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Top 4 Best Floating Rate Funds to Invest in 2019
Floating Rate Funds are a type of Debt fund that mainly invests in floating rate instruments. Here the interest paid changes in order with the changing interest rate scenario in the debt market. As per Security and Exchange Board of India (SBEI) norms, Floater Fund should invest a minimum of 65 percent of its total assets in the floating rate instrument. One of the biggest advantages of this fund is its lowest degree of sensitivity to changes in interest rates. So, let’s look at some of the best performing floater funds to invest in 2019.
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What are Floating Rate Funds?
The floating rate instrument is considered to be an attractive instrument for investors with a conservative portion. This fund invests a major portion of its corpus in floating rate instruments and rest in fixed income securities. These funds are least risky in terms of interest rate. Unlike other debt funds, floating rate funds do not react to the changing interest rates. When the Government of India issues bond in the market, they have a fixed coupon rate, whereas, floating rate securities have variable interest rates. These floating rate interest increases or decreases based on the reference rate. To benefit the most, one should invest in these funds when interest rates are expected to rise.
But, being a debt fund, the credit risk in the fund still remains. Credit risk arises when a company that has issued the debt instruments does not make regular payments. In such cases, it has a major impact on the fund, depending on how much portion the fund has in the portfolio. Hence, it is suggested to be in debt instruments with a rating higher credit rating.
There are two kinds of floating rate funds— short-term and long-term. The portfolio of short-term floating funds is normally skewed towards short-term maturities and the portfolio of the long-term plan is skewed towards longer-term maturities.
Best Floating Rate Funds 2019
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2018 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Floating Rate Fund - Long Term Growth ₹230.347
↑ 0.04 ₹4,579 2.1 4.6 7.9 7.9 7.5 8.01% 7M 17D 8M 8D ICICI Prudential Floating Interest Fund Growth ₹279.006
↑ 0.03 ₹6,863 1.9 4.1 6.8 7.3 6.6 9.37% 6M 11D 8M 5D DHFL Pramerica Floating Rate Fund Growth ₹20.5802
↑ 0.00 ₹42 1.7 3.9 6.8 7.1 6.8 8.7% 1Y 3M 11D 1Y 5M 1D Reliance Floating Rate Fund Growth ₹29.3029
↑ 0.00 ₹5,761 2.3 4.9 6.6 7 5.8 8.76% 1Y 3M 25D 1Y 6M 11D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 16 Apr 19
The primary objective of the schemes is to generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments. The schemes may invest a portion of its net assets in fixed rate debt securities and money market instruments. Aditya Birla Sun Life Floating Rate Fund - Long Term is a Debt - Floating Rate fund was launched on 25 Mar 09. It is a fund with Moderately Low risk and has given a Below is the key information for Aditya Birla Sun Life Floating Rate Fund - Long Term Returns up to 1 year are on (Erstwhile ICICI Prudential Savings Fund) The scheme aims to generate income consistent with the prudent risk from a portfolio comprising floating rate debt instruments, fixed rate debt instruments swapped for floating rate return, and also fixed rate instruments & money market instruments. ICICI Prudential Floating Interest Fund is a Debt - Floating Rate fund was launched on 18 Nov 05. