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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 Aditya Birla Sun Life Credit Risk Fund Growth ₹14.0879
↑ 0.01 ₹6,177 1,000 1.1 3 6.7 6.8 6.6 13.63% 1Y 8M 8D 2Y 4M 13D Reliance Credit Risk Fund Growth ₹25.6224
↑ 0.02 ₹7,009 500 0.8 -0.7 3.5 5.3 6.1 12.09% 1Y 7M 10D 2Y 1M 13D Franklin India Low Duration Fund Growth ₹22.4178
↑ 0.01 ₹6,296 10,000 1.5 3 8.1 8.1 8.4 11.16% 10M 20D 1Y 1M 24D L&T Credit Risk Fund Growth ₹20.7922
↑ 0.02 ₹2,511 10,000 -1.3 -1.3 2.5 4.9 5.6 10.73% 1Y 6M 18D 2Y 1M 10D UTI Credit Risk Fund Growth ₹15.5547
↑ 0.01 ₹3,526 5,000 -5.4 -7.2 -3.8 2.7 5.5 10.59% 1Y 4M 2D 1Y 7M 28D ICICI Prudential Regular Savings Fund Growth ₹20.8001
↑ 0.01 ₹10,918 10,000 2.1 4.5 9.1 7.3 6.6 10.29% 1Y 5M 1D 1Y 9M 11D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 18 Oct 19
(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 L&T Income Opportunities Fund) The Scheme seeks to generate regular returns and capital appreciation by investing in debt (including securitised debt), government and money market securities. L&T Credit Risk Fund is a Debt - Credit Risk fund was launched on 8 Oct 09. It is a fund with Moderate risk and has given a Below is the key information for L&T Credit Risk Fund Returns up to 1 year are on (Erstwhile UTI Income Opportunities Fund) The investment objective of the scheme is to generate reasonable income and capital appreciation by investing in debt and money market instruments across different maturities and credit ratings. There is no assurance that the investment objective of the scheme will be achieved. UTI Credit Risk Fund is a Debt - Credit Risk fund was launched on 19 Nov 12. It is a fund with Moderate risk and has given a Below is the key information for UTI 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 1. Aditya Birla Sun Life Credit Risk Fund
CAGR/Annualized return of 7.9% 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 Oct 19) ₹14.0879 ↑ 0.01 (0.10 %) Net Assets (Cr) ₹6,177 on 31 Aug 19 Category Debt - Credit Risk AMC Birla Sun Life Asset Management Co Ltd Rating Risk Moderate Expense Ratio 2 Sharpe Ratio 1.27 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 13.63% Effective Maturity 2 Years 4 Months 13 Days Modified Duration 1 Year 8 Months 8 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 15 ₹10,392 30 Sep 16 ₹11,443 30 Sep 17 ₹12,530 30 Sep 18 ₹13,126 30 Sep 19 ₹14,143 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 Oct 19 Duration Returns 1 Month -0.5% 3 Month 1.1% 6 Month 3% 1 Year 6.7% 3 Year 6.8% 5 Year 10 Year 15 Year Since launch 7.9% 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 4.38 Yr. Sunaina Cunha 1 Apr 17 2.42 Yr. Data below for Aditya Birla Sun Life Credit Risk Fund as on 31 Aug 19
Asset Allocation
Asset Class Value Cash 13.36% Equity 0.1% Debt 86.55% Debt Sector Allocation
Sector Value Corporate 69.29% Government 14.13% Cash Equivalent 11.31% Securitized 5.18% Credit Quality
Rating Value A 14.92% AA 28.18% AAA 43.47% B 0.07% BBB 6.38% Below B 1.71% Top Securities Holdings / Portfolio
Name Holding Value Quantity Sprit Textiles Private Limited
Debentures | -6% ₹394 Cr 2,785 Adilink Infra & Multitrading Private Limited
Debentures | -5% ₹314 Cr 2,650 SP Imperial Star Private Limited
Unlisted bonds | -4% ₹244 Cr 185 Net Receivables / (Payables)
Net Current Assets | -4% ₹220 Cr ASIRVAD MICRO FINANCE LIMITED
Debentures | -3% ₹188 Cr 2,500 SPANDANA SPHOORTY FINANCIAL LIMITED
Debentures | -3% ₹174 Cr 3,200 L & T Vadodara Bharuch Tollway Limited
Debentures | -3% ₹169 Cr 170,850 Tata Motors Finance Limited
