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Fincash » Mutual Funds » Best Debt Lumpsum Investments

6 Best Debt Mutual Funds for Lump sum Investments 2024

Updated on July 10, 2024 , 46254 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 24 - 25

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 (%)2023 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Nippon India Credit Risk Fund Growth ₹32.0922
↑ 0.01
₹1,029 500 23.97.76.57.99%1Y 9M 25D2Y 1M 24D
Kotak Low Duration Fund Growth ₹3,114.07
↑ 0.69
₹9,154 5,000 1.73.66.95.46.78%11M 8D1Y 11M 12D
HDFC Low Duration Fund Growth ₹53.7546
↑ 0.01
₹16,901 5,000 1.83.77.25.677.95%10M 29D2Y 1M 12D
Mahindra Low Duration Bachat Yojana Growth ₹1,525.01
↑ 0.38
₹601 1,000 1.73.66.95.26.77.89%11M 8D1Y 3M 26D
Aditya Birla Sun Life Savings Fund Growth ₹509.143
↑ 0.08
₹13,580 1,000 1.83.87.467.27.88%5M 16D7M 13D
Nippon India Low Duration Fund Growth ₹3,482.65
↑ 0.92
₹5,790 500 1.73.66.95.56.77.88%11M 6D1Y 1M 25D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 12 Jul 24
*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 6.3% since its launch.  Ranked 21 in Credit Risk category.  Return for 2023 was 7.9% , 2022 was 3.9% and 2021 was 13.5% .

Below is the key information for Nippon India Credit Risk Fund

Nippon India Credit Risk Fund
Growth
Launch Date 8 Jun 05
NAV (12 Jul 24) ₹32.0922 ↑ 0.01   (0.03 %)
Net Assets (Cr) ₹1,029 on 31 May 24
Category Debt - Credit Risk
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderate
Expense Ratio 1.64
Sharpe Ratio 1.37
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 9%
Effective Maturity 2 Years 1 Month 24 Days
Modified Duration 1 Year 9 Months 25 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 19₹10,000
30 Jun 20₹9,123
30 Jun 21₹9,943
30 Jun 22₹10,975
30 Jun 23₹11,804
30 Jun 24₹12,699

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 ₹194,235.
Net Profit of ₹14,235
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 12 Jul 24

DurationReturns
1 Month 0.7%
3 Month 2%
6 Month 3.9%
1 Year 7.7%
3 Year 6.5%
5 Year 4.8%
10 Year
15 Year
Since launch 6.3%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2014 11%
Fund Manager information for Nippon India Credit Risk Fund
NameSinceTenure
Kinjal Desai25 May 186.02 Yr.
Sushil Budhia1 Feb 204.33 Yr.

Data below for Nippon India Credit Risk Fund as on 31 May 24

Asset Allocation
Asset ClassValue
Cash7.37%
Debt92.38%
Other0.26%
Debt Sector Allocation
SectorValue
Corporate80.67%
Government11.71%
Cash Equivalent7.37%
Credit Quality
RatingValue
A19.86%
AA48.33%
AAA31.81%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Summit Digitel Infrastructure Limited
Debentures | -
6%₹61 Cr620
JSW Steel Limited
Debentures | -
5%₹50 Cr500
7.1% Govt Stock 2029
Sovereign Bonds | -
5%₹50 Cr5,000,000
7.06% Govt Stock 2028
Sovereign Bonds | -
5%₹50 Cr5,000,000
Indinfravit Trust
Debentures | -
5%₹49 Cr5,000
Prestige Projects Private Limited 11.75%
Debentures | -
4%₹40 Cr4,000
Greenlam Industries Limited
Debentures | -
4%₹40 Cr405
↓ -45
DLF Cyber City Developers Limited 8.4%
Debentures | -
4%₹40 Cr4,000
Shriram Housing Finance Limited 9.25%
Debentures | -
4%₹40 Cr4,000
Lodha Developers Private Limited
Debentures | -
4%₹38 Cr378

2. Kotak Low Duration Fund

The primary objective of the Scheme is to generate income through investment primarily in low duration debt & money market securities. However, there is no assurance that the objective of the scheme will be realized

Kotak Low Duration Fund is a Debt - Low Duration fund was launched on 6 Mar 08. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.2% since its launch.  Ranked 10 in Low Duration category.  Return for 2023 was 6.7% , 2022 was 3.9% and 2021 was 3.5% .

