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Top 4 Best Floating Rate Funds to Invest in 2019 - Fincash

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Top 4 Best Floating Rate Funds to Invest in 2019

Updated on June 19, 2019 , 695 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 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

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 ₹233.791
↑ 0.03
₹5,8152.24.48.67.97.58.06%8M 23D10M 6D
Reliance Floating Rate Fund Growth ₹29.7555
↓ -0.01
₹6,0622.24.68.57.15.88.53%1Y 1M 28D1Y 4M 2D
ICICI Prudential Floating Interest Fund Growth ₹282.735
↓ -0.02
₹6,510247.67.36.69.02%6M 7D7M 28D
DHFL Pramerica Floating Rate Fund Growth ₹10.8141
↑ 0.00
₹13-47.2-46.2-44.4-146.815.04%1M 6D1M 13D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 21 Jun 19

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 2018 was 7.5% , 2017 was 6.9% and 2016 was 9.5% .

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 (21 Jun 19) ₹233.791 ↑ 0.03   (0.01 %)
Net Assets (Cr) ₹5,815 on 30 Apr 19
Category Debt - Floating Rate
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.38
Sharpe Ratio 6.44
Information Ratio 0.85
Alpha Ratio -4.09
Min Investment 1,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 8.06%
Effective Maturity 10 Months 6 Days
Modified Duration 8 Months 23 Days

Growth of 10,000 investment over the years.

DateValue
31 May 14₹10,000
31 May 15₹10,913
31 May 16₹11,895
31 May 17₹12,932
31 May 18₹13,758
31 May 19₹14,968

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 21 Jun 19

DurationReturns
1 Month 0.8%
3 Month 2.2%
6 Month 4.4%
1 Year 8.6%
3 Year 7.9%
5 Year 8.4%
10 Year
15 Year
Since launch 8.6%
Historical performance (Yearly) on absolute basis
YearReturns
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
NameSinceTenure
Kaustubh Gupta15 Jul 117.8 Yr.

Data below for Aditya Birla Sun Life Floating Rate Fund - Long Term as on 30 Apr 19

Asset Allocation
Asset ClassValue
Cash33.08%
Debt66.92%
Debt Sector Allocation
SectorValue
Corporate49.28%
Cash Equivalent30.11%
Government17.67%
Securitized2.95%
Credit Quality
RatingValue
AA6.87%
AAA93.13%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Power Finance Corporation Ltd.
Debentures | -
7%₹426 Cr4,230
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Certificate of Deposit | -
4%₹256 Cr27,500
↑ 27,500
Shriram Transport Finance Company Limited
Debentures | -
4%₹235 Cr2,350
Small Industries Development Bank Of India
Debentures | -
4%₹216 Cr2,160
REC LIMITED
Debentures | -
3%₹197 Cr1,960
NRSS XXIX TRANSMISSION LIMITED
Debentures | -
3%₹150 Cr1,500
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Debentures | -
3%₹149 Cr1,450
↑ 900
Export-Import Bank Of India
Certificate of Deposit | -
2%₹142 Cr15,000
Rural Electrification Corporation Limited
Debentures | -
2%₹126 Cr1,250
L&T FINANCE LIMITED
Commercial Paper | -
2%₹120 Cr2,500

2. Reliance 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).

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 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% .

Below is the key information for Reliance Floating Rate Fund

Reliance Floating Rate Fund
Growth
Launch Date 27 Aug 04
NAV (21 Jun 19) ₹29.7555 ↓ -0.01   (-0.02 %)
Net Assets (Cr) ₹6,062 on 30 Apr 19
Category Debt - Floating Rate
AMC Reliance Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 0.62
Sharpe Ratio 2.63
Information Ratio -1.1
Alpha Ratio -0.51
Min Investment 5,000
Min SIP Investment 100
Exit Load 0-1 Months (0.5%),1 Months and above(NIL)
Yield to Maturity 8.53%
Effective Maturity 1 Year 4 Months 2 Days
Modified Duration 1 Year 1 Month 28 Days

Growth of 10,000 investment over the years.

DateValue
31 May 14₹10,000
31 May 15₹10,982
31 May 16₹11,878
31 May 17₹12,825
31 May 18₹13,432
31 May 19₹14,591

Reliance 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 Reliance 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 21 Jun 19

DurationReturns
1 Month 0.9%
3 Month 2.2%
6 Month 4.6%
1 Year 8.5%
3 Year 7.1%
5 Year 7.8%
10 Year
15 Year
Since launch 7.6%
Historical performance (Yearly) on absolute basis
YearReturns
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
NameSinceTenure
Amit Tripathi7 Oct 0711.33 Yr.
Vivek Sharma1 Oct 135.34 Yr.
Kinjal Desai25 May 180.69 Yr.