Debentures | -3% ₹167 Cr 1,330 ADANI PROPERTIES PRIVATE LIMITED
Debentures | -3% ₹166 Cr 150 Clearing Corporation Of India Limited
CBLO | -3% ₹155 Cr 2. Reliance Credit Risk Fund
CAGR/Annualized return of 6.8% 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 Oct 19) ₹25.6224 ↑ 0.02 (0.09 %) Net Assets (Cr) ₹7,009 on 31 Aug 19 Category Debt - Credit Risk AMC Reliance Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderate Expense Ratio 2.13 Sharpe Ratio -0.13 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 12.09% Effective Maturity 2 Years 1 Month 13 Days Modified Duration 1 Year 7 Months 10 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 14 ₹10,000 30 Sep 15 ₹10,986 30 Sep 16 ₹12,077 30 Sep 17 ₹13,046 30 Sep 18 ₹13,672 30 Sep 19 ₹14,182 Returns for Reliance Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Oct 19 Duration Returns 1 Month 0.1% 3 Month 0.8% 6 Month -0.7% 1 Year 3.5% 3 Year 5.3% 5 Year 7.1% 10 Year 15 Year Since launch 6.8% 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 9.98 Yr. Kinjal Desai 25 May 18 1.35 Yr. Data below for Reliance Credit Risk Fund as on 31 Aug 19
Asset Allocation
Asset Class Value Cash 7.44% Debt 92.56% Other 0% Debt Sector Allocation
Sector Value Corporate 94.84% Cash Equivalent 5.16% Credit Quality
Rating Value A 42.35% AA 18.82% AAA 7.35% BBB 20.94% Below B 0.66% Top Securities Holdings / Portfolio
Name Holding Value Quantity RMZ Buildcon Private Limited
Debentures | -11% ₹696 Cr 10,100 Yes Bank Limited
Debentures | -8% ₹533 Cr 6,500 MARIPOSA AGRI VENTURES AND HOSPITALITIES PRIVATE LIMITED
Debentures | -5% ₹340 Cr 3,000 Nirma Limited
Debentures | -4% ₹290 Cr 3,000 Vineha Enterprises Private Limited
Debentures | -4% ₹272 Cr 22,500 Renew Wind Energy (Rajasthan One) Private Limited
Debentures | -4% ₹271 Cr 3,060 Indiabulls Housing Finance Limited
Debentures | -4% ₹267 Cr 2,960 Sugee Builders Private Limited
Debentures | -3% ₹225 Cr 201 Aqua Space Developers Pvt. Ltd.
Debentures | -3% ₹214 Cr 2,150 Piramal Enterprises Limited
Debentures | -3% ₹205 Cr 2,096
↑ 96 3. Franklin India Low Duration Fund
CAGR/Annualized return of 9.1% 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 Oct 19) ₹22.4178 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹6,296 on 31 Aug 19 Category Debt - Low Duration AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.78 Sharpe Ratio 3.71 Information Ratio 0.86 Alpha Ratio 0.6 Min Investment 10,000 Min SIP Investment 500 Exit Load 0-3 Months (0.5%),3 Months and above(NIL) Yield to Maturity 11.16% Effective Maturity 1 Year 1 Month 24 Days Modified Duration 10 Months 20 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 14 ₹10,000 30 Sep 15 ₹11,018 30 Sep 16 ₹12,068 30 Sep 17 ₹13,175 30 Sep 18 ₹14,098 30 Sep 19 ₹15,342 Returns for Franklin India Low Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Oct 19 Duration Returns 1 Month -0.1% 3 Month 1.5% 6 Month 3% 1 Year 8.1% 3 Year 8.1% 5 Year 8.8% 10 Year 15 Year Since launch 9.1% Historical performance (Yearly) on absolute basis
Year Returns 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 2009 Fund Manager information for Franklin India Low Duration Fund
Name Since Tenure Santosh Kamath 15 Apr 14 5.38 Yr. Kunal Agrawal 15 Apr 14 5.38 Yr. Data below for Franklin India Low Duration Fund as on 31 Aug 19
Asset Allocation
Asset Class Value Cash 26.41% Debt 76.02% Debt Sector Allocation
Sector Value Corporate 82.5% Cash Equivalent 14.06% Government 1.44% Credit Quality
Rating Value A 41.62% AA 28.51% AAA 24.14% BBB 4.43% Below B 1.3% Top Securities Holdings / Portfolio