Below is the key information for Kotak Low Duration Fund

Kotak Low Duration Fund
Growth
Launch Date 6 Mar 08
NAV (12 Jul 24) ₹3,114.07 ↑ 0.69   (0.02 %)
Net Assets (Cr) ₹9,154 on 31 May 24
Category Debt - Low Duration
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderate
Expense Ratio 0.88
Sharpe Ratio -1.21
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 8%
Effective Maturity 1 Year 11 Months 12 Days
Modified Duration 11 Months 8 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 19₹10,000
30 Jun 20₹10,941
30 Jun 21₹11,467
30 Jun 22₹11,784
30 Jun 23₹12,547
30 Jun 24₹13,402

Kotak 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 Kotak 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 12 Jul 24

DurationReturns
1 Month 0.6%
3 Month 1.7%
6 Month 3.6%
1 Year 6.9%
3 Year 5.4%
5 Year 6%
10 Year
15 Year
Since launch 7.2%
Historical performance (Yearly) on absolute basis
YearReturns
2023 6.7%
2022 3.9%
2021 3.5%
2020 7.9%
2019 8.3%
2018 7.3%
2017 7.1%
2016 8.9%
2015 9.3%
2014 9.5%
Fund Manager information for Kotak Low Duration Fund
NameSinceTenure
Deepak Agrawal31 Jan 159.34 Yr.
Manu Sharma1 Nov 221.58 Yr.
Palha Khanna3 Jul 230.91 Yr.

Data below for Kotak Low Duration Fund as on 31 May 24

Asset Allocation
Asset ClassValue
Cash15%
Debt84.74%
Other0.26%
Debt Sector Allocation
SectorValue
Corporate62.73%
Government24.81%
Cash Equivalent10.03%
Securitized2.17%
Credit Quality
RatingValue
AA12.34%
AAA87.66%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
8.34% Govt Stock 2033
Sovereign Bonds | -
7%₹677 Cr66,371,138
National Bank For Agriculture And Rural Development
Debentures | -
5%₹424 Cr42,500
07.04 Goi 2029
Sovereign Bonds | -
4%₹401 Cr40,000,000
↑ 40,000,000
SANSAR TRUST JULY 2023
Unlisted bonds | -
3%₹301 Cr90
Embassy Office Parks Reit
Debentures | -
2%₹205 Cr20,500
Bharti Telecom Limited
Debentures | -
2%₹201 Cr20,000
Muthoot Finance Limited
Debentures | -
2%₹199 Cr20,000
Sikka Ports & Terminals Limited
Debentures | -
2%₹196 Cr2,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹179 Cr1,800
Power Finance Corporation Ltd.
Debentures | -
2%₹174 Cr17,500

3. 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 2023 was 7% , 2022 was 4.1% and 2021 was 3.7% .

Below is the key information for HDFC Low Duration Fund

HDFC Low Duration Fund
Growth
Launch Date 18 Nov 99
NAV (12 Jul 24) ₹53.7546 ↑ 0.01   (0.02 %)
Net Assets (Cr) ₹16,901 on 15 May 24
Category Debt - Low Duration
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 1.03
Sharpe Ratio 0.11
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 7.95%
Effective Maturity 2 Years 1 Month 12 Days
Modified Duration 10 Months 29 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 19₹10,000
30 Jun 20₹10,826
30 Jun 21₹11,439
30 Jun 22₹11,777
30 Jun 23₹12,564
30 Jun 24₹13,457

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 12 Jul 24

DurationReturns
1 Month 0.7%
3 Month 1.8%
6 Month 3.7%
1 Year 7.2%
3 Year 5.6%
5 Year 6.1%
10 Year
15 Year
Since launch 7.1%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2014 8.4%
Fund Manager information for HDFC Low Duration Fund
NameSinceTenure
Anupam Joshi27 Oct 158.6 Yr.
Praveen Jain6 Oct 221.65 Yr.
Dhruv Muchhal22 Jun 230.94 Yr.

Data below for HDFC Low Duration Fund as on 15 May 24

Asset Allocation
Asset ClassValue
Cash15.97%
Debt83.34%
Other0.25%
Debt Sector Allocation
SectorValue
Credit Quality
RatingValue
AA12.41%
AAA87.59%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
8.34% Govt Stock 2033
Sovereign Bonds | -
8%₹1,326 Cr130,000,000
Power Finance Corporation Limited
Debentures | -
4%₹597 Cr5,950
Titan Company Limited
Debentures | -
3%₹526 Cr52,500
7.72% Govt Stock 2028
Sovereign Bonds | -
3%₹506 Cr50,500,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹398 Cr4,000
Bharti Telecom Limited
Debentures | -
2%₹335 Cr3,350
SANSAR TRUST JULY 2023 II
Unlisted bonds | -
2%₹329 Cr4,500
Small Industries Development Bank Of India
Debentures | -
2%₹274 Cr2,750
Power Finance Corporation Limited
Debentures | -
2%₹274 Cr2,750
Panatone Finvest Ltd
Debentures | -
2%₹258 Cr5,400

4. Mahindra Low Duration Bachat Yojana

(Erstwhile Mahindra ALP-Samay Bachat Yojana)

The investment objective of the Scheme is to provide reasonable returns, commensurate with a low to moderate level of risk and high degree of liquidity, through a portfolio constituted of money market and debt instruments. However, there is no assurance that the investment objective of the Scheme will be realized and the Scheme does not assure or guarantee any returns.