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Floating Interest Fund Returns up to 1 year are on (Erstwhile DHFL Pramerica Short Term Floating Rate Fund) The objective of the scheme is to generate regular income through investment in a portfolio comprising primarily in short maturity floating rate debt/money market 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. DHFL Pramerica Floating Rate Fund is a Debt - Floating Rate fund was launched on 26 Mar 10. It is a fund with Moderately Low risk and has given a Below is the key information for DHFL Pramerica Floating Rate Fund Returns up to 1 year are on (Erstwhile Reliance Floating Rate Fund - Short Term Plan) The primary objective of the scheme is to generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitized debt, Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns). The scheme shall also invest in Fixed rate Debt Securities (including fixed rate Securitized Debt, Money Market Instruments and Floating Rate Debt Instruments swapped for fixed returns). Reliance Floating Rate Fund is a Debt - Floating Rate fund was launched on 27 Aug 04. It is a fund with Moderately Low risk and has given a Below is the key information for Reliance Floating Rate Fund Returns up to 1 year are on 1. Aditya Birla Sun Life Floating Rate Fund - Long Term
CAGR/Annualized return of 8.6% since its launch. Ranked 14 in Floating Rate category. Return for 2018 was 7.5% , 2017 was 6.9% and 2016 was 9.5% . Aditya Birla Sun Life Floating Rate Fund - Long Term
Growth Launch Date 25 Mar 09 NAV (16 Apr 19) ₹230.347 ↑ 0.04 (0.02 %) Net Assets (Cr) ₹4,579 on 28 Feb 19 Category Debt - Floating Rate AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.38 Sharpe Ratio 5.9 Information Ratio 1.01 Alpha Ratio -4.66 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 8.01% Effective Maturity 8 Months 8 Days Modified Duration 7 Months 17 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 14 ₹10,000 31 Mar 15 ₹10,935 31 Mar 16 ₹11,879 31 Mar 17 ₹12,974 31 Mar 18 ₹13,876 31 Mar 19 ₹14,986 Returns for Aditya Birla Sun Life Floating Rate Fund - Long Term
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Apr 19 Duration Returns 1 Month 0.8% 3 Month 2.1% 6 Month 4.6% 1 Year 7.9% 3 Year 7.9% 5 Year 8.4% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.5% 2017 6.9% 2016 9.5% 2015 8.9% 2014 9.6% 2013 9.6% 2012 10.1% 2011 9.4% 2010 6.5% 2009 Fund Manager information for Aditya Birla Sun Life Floating Rate Fund - Long Term
Name Since Tenure Kaustubh Gupta 15 Jul 11 7.55 Yr. Data below for Aditya Birla Sun Life Floating Rate Fund - Long Term as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 32.87% Debt 67.13% Debt Sector Allocation
Sector Value Corporate 51.73% Cash Equivalent 27.92% Government 17.45% Securitized 2.89% Credit Quality
Rating Value AA 6.71% AAA 93.29% Top Securities Holdings / Portfolio
Name Holding Value Quantity Power Finance Corporation Ltd.
Debentures | -7% ₹427 Cr 4,230 Shriram Transport Finance Company Limited
Debentures | -4% ₹235 Cr 2,350
↑ 2,350 Small Industries Development Bank Of India
Debentures | -4% ₹216 Cr 2,160
↑ 2,160 REC LIMITED
Debentures | -3% ₹197 Cr 1,960
↑ 1,960 Kotak Mahindra Bank Limited
Certificate of Deposit | -3% ₹196 Cr 20,000 NRSS XXIX TRANSMISSION LIMITED
Debentures | -3% ₹150 Cr 1,500 Export-Import Bank Of India
Certificate of Deposit | -2% ₹140 Cr 15,000
↑ 15,000 Rural Electrification Corporation Limited
Debentures | -2% ₹126 Cr 1,250
↑ 500 L&T FINANCE LIMITED
Commercial Paper | -2% ₹118 Cr 2,500 National Bank For Agriculture And Rural Development
Debentures | -2% ₹118 Cr 1,160
↑ 1,160 2. ICICI Prudential Floating Interest Fund
CAGR/Annualized return of 8% since its launch. Ranked 35 in Floating Rate category. Return for 2018 was 6.6% , 2017 was 6.8% and 2016 was 8.9% . ICICI Prudential Floating Interest Fund
