+91-22-4891390910 Corporate Bond Mutual Funds to Invest 2026 - 2027
In the last few years, corporate bond Mutual Funds have quietly become one of the most sensible choices for investors looking beyond fixed deposits but without taking equity-level risk.
As interest rates fluctuate and Volatility remains a constant in equity markets, corporate bond funds offer a middle ground — better return potential than FDs and relatively lower risk compared to equity-oriented funds.
Corporate bond mutual funds invest primarily in debt instruments issued by well-established companies. These companies raise money by issuing Bonds, and in return, they pay regular interest to investors.
Corporate bond mutual funds are often preferred by investors who want stable income, predictable returns, and controlled risk. Over a full market cycle, they have the potential to deliver returns higher than traditional fixed-income options like Bank FDs.
That said, higher returns usually come with higher credit risk — which is why fund quality and Portfolio composition matter more here than anywhere else.
What Are Corporate Bond Mutual Funds?
Corporate bond mutual funds invest at least 80% of their assets in high-rated corporate debt instruments. These typically include bonds issued by:
- Large private sector companies
- Public Sector Undertakings (PSUs)
- Financial institutions and banks
Most corporate bond funds focus on AAA and AA+ rated papers, making them relatively safer within the debt mutual fund universe.
Types of Corporate Bond Funds
Broadly, corporate bond funds can be classified into two categories based on credit quality:
1. High-Rated Corporate Bond Funds
These funds invest predominantly in AAA-rated companies, PSUs, and banking institutions. Credit risk is low, but returns tend to be moderate and stable.
Best suited for:
- Conservative investors
- Retirees seeking regular income
- Investors transitioning from FDs
2. Moderate Credit Risk Corporate Bond Funds
These funds allocate a portion of their portfolio to AA or AA- rated companies. While returns may be slightly higher, credit risk is also elevated.
Best suited for:
- Investors with moderate risk appetite
- Those who understand credit cycles
Talk to our investment specialist
Who Should Invest in Corporate Bonds?
Corporate bond funds are suitable for investors who:
- Want higher fixed-income returns than FDs
- Prefer relatively low volatility
- Have an investment horizon of 2–4 years or more
- Want regular income with better tax efficiency than traditional instruments
While these funds aim to protect capital, no debt fund is entirely risk-free. Diversification across issuers and high credit quality remain key.
Key Features of Corporate Bond Funds
1. Bond Price
Bond prices fluctuate based on interest rate movements and credit perception. The same bond may trade at different prices depending on market conditions.
2. Par Value
Par Value represents the principal amount returned at maturity. In India, most corporate bonds have a par value of ₹1,000.
Fund Selection Methodology used to find 10 funds
Top Rated Corporate Bond Mutual Funds FY 26 - 27
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2024 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Franklin India Corporate Debt Fund Growth ₹103.141
↓ -0.14 ₹1,338 1.1 2.5 8.7 7.6 9.1 7.12% 2Y 5M 23D 5Y 10M 10D BNP Paribas Corporate Bond Fund Growth ₹28.3802
↓ -0.04 ₹482 0.5 2.1 7.3 7.7 8.3 6.92% 3Y 3M 4Y 2M 26D ICICI Prudential Corporate Bond Fund Growth ₹30.8538
↓ -0.06 ₹33,871 0.9 2.5 7.3 7.7 8 7.02% 2Y 11M 1D 5Y 5M 12D Kotak Corporate Bond Fund Standard Growth ₹3,892.69
↓ -7.60 ₹18,841 0.6 2.2 7 7.5 7.8 7.04% 2Y 11M 12D 4Y 6M 14D Nippon India Prime Debt Fund Growth ₹61.779
↓ -0.09 ₹10,431 0.5 1.9 6.9 7.6 7.8 7.71% 3Y 10M 20D 5Y 9M 29D Sundaram Corporate Bond Fund Growth ₹41.3252
↓ -0.06 ₹768 0.5 1.9 6.6 7.1 7.5 6.9% 3Y 3M 4Y 3M 7D Bandhan Corporate Bond Fund Growth ₹19.7768
↓ -0.02 ₹14,856 0.6 2 6.6 7.1 7.4 6.73% 2Y 6M 3Y Invesco India Corporate Bond Fund Growth ₹3,268.76
↓ -6.19 ₹7,307 0.4 1.9 6.6 7.2 7.6 6.96% 3Y 4M 24D 4Y 4M 28D Aditya Birla Sun Life Corporate Bond Fund Growth ₹115.883
↓ -0.32 ₹29,856 0.4 1.8 6.3 7.5 7.4 7.12% 4Y 10M 24D 7Y 6M 14D HDFC Corporate Bond Fund Growth ₹33.3998