Data below for Reliance Floating Rate Fund as on 30 Apr 19

Asset Allocation
Asset ClassValue
Cash10.4%
Debt89.6%
Other0%
Debt Sector Allocation
SectorValue
Corporate64.73%
Government21.38%
Cash Equivalent10.39%
Securitized3.51%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Tata Sons Limited
Debentures | -
7%₹423 Cr4,250
Reliance Industries Limited
Debentures | -
7%₹399 Cr4,050
Mahindra & Mahindra Financial Services Ltd
Debentures | -
5%₹301 Cr3,000
Indiabulls Housing Finance Limited
Debentures | -
5%₹297 Cr3,000
Power Finance Corporation Ltd.
Debentures | -
4%₹273 Cr2,750
LIC Housing Finance Limited
Debentures | -
4%₹251 Cr2,500
India Grid Trust
Unlisted bonds | -
4%₹249 Cr2,500
Net Current Assets
Net Current Assets | -
4%₹243 Cr
Nabha Power Limited
Debentures | -
4%₹224 Cr2,250
↑ 500
Reliance Jio Infocomm Limited
Debentures | -
4%₹223 Cr2,246

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 7.9% since its launch.  Ranked 35 in Floating Rate category.  Return for 2018 was 6.6% , 2017 was 6.8% and 2016 was 8.9% .

Below is the key information for ICICI Prudential Floating Interest Fund

ICICI Prudential Floating Interest Fund
Growth
Launch Date 18 Nov 05
NAV (21 Jun 19) ₹282.735 ↓ -0.02   (-0.01 %)
Net Assets (Cr) ₹6,510 on 30 Apr 19
Category Debt - Floating Rate
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 1.33
Sharpe Ratio 4.79
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 9.02%
Effective Maturity 7 Months 28 Days
Modified Duration 6 Months 7 Days

Growth of 10,000 investment over the years.

DateValue
31 May 14₹10,000
31 May 15₹10,869
31 May 16₹11,771
31 May 17₹12,782
31 May 18₹13,512
31 May 19₹14,562

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 21 Jun 19

DurationReturns
1 Month 0.7%
3 Month 2%
6 Month 4%
1 Year 7.6%
3 Year 7.3%
5 Year 7.8%
10 Year
15 Year
Since launch 7.9%
Historical performance (Yearly) on absolute basis
YearReturns
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
NameSinceTenure
Rahul Goswami27 Sep 126.51 Yr.
Nikhil Kabra3 Aug 162.66 Yr.

Data below for ICICI Prudential Floating Interest Fund as on 30 Apr 19

Asset Allocation
Asset ClassValue
Cash23.22%
Debt76.78%
Debt Sector Allocation
SectorValue
Corporate70.21%
Cash Equivalent23.22%
Securitized4.31%
Government2.26%
Credit Quality
RatingValue
A3.78%
AA64.08%
AAA32.15%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Bahadur Chand Investments Private Limited
Debentures | -
10%₹651 Cr650
PIRAMAL CAPITAL & HOUSING FINANCE LIMITED
Commercial Paper | -
6%₹370 Cr7,600
Net Current Assets
Net Current Assets | -
5%₹354 Cr
Indiabulls Housing Finance Limited
Debentures | -
5%₹349 Cr3,500
Bharti Airtel Limited
Debentures | -
5%₹346 Cr3,500
Vedanta Limited
Debentures | -
4%₹244 Cr2,500
JSW Steel Limited
Debentures | -
4%₹230 Cr2,290
Treps
CBLO/Reverse Repo | -
3%₹192 Cr
United Spirits Limited
Debentures | -
3%₹176 Cr1,800
Zydus Wellness Ltd.
Debentures | -
2%₹154 Cr1,550

4. DHFL Pramerica 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.

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 CAGR/Annualized return of 0.5% since its launch.  Ranked 42 in Floating Rate category.  Return for 2018 was 6.8% , 2017 was 6.8% and 2016 was 8.3% .

Below is the key information for DHFL Pramerica Floating Rate Fund

DHFL Pramerica Floating Rate Fund
Growth
Launch Date 26 Mar 10
NAV (21 Jun 19) ₹10.8141 ↑ 0.00   (0.01 %)
Net Assets (Cr) ₹13 on 30 Apr 19
Category Debt - Floating Rate
AMC DHFL 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 May 14₹10,000
31 May 15₹10,853
31 May 16₹11,756
31 May 17₹12,667
31 May 18₹13,461
31 May 19₹14,543

DHFL Pramerica Floating Rate Fund SIP Returns

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

Returns for DHFL Pramerica 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 21 Jun 19

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 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
NameSinceTenure
Puneet Pal13 Dec 171.38 Yr.
Rakesh Suri5 Jan 172.32 Yr.

Data below for DHFL Pramerica Floating Rate Fund as on 30 Apr 19

Asset Allocation
Asset ClassValue
Cash68.06%
Debt31.94%
Debt Sector Allocation
SectorValue
Cash Equivalent68.06%
Corporate31.94%
Credit Quality
RatingValue
A100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Dewan Housing Finance Corporation Limited
Debentures | -
53%₹4 Cr428,670
Clearing Corporation Of India Ltd.
CBLO | -
38%₹3 Cr
Net Receivables / (Payables)
Net Current Assets | -
9%₹1 Cr

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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