Growth Launch Date 18 Nov 05 NAV (16 Apr 19) ₹279.006 ↑ 0.03 (0.01 %) Net Assets (Cr) ₹6,863 on 28 Feb 19 Category Debt - Floating Rate AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 1.33 Sharpe Ratio 3.94 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 9.37% Effective Maturity 8 Months 5 Days Modified Duration 6 Months 11 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 14 ₹10,000 31 Mar 15 ₹10,911 31 Mar 16 ₹11,792 31 Mar 17 ₹12,836 31 Mar 18 ₹13,661 31 Mar 19 ₹14,596 Returns for ICICI Prudential Floating Interest Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Apr 19 Duration Returns 1 Month 0.8% 3 Month 1.9% 6 Month 4.1% 1 Year 6.8% 3 Year 7.3% 5 Year 7.9% 10 Year 15 Year Since launch 8% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.6% 2017 6.8% 2016 8.9% 2015 8.1% 2014 9.2% 2013 9.2% 2012 9.7% 2011 9.1% 2010 5.6% 2009 5.5% Fund Manager information for ICICI Prudential Floating Interest Fund
Name Since Tenure Rahul Goswami 27 Sep 12 6.51 Yr. Nikhil Kabra 3 Aug 16 2.66 Yr. Data below for ICICI Prudential Floating Interest Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 17.03% Debt 82.97% Debt Sector Allocation
Sector Value Corporate 75.7% Cash Equivalent 17.03% Securitized 4.83% Government 2.44% Credit Quality
Rating Value A 3.59% AA 72.76% AAA 23.65% Top Securities Holdings / Portfolio
Name Holding Value Quantity Bahadur Chand Investments Private Limited
Debentures | -11% ₹652 Cr 650 PIRAMAL CAPITAL & HOUSING FINANCE LIMITED
Commercial Paper | -6% ₹367 Cr 7,600
↑ 7,600 Indiabulls Housing Finance Limited
Debentures | -6% ₹349 Cr 3,500 Net Current Assets
Net Current Assets | -6% ₹347 Cr Bharti Airtel Limited
Debentures | -6% ₹346 Cr 3,500 Vedanta Limited
Debentures | -4% ₹246 Cr 2,500 JSW Steel Limited
Debentures | -4% ₹231 Cr 2,290 United Spirits Limited
Debentures | -3% ₹177 Cr 1,800 SANSAR TRUST NOV 2018
Unlisted bonds | -3% ₹166 Cr 1,370 Zydus Wellness Ltd.
Debentures | -3% ₹155 Cr 1,550
↑ 450 3. DHFL Pramerica Floating Rate Fund
CAGR/Annualized return of 7.9% since its launch. Ranked 42 in Floating Rate category. Return for 2018 was 6.8% , 2017 was 6.8% and 2016 was 8.3% . DHFL Pramerica Floating Rate Fund
Growth Launch Date 26 Mar 10 NAV (16 Apr 19) ₹20.5802 ↑ 0.00 (0.02 %) Net Assets (Cr) ₹42 on 28 Feb 19 Category Debt - Floating Rate AMC DHFL Pramerica Asset Managers Private Limited Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.51 Sharpe Ratio 4.86 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 8.7% Effective Maturity 1 Year 5 Months 1 Day Modified Duration 1 Year 3 Months 11 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 14 ₹10,000 31 Mar 15 ₹10,895 31 Mar 16 ₹11,786 31 Mar 17 ₹12,734 31 Mar 18 ₹13,577 31 Mar 19 ₹14,518 Returns for DHFL Pramerica Floating Rate Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Apr 19 Duration Returns 1 Month 0.6% 3 Month 1.7% 6 Month 3.9% 1 Year 6.8% 3 Year 7.1% 5 Year 7.7% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.8% 2017 6.8% 2016 8.3% 2015 8.2% 2014 9.2% 2013 8.6% 2012 9.9% 2011 8.3% 2010 2009 Fund Manager information for DHFL Pramerica Floating Rate Fund
Name Since Tenure Puneet Pal 13 Dec 17 1.14 Yr. Rakesh Suri 5 Jan 17 2.07 Yr. Data below for DHFL Pramerica Floating Rate Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 3.59% Debt 96.41% Debt Sector Allocation
Sector Value Government 57.48% Corporate 38.93% Cash Equivalent 3.59% Credit Quality
Rating Value AA 30.33% AAA 69.67% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.80% GOI Floating Rate Bonds 2020
Sovereign Bonds | -48% ₹20 Cr 2,000,000
↓ -500,000 Dewan Housing Finance Corporation Limited
Debentures | -29% ₹12 Cr 1,228,670 Rural Electrification Corporation Limited
Debentures | -10% ₹4 Cr 400,000
↑ 400,000 Power Finance Corporation Ltd.