↓ -0.09 ₹34,805 0.3 1.7 6.3 7.5 7.3 7.13% 4Y 6M 11D 7Y 9M 18D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 6 Feb 26 Research Highlights & Commentary of 10 Funds showcased
Commentary Franklin India Corporate Debt Fund BNP Paribas Corporate Bond Fund ICICI Prudential Corporate Bond Fund Kotak Corporate Bond Fund Standard Nippon India Prime Debt Fund Sundaram Corporate Bond Fund Bandhan Corporate Bond Fund Invesco India Corporate Bond Fund Aditya Birla Sun Life Corporate Bond Fund HDFC Corporate Bond Fund Point 1 Bottom quartile AUM (₹1,338 Cr). Bottom quartile AUM (₹482 Cr). Top quartile AUM (₹33,871 Cr). Upper mid AUM (₹18,841 Cr). Lower mid AUM (₹10,431 Cr). Bottom quartile AUM (₹768 Cr). Upper mid AUM (₹14,856 Cr). Lower mid AUM (₹7,307 Cr). Upper mid AUM (₹29,856 Cr). Highest AUM (₹34,805 Cr). Point 2 Oldest track record among peers (28 yrs). Established history (17+ yrs). Established history (16+ yrs). Established history (18+ yrs). Established history (25+ yrs). Established history (21+ yrs). Established history (10+ yrs). Established history (18+ yrs). Established history (28+ yrs). Established history (15+ yrs). Point 3 Rating: 2★ (bottom quartile). Rating: 3★ (lower mid). Rating: 4★ (upper mid). Rating: 4★ (upper mid). Rating: 4★ (upper mid). Rating: 3★ (lower mid). Not Rated. Rating: 2★ (bottom quartile). Top rated. Rating: 5★ (top quartile). Point 4 Risk profile: Moderate. Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderately Low. Risk profile: Moderately Low. Risk profile: Moderately Low. Risk profile: Moderate. Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderately Low. Point 5 1Y return: 8.67% (top quartile). 1Y return: 7.29% (top quartile). 1Y return: 7.25% (upper mid). 1Y return: 6.97% (upper mid). 1Y return: 6.88% (upper mid). 1Y return: 6.63% (lower mid). 1Y return: 6.61% (lower mid). 1Y return: 6.60% (bottom quartile). 1Y return: 6.29% (bottom quartile). 1Y return: 6.27% (bottom quartile). Point 6 1M return: 0.32% (top quartile). 1M return: 0.14% (lower mid). 1M return: 0.21% (top quartile). 1M return: 0.15% (upper mid). 1M return: 0.19% (upper mid). 1M return: 0.09% (lower mid). 1M return: 0.18% (upper mid). 1M return: 0.04% (bottom quartile). 1M return: 0.01% (bottom quartile). 1M return: 0.03% (bottom quartile). Point 7 Sharpe: 1.29 (top quartile). Sharpe: 1.13 (upper mid). Sharpe: 1.43 (top quartile). Sharpe: 1.02 (upper mid). Sharpe: 0.87 (upper mid). Sharpe: 0.83 (lower mid). Sharpe: 0.82 (lower mid). Sharpe: 0.80 (bottom quartile). Sharpe: 0.66 (bottom quartile). Sharpe: 0.63 (bottom quartile). Point 8 Information ratio: 0.00 (top quartile). Information ratio: 0.00 (top quartile). Information ratio: 0.00 (upper mid). Information ratio: 0.00 (upper mid). Information ratio: 0.00 (upper mid). Information ratio: 0.00 (lower mid). Information ratio: 0.00 (lower mid). Information ratio: 0.00 (bottom quartile). Information ratio: 0.00 (bottom quartile). Information ratio: 0.00 (bottom quartile). Point 9 Yield to maturity (debt): 7.12% (upper mid). Yield to maturity (debt): 6.92% (bottom quartile). Yield to maturity (debt): 7.02% (lower mid). Yield to maturity (debt): 7.04% (upper mid). Yield to maturity (debt): 7.71% (top quartile). Yield to maturity (debt): 6.90% (bottom quartile). Yield to maturity (debt): 6.73% (bottom quartile). Yield to maturity (debt): 6.96% (lower mid). Yield to maturity (debt): 7.12% (upper mid). Yield to maturity (debt): 7.13% (top quartile). Point 10 Modified duration: 2.48 yrs (top quartile). Modified duration: 3.25 yrs (upper mid). Modified duration: 2.92 yrs (upper mid). Modified duration: 2.95 yrs (upper mid). Modified duration: 3.89 yrs (bottom quartile). Modified duration: 3.25 yrs (lower mid). Modified duration: 2.50 yrs (top quartile). Modified duration: 3.40 yrs (lower mid). Modified duration: 4.90 yrs (bottom quartile). Modified duration: 4.53 yrs (bottom quartile). Franklin India Corporate Debt Fund
BNP Paribas Corporate Bond Fund
ICICI Prudential Corporate Bond Fund
Kotak Corporate Bond Fund Standard
Nippon India Prime Debt Fund
Sundaram Corporate Bond Fund
Bandhan Corporate Bond Fund
Invesco India Corporate Bond Fund
Aditya Birla Sun Life Corporate Bond Fund
HDFC Corporate Bond Fund
All the funds mentioned above are ideal, we are giving you detailed analysis of 5 funds.
