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Top 4 Best Floating Rate Funds to Invest in 2020 - Fincash

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Top 4 Best Floating Rate Funds to Invest in 2020

Updated on January 23, 2020 , 1979 views

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 2020.

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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 2020

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2018 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Aditya Birla Sun Life Floating Rate Fund - Long Term Growth ₹245.394
↑ 0.08
₹8,7151.848.67.68.66.23%11M 1D1Y 29D
Nippon India Floating Rate Fund Growth ₹31.2423
↑ 0.01
₹6,3081.948.86.996.82%8M 5D8M 26D
ICICI Prudential Floating Interest Fund Growth ₹297.342
↑ 0.14
₹8,00524.28.57.28.47.87%1Y 22D1Y 3M 22D
PGIM India Floating Rate Fund Growth ₹10.8156
↑ 0.00
₹13-47.2-46.2-44.4-14 15.04%1M 6D1M 13D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Jan 20

1. Aditya Birla Sun Life Floating Rate Fund - Long Term

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 CAGR/Annualized return of 8.6% since its launch.  Ranked 14 in Floating Rate category.  Return for 2019 was 8.6% , 2018 was 7.5% and 2017 was 6.9% .

Below is the key information for Aditya Birla Sun Life Floating Rate Fund - Long Term

Aditya Birla Sun Life Floating Rate Fund - Long Term
Growth
Launch Date 25 Mar 09
NAV (24 Jan 20) ₹245.394 ↑ 0.08   (0.03 %)
Net Assets (Cr) ₹8,715 on 31 Dec 19
Category Debt - Floating Rate
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.39
Sharpe Ratio 5.7
Information Ratio 0.9
Alpha Ratio -1.6
Min Investment 1,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 6.23%
Effective Maturity 1 Year 29 Days
Modified Duration 11 Months 1 Day

Growth of 10,000 investment over the years.

DateValue

Aditya Birla Sun Life Floating Rate Fund - Long Term SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹206,148.
Net Profit of ₹26,148
Invest Now

Returns for Aditya Birla Sun Life Floating Rate Fund - Long Term

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month 0.7%
3 Month 1.8%
6 Month 4%
1 Year 8.6%
3 Year 7.6%
5 Year 8.3%
10 Year
15 Year
Since launch 8.6%
Historical performance (Yearly) on absolute basis
YearReturns
2018 8.6%
2017 7.5%
2016 6.9%
2015 9.5%
2014 8.9%
2013 9.6%
2012 9.6%
2011 10.1%
2010 9.4%
2009 6.5%
Fund Manager information for Aditya Birla Sun Life Floating Rate Fund - Long Term
NameSinceTenure
Kaustubh Gupta15 Jul 118.3 Yr.

Data below for Aditya Birla Sun Life Floating Rate Fund - Long Term as on 31 Dec 19

Asset Allocation
Asset ClassValue
Cash37.97%
Debt62.03%
Debt Sector Allocation
SectorValue
Corporate46.55%
Government34.07%
Cash Equivalent18.64%
Securitized0.74%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Clearing Corporation Of India Limited
CBLO | -
14%₹1,272 Cr
7.80% GOI Floating Rate Bonds 2020
Sovereign Bonds | -
3%₹314 Cr31,500,000
↑ 31,500,000
REC LIMITED
Debentures | -
3%₹277 Cr2,710
↑ 750
AXIS BANK LIMITED
Certificate of Deposit | -
3%₹250 Cr25,000
↑ 25,000
Net Receivables / (Payables)
Net Current Assets | -
2%-₹200 Cr
BAJAJ FINANCE LIMITED
Commercial Paper | -
2%₹193 Cr4,000
↑ 4,000
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Debentures | -
2%₹179 Cr1,700
LIC HOUSING FINANCE LIMITED
Debentures | -
2%₹179 Cr1,750
↑ 1,250
GOVT STOCK
Sovereign Bonds | -
2%₹177 Cr17,500,000
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Certificate of Deposit | -
2%₹171 Cr17,500

2. Nippon India Floating Rate Fund

(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).