Mahindra Low Duration Bachat Yojana is a Debt - Low Duration fund was launched on 15 Feb 17. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 5.9% since its launch.  Return for 2023 was 6.7% , 2022 was 3.7% and 2021 was 3.1% .

Below is the key information for Mahindra Low Duration Bachat Yojana

Mahindra Low Duration Bachat Yojana
Growth
Launch Date 15 Feb 17
NAV (12 Jul 24) ₹1,525.01 ↑ 0.38   (0.02 %)
Net Assets (Cr) ₹601 on 31 May 24
Category Debt - Low Duration
AMC Mahindra Asset Management Company Pvt. Ltd.
Rating Not Rated
Risk Moderately Low
Expense Ratio 1.16
Sharpe Ratio -1.39
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 7.89%
Effective Maturity 1 Year 3 Months 26 Days
Modified Duration 11 Months 8 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 19₹10,000
30 Jun 20₹10,775
30 Jun 21₹11,202
30 Jun 22₹11,510
30 Jun 23₹12,198
30 Jun 24₹13,030

Mahindra Low Duration Bachat Yojana 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 Mahindra Low Duration Bachat Yojana

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 12 Jul 24

DurationReturns
1 Month 0.6%
3 Month 1.7%
6 Month 3.6%
1 Year 6.9%
3 Year 5.2%
5 Year 5.4%
10 Year
15 Year
Since launch 5.9%
Historical performance (Yearly) on absolute basis
YearReturns
2023 6.7%
2022 3.7%
2021 3.1%
2020 6.3%
2019 7.9%
2018 6.5%
2017
2016
2015
2014
Fund Manager information for Mahindra Low Duration Bachat Yojana
NameSinceTenure
Rahul Pal15 Feb 177.3 Yr.

Data below for Mahindra Low Duration Bachat Yojana as on 31 May 24

Asset Allocation
Asset ClassValue
Cash30.75%
Debt69.01%
Other0.25%
Debt Sector Allocation
SectorValue
Corporate69.63%
Cash Equivalent15.61%
Government14.52%
Credit Quality
RatingValue
AA34.41%
AAA65.59%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Godrej Industries Limited
Debentures | -
6%₹28 Cr2,850,000
Shriram Finance Limited
Debentures | -
5%₹25 Cr2,500,000
Small Industries Development Bank Of India
Debentures | -
5%₹25 Cr2,500,000
Export Import Bank Of India
Debentures | -
5%₹25 Cr2,500,000
360 One Prime Limited
Debentures | -
5%₹24 Cr2,400,000
Godrej Properties Limited
Debentures | -
5%₹24 Cr2,400,000
8.34% Govt Stock 2033
Sovereign Bonds | -
4%₹20 Cr2,000,000
Bharti Telecom Limited
Debentures | -
4%₹20 Cr2,000,000
↑ 2,000,000
Tata Realty And Infrastructure Limited
Debentures | -
4%₹20 Cr2,000,000
Rec Limited
Debentures | -
4%₹20 Cr2,000,000

5. Aditya Birla Sun Life Savings Fund

The primary objective of the schemes is to generate regular income through investments in debt and money market instruments. Income maybe generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents.

Aditya Birla Sun Life Savings Fund is a Debt - Ultrashort Bond fund was launched on 16 Apr 03. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.4% since its launch.  Ranked 6 in Ultrashort Bond category.  Return for 2023 was 7.2% , 2022 was 4.8% and 2021 was 3.9% .

Below is the key information for Aditya Birla Sun Life Savings Fund

Aditya Birla Sun Life Savings Fund
Growth
Launch Date 16 Apr 03
NAV (12 Jul 24) ₹509.143 ↑ 0.08   (0.02 %)
Net Assets (Cr) ₹13,580 on 31 May 24
Category Debt - Ultrashort Bond
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.52
Sharpe Ratio 1.47
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 7.88%
Effective Maturity 7 Months 13 Days
Modified Duration 5 Months 16 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 19₹10,000
30 Jun 20₹10,829
30 Jun 21₹11,353
30 Jun 22₹11,789
30 Jun 23₹12,562
30 Jun 24₹13,498