(Erstwhile Franklin India Income Builder Account - Plan A) The investment objective of the Scheme is primarily to provide investors Regular income under the Dividend Plan and Capital appreciation under the Growth Plan. Below is the key information for Franklin India Corporate Debt Fund Returns up to 1 year are on The investment objective of the Scheme is to generate income and capital gains through investments in a portfolio of debt and money market instruments. However, there can be no assurance that the investment objectives of the Scheme will be realized. The Scheme launched hereunder does not guarantee/indicate any returns. Research Highlights for BNP Paribas Corporate Bond Fund Below is the key information for BNP Paribas Corporate Bond Fund Returns up to 1 year are on (Erstwhile ICICI Prudential Ultra Short Term Plan) ICICI Prudential Ultra Short Term Plan is an open-ended income fund that intends to generate regular income through investments in a basket of debt and money market instruments of very short maturities with a view to providing reasonable returns, while maintaining an optimum balance of safety, liquidity and yield. However, there can be no assurance that the investment objective of the scheme will be realized. Research Highlights for ICICI Prudential Corporate Bond Fund Below is the key information for ICICI Prudential Corporate Bond Fund Returns up to 1 year are on 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. Research Highlights for Kotak Corporate Bond Fund Standard Below is the key information for Kotak Corporate Bond Fund Standard Returns up to 1 year are on (Erstwhile Reliance Medium Term Fund) The primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unit-holders and the secondary objective is growth of capital. Research Highlights for Nippon India Prime Debt Fund Below is the key information for Nippon India Prime Debt Fund Returns up to 1 year are on 1. Franklin India Corporate Debt Fund
Franklin India Corporate Debt Fund
Growth Launch Date 23 Jun 97 NAV (06 Feb 26) ₹103.141 ↓ -0.14 (-0.14 %) Net Assets (Cr) ₹1,338 on 31 Dec 25 Category Debt - Corporate Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆ Risk Moderate Expense Ratio 0.79 Sharpe Ratio 1.29 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load 0-1 Years (0.5%),1 Years and above(NIL) Yield to Maturity 7.12% Effective Maturity 5 Years 10 Months 10 Days Modified Duration 2 Years 5 Months 23 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 21 ₹10,000 31 Jan 22 ₹10,404 31 Jan 23 ₹10,761 31 Jan 24 ₹11,476 31 Jan 25 ₹12,331 31 Jan 26 ₹13,425 Returns for Franklin India Corporate Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Feb 26 Duration Returns 1 Month 0.3% 3 Month 1.1% 6 Month 2.5% 1 Year 8.7% 3 Year 7.6% 5 Year 6.2% 10 Year 15 Year Since launch 8.5% Historical performance (Yearly) on absolute basis
Year Returns 2024 9.1% 2023 7.6% 2022 6.5% 2021 3.2% 2020 3.8% 2019 9% 2018 9.2% 2017 7.5% 2016 7.7% 2015 9% Fund Manager information for Franklin India Corporate Debt Fund
Name Since Tenure Rahul Goswami 6 Oct 23 2.24 Yr. Anuj Tagra 7 Mar 24 1.82 Yr. Chandni Gupta 7 Mar 24 1.82 Yr. Data below for Franklin India Corporate Debt Fund as on 31 Dec 25
Asset Allocation
Asset Class Value Debt 109.34% Other 0.23% Debt Sector Allocation