Nippon India 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 CAGR/Annualized return of 7.7% since its launch.  Ranked 32 in Floating Rate category.  Return for 2019 was 9% , 2018 was 5.8% and 2017 was 5.9% .

Below is the key information for Nippon India Floating Rate Fund

Nippon India Floating Rate Fund
Growth
Launch Date 27 Aug 04
NAV (24 Jan 20) ₹31.2423 ↑ 0.01   (0.05 %)
Net Assets (Cr) ₹6,308 on 31 Dec 19
Category Debt - Floating Rate
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 0.6
Sharpe Ratio 5.04
Information Ratio -1.01
Alpha Ratio 1.2
Min Investment 5,000
Min SIP Investment 100
Exit Load 0-1 Months (0.5%),1 Months and above(NIL)
Yield to Maturity 6.82%
Effective Maturity 8 Months 26 Days
Modified Duration 8 Months 5 Days

Growth of 10,000 investment over the years.

DateValue
31 Dec 14₹10,000
31 Dec 15₹10,863
31 Dec 16₹11,845
31 Dec 17₹12,549
31 Dec 18₹13,282
31 Dec 19₹14,480

Nippon India Floating Rate Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125
Invest Now

Returns for Nippon India Floating Rate Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month 0.6%
3 Month 1.9%
6 Month 4%
1 Year 8.8%
3 Year 6.9%
5 Year 7.6%
10 Year
15 Year
Since launch 7.7%
Historical performance (Yearly) on absolute basis
YearReturns
2018 9%
2017 5.8%
2016 5.9%
2015 9%
2014 8.6%
2013 9.8%
2012 7.9%
2011 9.7%
2010 9.2%
2009 5.4%
Fund Manager information for Nippon India Floating Rate Fund
NameSinceTenure
Amit Tripathi7 Oct 0712.16 Yr.
Vivek Sharma1 Oct 136.17 Yr.
Kinjal Desai25 May 181.52 Yr.

Data below for Nippon India Floating Rate Fund as on 31 Dec 19

Asset Allocation
Asset ClassValue
Cash21.57%
Debt78.42%
Other0%
Debt Sector Allocation
SectorValue
Corporate63.47%
Cash Equivalent16.71%
Government16.02%
Securitized3.81%
Credit Quality
RatingValue
AA4.2%
AAA95.8%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Citibank N.A.
Certificate of Deposit | -
7%₹425 Cr
Tata Sons Limited
Debentures | -
6%₹377 Cr3,750
Nabha Power Limited
Debentures | -
6%₹352 Cr3,500
Net Current Assets
Net Current Assets | -
6%₹333 Cr
Mahindra & Mahindra Financial Services Ltd
Debentures | -
5%₹303 Cr3,000
Reliance Ports And Terminals Limited
Debentures | -
5%₹280 Cr2,689
India Grid Trust
Unlisted bonds | -
4%₹252 Cr2,500
Rural Electrification Corporation Limited
Debentures | -
4%₹234 Cr2,301
↑ 400
LIC Housing Finance Limited
Debentures | -
4%₹234 Cr2,290
HDB Financial Services Limited
Debentures | -
4%₹232 Cr2,350

3. ICICI Prudential Floating Interest Fund

(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 CAGR/Annualized return of 8% since its launch.  Ranked 35 in Floating Rate category.  Return for 2019 was 8.4% , 2018 was 6.6% and 2017 was 6.8% .

Below is the key information for ICICI Prudential Floating Interest Fund

ICICI Prudential Floating Interest Fund
Growth
Launch Date 18 Nov 05
NAV (24 Jan 20) ₹297.342 ↑ 0.14   (0.05 %)
Net Assets (Cr) ₹8,005 on 31 Dec 19
Category Debt - Floating Rate
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 1.31
Sharpe Ratio 5.55
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 7.87%
Effective Maturity 1 Year 3 Months 22 Days
Modified Duration 1 Year 22 Days

Growth of 10,000 investment over the years.

