289 Cr 2,650 SP Imperial Star Private Limited
Unlisted bonds | -3% ₹234 Cr 185 STATE BANK OF INDIA
Debentures | -3% ₹202 Cr 2,000
↑ 2,000 EMBASSY PROPERTY DEVELOPMENTS PRIVATE LIMITED
Debentures | -2% ₹200 Cr 200
↓ -30 L & T Vadodara Bharuch Tollway Limited
Debentures | -2% ₹169 Cr 173,350 Adani Infra (India) Limited
Debentures | -2% ₹162 Cr 150 Belstar Investment And Finance Private Limited
Debentures | -2% ₹155 Cr 2,314 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 (18 Jan 19) ₹25.3543 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹10,424 on 30 Nov 18 Category Debt - Credit Risk AMC Reliance Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderate Expense Ratio 2.13 Sharpe Ratio 1.18 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 10.88% Effective Maturity 2 Years 1 Month 24 Days Modified Duration 1 Year 8 Months 16 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹11,097 31 Dec 15 ₹12,071 31 Dec 16 ₹13,279 31 Dec 17 ₹14,213 31 Dec 18 ₹15,074 Returns for Reliance Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 1% 3 Month 2.4% 6 Month 3.5% 1 Year 6.3% 3 Year 7.8% 5 Year 8.5% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2017 6.1% 2016 7% 2015 10% 2014 8.8% 2013 11% 2012 8% 2011 9.6% 2010 8.4% 2009 4.7% 2008 8% Fund Manager information for Reliance Credit Risk Fund
Name Since Tenure Prashant Pimple 9 Oct 09 9.07 Yr. Kinjal Desai 25 May 18 0.44 Yr. Data below for Reliance Credit Risk Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 9.05% Debt 90.95% Other 0% Debt Sector Allocation
Sector Value Corporate 89.2% Cash Equivalent 8.09% Government 2.71% Credit Quality
Rating Value A 31.27% AA 46.57% AAA 8.25% BBB 7.95% Top Securities Holdings / Portfolio
Name Holding Value Quantity RMZ Buildcon Private Limited
Debentures | -8% ₹796 Cr 10,100 Yes Bank Limited
Debentures | -6% ₹597 Cr 6,500 Vodafone Mobile Services Limited
Debentures | -4% ₹396 Cr 4,000
↑ 2,500 Renew Power Ventures Private Limited
Debentures | -3% ₹331 Cr 3,300 MARIPOSA AGRI VENTURES AND HOSPITALITIES PRIVATE LIMITED
Debentures | -3% ₹311 Cr 3,000
↑ 500 Indiabulls Housing Finance Limited 9.08%
Debentures | -3% ₹293 Cr 3,000
↑ 3,000 Nirma Limited
Debentures | -3% ₹293 Cr 3,000 Renew Wind Energy (Rajasthan One) Private Limited
Debentures | -3% ₹288 Cr 3,060 Net Current Assets
Net Current Assets | -2% ₹253 Cr Reliance Commercial Finance Limited
Debentures | -2% ₹253 Cr 2,530 4. Franklin India Low Duration Fund
CAGR/Annualized return of 9.3% since its launch. Ranked 3 in Low Duration category. Return for 2018 was 8.4% , 2017 was 8.3% and 2016 was 9.7% . Franklin India Low Duration Fund
Growth Launch Date 26 Jul 10 NAV (18 Jan 19) ₹21.322 ↑ 0.00 (0.02 %) Net Assets (Cr) ₹6,528 on 30 Nov 18 Category Debt - Low Duration AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.78 Sharpe Ratio 4.2 Information Ratio 1.6 Alpha Ratio 2.87 Min Investment 10,000 Min SIP Investment 500 Exit Load 0-3 Months (0.5%),3 Months and above(NIL) Yield to Maturity 10.35% Effective Maturity 11 Months 4 Days Modified Duration 9 Months 24 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹11,008 31 Dec 15 ₹12,091 31 Dec 16 ₹13,260 31 Dec 17 ₹14,361 31 Dec 18 ₹15,574 Returns for Franklin India Low Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 1% 3 Month 2.8% 6 Month 4.6% 1 Year 8.7% 3 Year 8.9% 5 Year 9.3% 10 Year 15 Year Since launch 9.3% Historical performance (Yearly) on absolute basis
Year Returns 2017 8.4% 2016 8.3% 2015 9.7% 2014 9.8% 2013 10.1% 2012 9.5% 2011 10.2% 2010 9.9% 2009 2008 Fund Manager information for Franklin India Low Duration Fund
Name Since Tenure Santosh Kamath 15 Apr 14 4.55 Yr. Kunal Agrawal 15 Apr 14 4.55 Yr. Data below for Franklin India Low Duration Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 20.5% Debt 75.98% Other 3.52% Debt Sector Allocation
Sector Value Corporate 83.67% Cash Equivalent 10.63% Government 2.19% Credit Quality
Rating Value A 50.12% AA 25.6% AAA 24.28% Top Securities Holdings / Portfolio
Name Holding Value Quantity Housing Development Finance Corporation Limited
Commercial Paper | -5% ₹316 Cr 6,400 GREENKO CLEAN ENERGY PROJECTS PRIVATE LIMITED
Debentures | -4% ₹302 Cr 30,000 National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹249 Cr 5,000 Small Business Fincredit India Private Limited
Debentures | -4% ₹243 Cr 2,500
↑ 1,800 Call, Cash & Other Assets
Receivables | -4% ₹239 Cr MA Multi-Trade Private Limited
Debentures | -3% ₹225 Cr 2,250 Renew Power Ventures Private Limited
Debentures | -3% ₹217 Cr 2,170 Edelweiss Commodities Services Limited
Debentures | -3% ₹216 Cr 2,200 Wadhawan Global Capital Private Limited
Debentures | -3% ₹204 Cr 1,766 Essel Infraprojects Limited
Debentures | -3% ₹199 Cr 133 5. DHFL Pramerica Credit Risk Fund
CAGR/Annualized return of 8.6% since its launch. Ranked 2 in Credit Risk category. Return for 2018 was 5.1% , 2017 was 7.3% and 2016 was 10% . DHFL Pramerica Credit Risk Fund
Growth Launch Date 29 Sep 14 NAV (18 Jan 19) ₹14.2787 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹987 on 30 Nov 18 Category Debt - Credit Risk AMC DHFL Pramerica Asset Managers Private Limited Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 1.93 Sharpe Ratio 0.64 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 10 Months 24 Days Modified Duration 1 Year 5 Months 1 Day Growth of 10,000 investment over the years.