Sector Value Corporate 60.65% Government 48.69% Credit Quality
Rating Value AA 6.82% AAA 93.18% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.9% Govt Stock 2065
Sovereign Bonds | -6% ₹87 Cr 9,029,500
↓ -500,000 Poonawalla Fincorp Limited
Debentures | -6% ₹81 Cr 8,000 National Bank For Agriculture And Rural Development
Debentures | -6% ₹78 Cr 7,500 RJ Corp Limited
Debentures | -4% ₹55 Cr 5,467 Sikka Ports & Terminals Limited
Debentures | -4% ₹52 Cr 500 Summit Digitel Infrastructure Limited
Debentures | -4% ₹52 Cr 5,000 Rec Limited
Debentures | -4% ₹51 Cr 9,000 Small Industries Development Bank Of India
Debentures | -4% ₹50 Cr 500 Embassy Office Parks Reit
Debentures | -4% ₹50 Cr 5,000 Jubilant Beverages Limited
Debentures | -3% ₹46 Cr 4,269 2. BNP Paribas Corporate Bond Fund
BNP Paribas Corporate Bond Fund
Growth Launch Date 8 Nov 08 NAV (06 Feb 26) ₹28.3802 ↓ -0.04 (-0.15 %) Net Assets (Cr) ₹482 on 31 Dec 25 Category Debt - Corporate Bond AMC BNP Paribas Asset Mgmt India Pvt. Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 0.58 Sharpe Ratio 1.13 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load 0-12 Months (1%),12-24 Months (0.5%),24-36 Months (0.25%),36 Months and above(NIL) Yield to Maturity 6.92% Effective Maturity 4 Years 2 Months 26 Days Modified Duration 3 Years 3 Months Growth of 10,000 investment over the years.
Date Value 31 Jan 21 ₹10,000 31 Jan 22 ₹10,201 31 Jan 23 ₹10,417 31 Jan 24 ₹11,170 31 Jan 25 ₹12,118 31 Jan 26 ₹13,011 Returns for BNP Paribas Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Feb 26 Duration Returns 1 Month 0.1% 3 Month 0.5% 6 Month 2.1% 1 Year 7.3% 3 Year 7.7% 5 Year 5.7% 10 Year 15 Year Since launch 6.2% Historical performance (Yearly) on absolute basis
Year Returns 2024 8.3% 2023 8.3% 2022 7% 2021 1.6% 2020 2.2% 2019 9.9% 2018 0.9% 2017 5.2% 2016 6.7% 2015 10.8% Fund Manager information for BNP Paribas Corporate Bond Fund
Name Since Tenure Gurvinder Wasan 21 Oct 24 1.2 Yr. Vikram Pamnani 10 Jul 24 1.48 Yr. Data below for BNP Paribas Corporate Bond Fund as on 31 Dec 25
Asset Allocation
Asset Class Value Cash 3.43% Equity 2.28% Debt 94.09% Other 0.2% Debt Sector Allocation
Sector Value Corporate 60.1% Government 33.99% Cash Equivalent 3.43% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Debentures | -6% ₹30 Cr 3,000 Indian Railway Finance Corporation Limited
Debentures | -4% ₹20 Cr 2,000 Rec Limited
Debentures | -4% ₹19 Cr 1,900 6.48% Govt Stock 2035
Sovereign Bonds | -4% ₹17 Cr 1,750,000
↑ 250,000 7.18% Govt Stock 2033
Sovereign Bonds | -3% ₹15 Cr 1,500,000
↓ -500,000 Export Import Bank Of India
Debentures | -3% ₹15 Cr 1,500 Bajaj Housing Finance Limited
Debentures | -3% ₹15 Cr 1,500 Ntpc Limited
Debentures | -3% ₹15 Cr 1,500 6.01% Govt Stock 2030
Sovereign Bonds | -3% ₹14 Cr 1,400,000
↑ 1,400,000 6.33% Govt Stock 2035
Sovereign Bonds | -3% ₹13 Cr 1,300,000
↓ -1,850,000 3. ICICI Prudential Corporate Bond Fund
ICICI Prudential Corporate Bond Fund
Growth Launch Date 11 Aug 09 NAV (06 Feb 26) ₹30.8538 ↓ -0.06 (-0.20 %) Net Assets (Cr) ₹33,871 on 31 Dec 25 Category Debt - Corporate Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.57 Sharpe Ratio 1.43 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.02% Effective Maturity 5 Years 5 Months 12 Days Modified Duration 2 Years 11 Months 1 Day Growth of 10,000 investment over the years.