DateValue
31 Dec 14₹10,000
31 Dec 15₹10,808
31 Dec 16₹11,768
31 Dec 17₹12,563
31 Dec 18₹13,394
31 Dec 19₹14,522

ICICI Prudential Floating Interest Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125
Invest Now

Returns for ICICI Prudential Floating Interest Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month 0.7%
3 Month 2%
6 Month 4.2%
1 Year 8.5%
3 Year 7.2%
5 Year 7.7%
10 Year
15 Year
Since launch 8%
Historical performance (Yearly) on absolute basis
YearReturns
2018 8.4%
2017 6.6%
2016 6.8%
2015 8.9%
2014 8.1%
2013 9.2%
2012 9.2%
2011 9.7%
2010 9.1%
2009 5.6%
Fund Manager information for ICICI Prudential Floating Interest Fund
NameSinceTenure
Rahul Goswami27 Sep 127.18 Yr.
Nikhil Kabra3 Aug 163.33 Yr.

Data below for ICICI Prudential Floating Interest Fund as on 31 Dec 19

Asset Allocation
Asset ClassValue
Cash18.71%
Debt81.29%
Debt Sector Allocation
SectorValue
Corporate77.14%
Cash Equivalent12.26%
Government10.6%
Credit Quality
RatingValue
A3.79%
AA48.59%
AAA47.63%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Bahadur Chand Investments Private Limited
Debentures | -
5%₹368 Cr369
Bharti Airtel Limited
Debentures | -
4%₹349 Cr3,500
Net Current Assets
Net Current Assets | -
4%₹320 Cr
EMBASSY OFFICE PARKS REIT
Debentures | -
4%₹318 Cr3,000
State Bank Of India
Debentures | -
3%₹260 Cr2,500
Vedanta Limited
Debentures | -
3%₹248 Cr2,500
POWER FINANCE CORPORATION LIMITED
Debentures | -
3%₹229 Cr2,250
GOVT STOCK
Sovereign Bonds | -
2%₹187 Cr18,000,000
↑ 8,000,000
United Spirits Limited
Debentures | -
2%₹179 Cr1,800
Treps
CBLO/Reverse Repo | -
2%₹174 Cr

4. PGIM India Floating Rate Fund

(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.

PGIM India 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 CAGR/Annualized return of 0.5% since its launch.  Ranked 42 in Floating Rate category. .

Below is the key information for PGIM India Floating Rate Fund

PGIM India Floating Rate Fund
Growth
Launch Date 26 Mar 10
NAV (22 Jun 19) ₹10.8156 ↑ 0.00   (0.01 %)
Net Assets (Cr) ₹13 on 30 Apr 19
Category Debt - Floating Rate
AMC Pramerica Asset Managers Private Limited
Rating
Risk Moderately Low
Expense Ratio 0.51
Sharpe Ratio 3.6
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 15.04%
Effective Maturity 1 Month 13 Days
Modified Duration 1 Month 6 Days

Growth of 10,000 investment over the years.

DateValue
31 Dec 14₹10,000
31 Dec 15₹10,824
31 Dec 16₹11,724
31 Dec 17₹12,521
31 Dec 18₹13,368

PGIM India Floating Rate Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%

Returns for PGIM India Floating Rate Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month -48.1%
3 Month -47.2%
6 Month -46.2%
1 Year -44.4%
3 Year -14%
5 Year -5.6%
10 Year
15 Year
Since launch 0.5%
Historical performance (Yearly) on absolute basis
YearReturns
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Fund Manager information for PGIM India Floating Rate Fund
NameSinceTenure

Data below for PGIM India Floating Rate Fund as on 30 Apr 19

Asset Allocation
Asset ClassValue
Debt Sector Allocation
SectorValue
Credit Quality
RatingValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

Advantages of Floating Rate Funds

Some of the benefits of Floating Rate Funds are:

  1. 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.
  2. 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.
  3. 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?

  1. Open Free Investment Account for Lifetime at Fincash.com.

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

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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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