Aditya Birla Sun Life Savings 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 Aditya Birla Sun Life Savings Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 12 Jul 24

DurationReturns
1 Month 0.6%
3 Month 1.8%
6 Month 3.8%
1 Year 7.4%
3 Year 6%
5 Year 6.1%
10 Year
15 Year
Since launch 7.4%
Historical performance (Yearly) on absolute basis
YearReturns
2023 7.2%
2022 4.8%
2021 3.9%
2020 7%
2019 8.5%
2018 7.6%
2017 7.2%
2016 9.2%
2015 8.9%
2014 9.7%
Fund Manager information for Aditya Birla Sun Life Savings Fund
NameSinceTenure
Sunaina Cunha20 Jun 149.95 Yr.
Kaustubh Gupta15 Jul 1112.89 Yr.
Monika Gandhi22 Mar 213.19 Yr.
Dhaval Joshi21 Nov 221.53 Yr.

Data below for Aditya Birla Sun Life Savings Fund as on 31 May 24

Asset Allocation
Asset ClassValue
Cash45.07%
Debt54.64%
Other0.29%
Debt Sector Allocation
SectorValue
Corporate61.45%
Cash Equivalent24.26%
Government13.88%
Securitized0.11%
Credit Quality
RatingValue
AA24.72%
AAA75.28%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
HDFC Bank Limited
Debentures | -
4%₹598 Cr6,000
Nirma Limited
Debentures | -
4%₹499 Cr50,000
National Housing Bank 7.78%
Debentures | -
3%₹400 Cr40,000
Tata Realty And Infrastructure Limited
Debentures | -
3%₹360 Cr36,000
Bharti Telecom Limited
Debentures | -
2%₹325 Cr3,250
Bajaj Housing Finance Ltd. 8%
Debentures | -
2%₹300 Cr30,000
Nirma Limited 8.3%
Debentures | -
2%₹250 Cr25,000
Cholamandalam Investment And Finance Company Limited
Debentures | -
2%₹249 Cr2,500
91 DTB 25072024
Sovereign Bonds | -
2%₹248 Cr25,000,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹245 Cr2,500

6. 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 2023 was 6.7% , 2022 was 4.2% and 2021 was 4.1% .

Below is the key information for Nippon India Low Duration Fund

Nippon India Low Duration Fund
Growth
Launch Date 20 Mar 07
NAV (12 Jul 24) ₹3,482.65 ↑ 0.92   (0.03 %)
Net Assets (Cr) ₹5,790 on 31 May 24
Category Debt - Low Duration
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 1.04
Sharpe Ratio -1.24
Information Ratio 0
Alpha Ratio 0
Min Investment 500
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 7.88%
Effective Maturity 1 Year 1 Month 25 Days
Modified Duration 11 Months 6 Days

Growth of 10,000 investment over the years.

DateValue
30 Jun 19₹10,000
30 Jun 20₹10,886
30 Jun 21₹11,463
30 Jun 22₹11,851
30 Jun 23₹12,590
30 Jun 24₹13,454

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 ₹200,132.
Net Profit of ₹20,132
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 12 Jul 24

DurationReturns
1 Month 0.6%
3 Month 1.7%
6 Month 3.6%
1 Year 6.9%
3 Year 5.5%
5 Year 6.1%
10 Year
15 Year
Since launch 7.5%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2014 9%
Fund Manager information for Nippon India Low Duration Fund
NameSinceTenure
Anju Chhajer9 Oct 0914.65 Yr.
Vivek Sharma1 Feb 204.33 Yr.
Kinjal Desai25 May 186.02 Yr.

Data below for Nippon India Low Duration Fund as on 31 May 24

Asset Allocation
Asset ClassValue
Cash33.74%
Debt65.99%
Other0.27%
Debt Sector Allocation
SectorValue
Corporate70.74%
Government19.02%
Cash Equivalent9.97%
Credit Quality
RatingValue
AA12.8%
AAA87.2%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
India (Republic of)
- | -
8%₹453 Cr46,000,000
National Bank For Agriculture And Rural Development
Debentures | -
5%₹284 Cr2,850
NAOMI 05 2024
Unlisted bonds | -
3%₹179 Cr10,000
Highways Infrastructure Trust
Debentures | -
3%₹172 Cr1,750
Canara Bank
Domestic Bonds | -
3%₹166 Cr3,500
India (Republic of)
- | -
3%₹148 Cr15,000,000
Power Finance Corporation Ltd.
Debentures | -
2%₹129 Cr1,300
PNb Housing Finance Limited
Debentures | -
2%₹125 Cr12,500
India Grid TRust
Debentures | -
2%₹124 Cr1,250
Hdb Financial Services Limited
Debentures | -
2%₹124 Cr1,250

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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