Date Value 31 Jan 21 ₹10,000 31 Jan 22 ₹10,402 31 Jan 23 ₹10,912 31 Jan 24 ₹11,762 31 Jan 25 ₹12,708 31 Jan 26 ₹13,651 Returns for ICICI Prudential Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Feb 26 Duration Returns 1 Month 0.2% 3 Month 0.9% 6 Month 2.5% 1 Year 7.3% 3 Year 7.7% 5 Year 6.5% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2024 8% 2023 8% 2022 7.6% 2021 4.5% 2020 4.1% 2019 10.4% 2018 9.9% 2017 6.4% 2016 6.3% 2015 9.8% Fund Manager information for ICICI Prudential Corporate Bond Fund
Name Since Tenure Manish Banthia 22 Jan 24 1.94 Yr. Ritesh Lunawat 22 Jan 24 1.94 Yr. Data below for ICICI Prudential Corporate Bond Fund as on 31 Dec 25
Asset Allocation
Asset Class Value Cash 22.47% Debt 77.26% Other 0.28% Debt Sector Allocation
Sector Value Corporate 59.54% Cash Equivalent 21.66% Government 18.52% Credit Quality
Rating Value AA 0.5% AAA 99.5% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.82% Govt Stock 2033
Sovereign Bonds | -4% ₹1,479 Cr 143,282,560 LIC Housing Finance Ltd
Debentures | -4% ₹1,469 Cr 145,500 SIDDHIVINAYAK SECURITISATION TRUST
Unlisted bonds | -3% ₹1,006 Cr 1,000 6.48% Govt Stock 2035
Sovereign Bonds | -3% ₹949 Cr 95,741,500
↑ 95,664,100 SHIVSHAKTI SECURITISATION TRUST
Unlisted bonds | -3% ₹904 Cr 900 Pipeline Infrastructure Limited
Debentures | -2% ₹827 Cr 80,500 7.1% Govt Stock 2034
Sovereign Bonds | -2% ₹757 Cr 73,594,780 7.34% Govt Stock 2064
Sovereign Bonds | -2% ₹582 Cr 58,412,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹546 Cr 54,000 6.9% Govt Stock 2065
Sovereign Bonds | -2% ₹533 Cr 56,500,000 4. Kotak Corporate Bond Fund Standard
Kotak Corporate Bond Fund Standard
Growth Launch Date 21 Sep 07 NAV (06 Feb 26) ₹3,892.69 ↓ -7.60 (-0.19 %) Net Assets (Cr) ₹18,841 on 31 Dec 25 Category Debt - Corporate Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.67 Sharpe Ratio 1.02 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.04% Effective Maturity 4 Years 6 Months 14 Days Modified Duration 2 Years 11 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 21 ₹10,000 31 Jan 22 ₹10,419 31 Jan 23 ₹10,813 31 Jan 24 ₹11,590 31 Jan 25 ₹12,552 31 Jan 26 ₹13,442 Returns for Kotak Corporate Bond Fund Standard
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Feb 26 Duration Returns 1 Month 0.2% 3 Month 0.6% 6 Month 2.2% 1 Year 7% 3 Year 7.5% 5 Year 6.2% 10 Year 15 Year Since launch 7.7% Historical performance (Yearly) on absolute basis
Year Returns 2024 7.8% 2023 8.3% 2022 6.9% 2021 3.7% 2020 3.8% 2019 9.7% 2018 9.6% 2017 7.5% 2016 6.9% 2015 9.4% Fund Manager information for Kotak Corporate Bond Fund Standard
Name Since Tenure Deepak Agrawal 1 Feb 15 10.92 Yr. Manu Sharma 1 Nov 22 3.17 Yr. Data below for Kotak Corporate Bond Fund Standard as on 31 Dec 25
Asset Allocation
Asset Class Value Cash 8.16% Debt 91.58% Other 0.26% Debt Sector Allocation
Sector Value Corporate 63.22% Government 29.15% Cash Equivalent 7.37% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -6% ₹1,155 Cr 111,935,080 7.09% Govt Stock 2054
Sovereign Bonds | -3% ₹636 Cr 65,100,000
↓ -13,000,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹592 Cr 58,500 National Bank For Agriculture And Rural Development
Debentures | -3% ₹532 Cr 52,500 6.54% Govt Stock 2034
Sovereign Bonds | -3% ₹499 Cr 49,000,000 Bajaj Finance Limited
Debentures | -2% ₹441 Cr 43,500 Axis Bank Ltd.