Date Value 31 Dec 14 ₹10,345 31 Dec 15 ₹11,461 31 Dec 16 ₹12,606 31 Dec 17 ₹13,522 31 Dec 18 ₹14,208 Returns for DHFL Pramerica Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 0.8% 3 Month 2.2% 6 Month 3% 1 Year 5.3% 3 Year 7.4% 5 Year 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2017 5.1% 2016 7.3% 2015 10% 2014 10.8% 2013 2012 2011 2010 2009 2008 Fund Manager information for DHFL Pramerica Credit Risk Fund
Name Since Tenure Kumaresh Ramakrishnan 8 Mar 16 2.65 Yr. Data below for DHFL Pramerica Credit Risk Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 8.73% Debt 85.63% Other 5.65% Debt Sector Allocation
Sector Value Corporate 74.15% Government 12.71% Cash Equivalent 6.24% Securitized 1.26% Credit Quality
Rating Value A 21.11% AA 61.35% AAA 17.54% Top Securities Holdings / Portfolio
Name Holding Value Quantity Emami Agrotech Limited
Debentures | -6% ₹60 Cr 5,640,000 Net Receivables / (Payables)
Receivables | -6% ₹56 Cr Green Infra Wind Energy Limited
Debentures | -5% ₹50 Cr 5,000,000 Punjab and Sind Bank
Debentures | -5% ₹50 Cr 5,000,000 Business Broadcast News Holdings Limited
Debentures | -5% ₹48 Cr 4,900,000 U.P. Power Corporation Limited
Debentures | -4% ₹44 Cr 4,500,000 Hansdeep Industries & Trading Company Limited
Debentures | -4% ₹41 Cr 4,020,000 Vijaya Bank
Debentures | -4% ₹40 Cr 4,000,000 NIRCHEM Cement Limited
Debentures | -4% ₹39 Cr 4,000,000 Steel Authority Of India Limited
Debentures | -4% ₹35 Cr 3,530,000 6. Kotak Credit Risk Fund
CAGR/Annualized return of 8.3% since its launch. Ranked 18 in Credit Risk category. Return for 2018 was 6.2% , 2017 was 6.6% and 2016 was 10.4% . Kotak Credit Risk Fund
Growth Launch Date 11 May 10 NAV (18 Jan 19) ₹20.0237 ↓ 0.00 (-0.02 %) Net Assets (Cr) ₹4,959 on 30 Nov 18 Category Debt - Credit Risk AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 1.8 Sharpe Ratio 1.47 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 10.29% Effective Maturity 2 Years 11 Months 1 Day Modified Duration 1 Year 6 Months 25 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹11,113 31 Dec 15 ₹12,124 31 Dec 16 ₹13,389 31 Dec 17 ₹14,267 31 Dec 18 ₹15,152 Returns for Kotak Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 0.8% 3 Month 2.4% 6 Month 3.4% 1 Year 6.4% 3 Year 7.8% 5 Year 8.6% 10 Year 15 Year Since launch 8.3% Historical performance (Yearly) on absolute basis
Year Returns 2017 6.2% 2016 6.6% 2015 10.4% 2014 9.1% 2013 11.1% 2012 7.3% 2011 9.8% 2010 8.9% 2009 2008 Fund Manager information for Kotak Credit Risk Fund
Name Since Tenure Deepak Agrawal 11 May 10 8.48 Yr. Data below for Kotak Credit Risk Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 11.68% Debt 88.32% Debt Sector Allocation
Sector Value Corporate 77.65% Cash Equivalent 11.68% Government 10.67% Credit Quality
Rating Value A 37.92% AA 49.66% AAA 10.68% BBB 0.71% Top Securities Holdings / Portfolio
Name Holding Value Quantity Karelides Traders Private Limited
Debentures | -5% ₹245 Cr 24,500 JSW Techno Projects Management Limited
Debentures | -4% ₹205 Cr 2,000 Suhani Trading And Investment Consultants Private Limited
Debentures | -4% ₹198 Cr 2,000 Talwandi Sabo Power Limited
Debentures | -4% ₹197 Cr 2,000 Aasan Developers & Constructions Private Limited
Debentures | -4% ₹185 Cr 1,850 Punjab and Sind Bank
Debentures | -3% ₹139 Cr 1,400 Andhra Bank
Debentures | -3% ₹139 Cr 1,380 Piramal Housing Finance Limited
Commercial Paper | -3% ₹136 Cr 2,900 India Infoline Housing Finance Limited
Debentures | -2% ₹120 Cr 1,200 Net Current Assets/(Liabilities)
Net Current Assets | -2% ₹119 Cr
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?
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!
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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