Debentures | -9% ₹4 Cr 380,000
↑ 380,000 Net Receivables / (Payables)
Net Current Assets | -3% ₹1 Cr Clearing Corporation Of India Ltd.
CBLO | -0% ₹0 Cr 4. Reliance Floating Rate Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 32 in Floating Rate category. Return for 2018 was 5.8% , 2017 was 5.9% and 2016 was 9% . Reliance Floating Rate Fund
Growth Launch Date 27 Aug 04 NAV (16 Apr 19) ₹29.3029 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹5,761 on 28 Feb 19 Category Debt - Floating Rate AMC Reliance Nippon Life Asset Management Ltd. Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.62 Sharpe Ratio 1.87 Information Ratio -1.05 Alpha Ratio -1.07 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-1 Months (0.5%),1 Months and above(NIL) Yield to Maturity 8.76% Effective Maturity 1 Year 6 Months 11 Days Modified Duration 1 Year 3 Months 25 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 14 ₹10,000 31 Mar 15 ₹11,002 31 Mar 16 ₹11,886 31 Mar 17 ₹12,871 31 Mar 18 ₹13,689 31 Mar 19 ₹14,604 Returns for Reliance Floating Rate Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Apr 19 Duration Returns 1 Month 0.7% 3 Month 2.3% 6 Month 4.9% 1 Year 6.6% 3 Year 7% 5 Year 7.9% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 5.8% 2017 5.9% 2016 9% 2015 8.6% 2014 9.8% 2013 7.9% 2012 9.7% 2011 9.2% 2010 5.4% 2009 5.9% Fund Manager information for Reliance Floating Rate Fund
Name Since Tenure Amit Tripathi 7 Oct 07 11.33 Yr. Vivek Sharma 1 Oct 13 5.34 Yr. Kinjal Desai 25 May 18 0.69 Yr. Data below for Reliance Floating Rate Fund as on 28 Feb 19
Asset Allocation
Asset Class Value Cash 9.77% Debt 90.23% Other 0% Debt Sector Allocation
Sector Value Corporate 64.26% Government 22.49% Cash Equivalent 9.77% Securitized 3.49% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Tata Sons Limited
Debentures | -7% ₹423 Cr 4,250 Reliance Industries Limited
Debentures | -7% ₹401 Cr 4,050
↑ 150 Mahindra & Mahindra Financial Services Ltd
Debentures | -5% ₹302 Cr 3,000 Indiabulls Housing Finance Limited
Debentures | -5% ₹297 Cr 3,000 Power Finance Corporation Ltd.
Debentures | -4% ₹273 Cr 2,750 LIC Housing Finance Limited
Debentures | -4% ₹252 Cr 2,500 India Grid Trust
Unlisted bonds | -4% ₹250 Cr 2,500 Net Current Assets
Net Current Assets | -4% ₹235 Cr Reliance Jio Infocomm Limited
Debentures | -4% ₹224 Cr 2,246 National Bank For Agriculture And Rural Development
Debentures | -4% ₹215 Cr 2,114
Advantages of Floating Rate Funds
Some of the benefits of Floating Rate Funds are:
- Price Stability- As floating rate funds are tied to current rates; the price of the underlying securities doesn’t fluctuate in response to changes in the interest rates.
- Better Yield- Floating funds tend to offer better yields than those of Certificate of Deposits (CDs). This can be a better idea for those who want to earn returns in a short duration.
- Moderate Risk- Debt funds are anytime less risky than Equity Funds. When it comes to floater funds these are less risky than other debt funds, as they don’t carry interest rate risk. However, diversification of the portfolio significantly reduces the risk of the portfolio.
How to Select Best Floating Rate Funds?
Some of the ideal ways to choose best floating rate funds are:
- Look at the past performances of the fund, typically of past 1-3 years. The fund with the most stable and consistent performance is the one to go with
- Ideally, one should go with the fund that has an Asset Under Management (AUM) > INR 100 Cr
- Invest in funds that invests in high credit-rating companies
How to Invest in Floating Rate Funds 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!
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