Name Holding Value Quantity Greenko Clean Energy Projects Private Limited
Debentures | -5% ₹300 Cr 30,000 Small Business Fincredit India Private Limited
Debentures | -4% ₹246 Cr 2,500 DOLVI Minerals & Metals Private Limited
Debentures | -4% ₹228 Cr 1,260 Renew Power Ventures Private Limited
Debentures | -4% ₹217 Cr 2,170 PIRAMAL CAPITAL & HOUSING FINANCE LIMITED
Debentures | -3% ₹200 Cr 2,500 ESS KAY FINCORP LIMITED
Debentures | -3% ₹196 Cr 2,000 Tata Projects Limited
Commercial Paper | -3% ₹189 Cr 4,000 Vodafone Mobile Services Limited
Debentures | -3% ₹183 Cr 1,970 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -3% ₹171 Cr 3,500 Essel Infraprojects Limited
Debentures | -3% ₹162 Cr 110
↓ -23 4. L&T Credit Risk Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 12 in Credit Risk category. Return for 2018 was 5.6% , 2017 was 7.2% and 2016 was 10.1% . L&T Credit Risk Fund
Growth Launch Date 8 Oct 09 NAV (18 Oct 19) ₹20.7922 ↑ 0.02 (0.08 %) Net Assets (Cr) ₹2,511 on 31 Aug 19 Category Debt - Credit Risk AMC L&T Investment Management Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 1.93 Sharpe Ratio 0.44 Information Ratio -1 Alpha Ratio -7.35 Min Investment 10,000 Min SIP Investment 1,000 Exit Load 0-1 Years (1%),1 Years and above(NIL) Yield to Maturity 10.73% Effective Maturity 2 Years 1 Month 10 Days Modified Duration 1 Year 6 Months 18 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 14 ₹10,000 30 Sep 15 ₹11,070 30 Sep 16 ₹12,189 30 Sep 17 ₹13,191 30 Sep 18 ₹13,748 30 Sep 19 ₹14,142 Returns for L&T Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Oct 19 Duration Returns 1 Month 0.7% 3 Month -1.3% 6 Month -1.3% 1 Year 2.5% 3 Year 4.9% 5 Year 7% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 5.6% 2017 7.2% 2016 10.1% 2015 9.4% 2014 11.4% 2013 5.8% 2012 9.5% 2011 9.7% 2010 5.8% 2009 Fund Manager information for L&T Credit Risk Fund
Name Since Tenure Shriram Ramanathan 24 Nov 12 6.85 Yr. Vikas Garg 3 Apr 17 2.49 Yr. Data below for L&T Credit Risk Fund as on 31 Aug 19
Asset Allocation
Asset Class Value Cash 8.56% Debt 88.73% Other 2.71% Debt Sector Allocation
Sector Value Corporate 79.78% Government 12.2% Cash Equivalent 5.31% Credit Quality
Rating Value A 32.95% AA 38.21% AAA 27.03% Top Securities Holdings / Portfolio
Name Holding Value Quantity Green Infra Wind Energy Limited
Debentures | -7% ₹149 Cr 1,500 Samasta Microfinance Limited
Debentures | -7% ₹149 Cr 1,500 Renew Power Ventures Private Limited
Debentures | -5% ₹118 Cr 1,210 Bharat Aluminium Company Limited
Debentures | -5% ₹114 Cr 1,150 Syndicate Bank
Debentures | -5% ₹101 Cr 987 Vizag General Cargo Berth Private Limited
Debentures | -4% ₹98 Cr 1,000 Tata Power Renewable Energy Limited
Debentures | -4% ₹98 Cr 1,000
↓ -250 Jhajjar Power Limited
Debentures | -4% ₹90 Cr 90 (A) Tri Party Repo Dealing System (Treps)/Reverse Repo
CBLO/Reverse Repo | -4% ₹89 Cr NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Debentures | -4% ₹84 Cr 800 5. UTI Credit Risk Fund
CAGR/Annualized return of 6.6% since its launch. Ranked 20 in Credit Risk category. Return for 2018 was 5.5% , 2017 was 6.9% and 2016 was 10.3% . UTI Credit Risk Fund