Debentures | -2% ₹395 Cr 40,000
↑ 40,000 Small Industries Development Bank Of India
Debentures | -2% ₹354 Cr 35,000 Power Finance Corporation Limited
Debentures | -2% ₹353 Cr 35,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹329 Cr 32,500 5. Nippon India Prime Debt Fund
Nippon India Prime Debt Fund
Growth Launch Date 14 Sep 00 NAV (06 Feb 26) ₹61.779 ↓ -0.09 (-0.15 %) Net Assets (Cr) ₹10,431 on 31 Dec 25 Category Debt - Corporate Bond AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.71 Sharpe Ratio 0.87 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.71% Effective Maturity 5 Years 9 Months 29 Days Modified Duration 3 Years 10 Months 20 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 21 ₹10,000 31 Jan 22 ₹10,509 31 Jan 23 ₹10,985 31 Jan 24 ₹11,788 31 Jan 25 ₹12,778 31 Jan 26 ₹13,678 Returns for Nippon India Prime Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 6 Feb 26 Duration Returns 1 Month 0.2% 3 Month 0.5% 6 Month 1.9% 1 Year 6.9% 3 Year 7.6% 5 Year 6.6% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2024 7.8% 2023 8.4% 2022 7.1% 2021 4.3% 2020 4.7% 2019 9.5% 2018 7.8% 2017 6.9% 2016 6.6% 2015 9.1% Fund Manager information for Nippon India Prime Debt Fund
Name Since Tenure Vivek Sharma 1 Feb 20 5.92 Yr. Kinjal Desai 25 May 18 7.61 Yr. Lokesh Maru 5 Sep 25 0.32 Yr. Divya Sharma 5 Sep 25 0.32 Yr. Data below for Nippon India Prime Debt Fund as on 31 Dec 25
Asset Allocation
Asset Class Value Cash 5.07% Debt 94.69% Other 0.25% Debt Sector Allocation
Sector Value Corporate 56.42% Government 38.27% Cash Equivalent 5.07% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.68% Govt Stock 2040
Sovereign Bonds | -8% ₹787 Cr 81,000,000
↓ -1,500,000 6.28% Govt Stock 2032
Sovereign Bonds | -3% ₹281 Cr 28,500,000
↑ 28,500,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹248 Cr 24,500 6.92% Govt Stock 2039
Sovereign Bonds | -2% ₹240 Cr 24,000,000
↓ -1,000,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹209 Cr 20,500 Aditya Birla Housing Finance Limited
Debentures | -2% ₹203 Cr 20,000 SIDDHIVINAYAK SECURITISATION TRUST
Unlisted bonds | -2% ₹201 Cr 200 SHIVSHAKTI SECURITISATION TRUST
Unlisted bonds | -2% ₹201 Cr 200 7.02% Govt Stock 2031
Sovereign Bonds | -2% ₹190 Cr 18,500,000
↑ 5,000,000 Maharashtra (Government of) 7.27%
- | -2% ₹188 Cr 19,000,000
Additional Features You Should Understand
Coupon Interest
Coupon interest is the regular interest paid by the bond issuer. It is calculated as a percentage of the par value and forms the steady income component of corporate bond funds.
Yield to Maturity (YTM)
YTM indicates the annualised return an investor can expect if the bond is held until maturity. While a higher YTM looks attractive, it may also signal higher credit or duration risk.
Current Yield
Current yield measures the annual interest income relative to the bond’s current market price. For example, a bond with a ₹1,000 par value and a 20% coupon rate pays ₹200 annually.
Taxation of Corporate Bond Mutual Funds (Updated & Important)
Taxation rules for debt mutual funds changed significantly from 1 April 2023, and these rules continue to apply in 2026–27 for corporate bond mutual funds.
How Corporate Bond Funds Are Taxed
All Capital Gains from corporate bond mutual funds are taxed as per your income tax slab, irrespective of the holding period.
The earlier benefit of 20% long-term capital gains tax with indexation (after 3 years) is no longer available for most debt mutual funds, including corporate bond funds.
Returns from these funds are treated like interest income and added to your total taxable income.
Has Union Budget 2026 Changed Anything?
Union Budget 2026 did not introduce any new tax changes specifically for corporate bond mutual funds. Taxation remains slab-based, providing clarity and stability for investors planning medium-term allocations.
What This Means for Investors
Despite slab-based taxation, corporate bond funds can still make sense for:
- Investors seeking better pre-tax returns than bank fixed deposits
- Those who value daily liquidity and flexibility over lock-in products
- Portfolio diversification within the debt allocation
However, investors in higher tax slabs should always evaluate post-tax returns and avoid treating corporate bond funds as FD replacements.
In summary, while tax efficiency has reduced compared to earlier years, corporate bond mutual funds remain relevant for disciplined investors with a 2–4 year investment horizon.
Risks to Be Aware Of
While corporate bond funds are considered relatively stable, investors should be mindful of the following risks:
- Credit risk: The issuer may default or face a downgrade
- Interest rate risk: Bond prices can fall when interest rates rise
- Liquidity risk: Certain bonds may become difficult to sell during stressed market conditions
Choosing funds with strong credit discipline, diversified portfolios, and experienced fund management helps reduce these risks.
A Real-World Example: Corporate Bond Fund vs Fixed Deposit
Consider an investor in the 30% tax bracket choosing between a corporate bond fund and a bank fixed deposit:
- Corporate bond fund return: 7.5% per annum
- Bank FD return: 6.5% per annum
Both are taxed at slab rates. Even after taxation, the corporate bond fund may still offer better flexibility, daily liquidity, and portfolio diversification compared to an FD — provided the investment is held for the intended medium-term horizon and not treated as short-term parking.
This is why corporate bond funds work best as planned allocations, not substitutes for savings accounts.
Common Mistakes Investors Make in Corporate Bond Funds
Despite being relatively stable, investors often make avoidable mistakes:
- Chasing the highest YTM without understanding the underlying credit risk
- Ignoring credit quality and issuer concentration in the portfolio
- Using corporate bond funds as short-term parking tools, which exposes them to interest rate volatility
Avoiding these mistakes goes a long way in achieving predictable outcomes from corporate bond investments.
Who Should Avoid Corporate Bond Mutual Funds?
Corporate bond mutual funds are not suitable for everyone. You should avoid or limit exposure if you:
- Need money in the short term (less than 12 months)
- Are uncomfortable with temporary NAV fluctuations
- Do not understand credit risk and interest rate risk
- Expect guaranteed or FD-like fixed returns
Investors looking for ultra-safe parking options may consider Liquid Funds or bank fixed deposits instead. Corporate bond funds work best when given time and chosen carefully.
How to Invest in Corporate Bond 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!
Frequently Asked Questions (FAQs)
1. Are corporate bond mutual funds safe?
A: Corporate bond mutual funds are relatively safer than Equity Funds as they invest in debt instruments. However, they are not risk-free and carry credit risk and interest rate risk depending on the quality and maturity of bonds held.
2. Are corporate bond funds better than fixed deposits?
A: Corporate bond funds do not offer guaranteed returns like fixed deposits. However, they provide higher return potential, better liquidity, and portfolio diversification. The choice depends on your risk tolerance and investment horizon.
3. How are corporate bond mutual funds taxed?
A: All gains from corporate bond mutual funds are taxed as per the investor’s income tax slab, regardless of how long the investment is held. There is no indexation benefit.
Final Thoughts
Corporate bond mutual funds work best when treated as medium-term allocation tools, not short-term parking instruments. When chosen carefully, they can bring stability, predictability, and better post-tax returns to your portfolio — especially in uncertain market environments.
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.
AMFI Registration No. 112358 | CIN: U74999MH2016PTC282153
Shepard Technologies Pvt. Ltd. (with ARN code 112358) makes no warranties or representations, express or implied, on products offered through the platform. It accepts no liability for any damages or losses, however caused, in connection with the use of, or on the reliance of its product or related services. Terms and conditions of the website are applicable.
©2026 Shepard Technologies Private Limited. All Rights Reserved
Research Highlights for Franklin India Corporate Debt Fund