Growth Launch Date 19 Nov 12 NAV (18 Oct 19) ₹15.5547 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹3,526 on 31 Aug 19 Category Debt - Credit Risk AMC UTI Asset Management Company Ltd Rating ☆☆ Risk Moderate Expense Ratio 1.73 Sharpe Ratio -0.42 Information Ratio -1.09 Alpha Ratio -9.67 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-12 Months (1%),12 Months and above(NIL) Yield to Maturity 10.59% Effective Maturity 1 Year 7 Months 28 Days Modified Duration 1 Year 4 Months 2 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 14 ₹10,000 30 Sep 15 ₹11,037 30 Sep 16 ₹12,115 30 Sep 17 ₹13,106 30 Sep 18 ₹13,682 30 Sep 19 ₹13,201 Returns for UTI Credit Risk Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Oct 19 Duration Returns 1 Month 0.2% 3 Month -5.4% 6 Month -7.2% 1 Year -3.8% 3 Year 2.7% 5 Year 5.6% 10 Year 15 Year Since launch 6.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 5.5% 2017 6.9% 2016 10.3% 2015 8.9% 2014 11.5% 2013 7.7% 2012 2011 2010 2009 Fund Manager information for UTI Credit Risk Fund
Name Since Tenure Ritesh Nambiar 9 Nov 12 6.81 Yr. Data below for UTI Credit Risk Fund as on 31 Aug 19
Asset Allocation
Asset Class Value Cash 30.85% Debt 69.15% Debt Sector Allocation
Sector Value Corporate 71.6% Cash Equivalent 15.85% Government 9.86% Securitized 2.69% Credit Quality
Rating Value Below B 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -15% ₹403 Cr 00 Edelweiss Commodities Services Limited
Debentures | -7% ₹197 Cr 2,000 Green Infra Wind Energy Limited
Debentures | -7% ₹179 Cr 1,800
↓ -1,000 Vodafone Mobile Services Limited
Debentures | -5% ₹140 Cr 1,500 DMI FINANCE PRIVATE LIMITED
Debentures | -4% ₹100 Cr 1,000 RELIANCE INDUSTRIES LIMITED
Commercial Paper | -4% ₹98 Cr 1,000,000,000
↑ 1,000,000,000 Indostar Capital Finance Limited
Debentures | -4% ₹97 Cr 100 Essar Oil Limited
Debentures | -4% ₹95 Cr 95 ICICI BANK LIMITED
Certificate of Deposit | -3% ₹94 Cr 1,000,000,000
↑ 1,000,000,000 Idea Cellular Limited
Debentures | -3% ₹77 Cr 950 6. 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 (18 Oct 19) ₹20.8001 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹10,918 on 31 Aug 19 Category Debt - Credit Risk AMC ICICI Prudential Asset Management Company Limited Rating ☆ Risk Moderate Expense Ratio 1.83 Sharpe Ratio 3.3 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 10.29% Effective Maturity 1 Year 9 Months 11 Days Modified Duration 1 Year 5 Months 1 Day Growth of 10,000 investment over the years.
Date Value 30 Sep 14 ₹10,000 30 Sep 15 ₹11,054 30 Sep 16 ₹12,055 30 Sep 17 ₹13,029 30 Sep 18 ₹13,688 30 Sep 19 ₹14,924 Returns for ICICI Prudential Regular Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Oct 19 Duration Returns 1 Month 0.7% 3 Month 2.1% 6 Month 4.5% 1 Year 9.1% 3 Year 7.3% 5 Year 8.3% 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 2.39 Yr. Akhil Kakkar 3 Jun 17 1.82 Yr. Data below for ICICI Prudential Regular Savings Fund as on 31 Aug 19
Asset Allocation
Asset Class Value Cash 6.39% Equity 0.87% Debt 92.74% Debt Sector Allocation
Sector Value Corporate 91.23% Cash Equivalent 6.39% Government 1.15% Securitized 0.36% Credit Quality
Rating Value A 31.56% AA 48.93% AAA 12.2% BBB 3.44% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Limited
Debentures | -6% ₹604 Cr 6,000 Nuvoco Vistas Corporation Ltd.
Debentures | -3% ₹350 Cr 3,500
↑ 3,500 Welspun Renewables Energy Private Limited
Debentures | -3% ₹327 Cr 3,350 PIPELINE INFRASTRUCTURE PRIVATE LIMITED
Debentures | -3% ₹306 Cr 3,039 Aqua Space Developers Pvt. Ltd.
Debentures | -3% ₹300 Cr 3,000 Treps
CBLO/Reverse Repo | -3% ₹291 Cr Muthoot Finance Limited
Debentures | -3% ₹281 Cr 2,870,000 Jay Properties Private Limited
Debentures | -2% ₹267 Cr 2,485 Prestige Estates Projects Limited
Debentures | -2% ₹247 Cr 2,500 Net Current Assets
Net Current Assets | -2% ₹220 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
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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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