+91-22-48913909Long Term Debt Funds - When Should You Invest?
Long term debt funds are a type of Debt Mutual Funds that invest in corporate Bonds and government securities (g-secs) that have a long-term maturity period. The average maturity of these funds is in excess of 3 years, most of the times. That is why, these funds are suitable for investors who wish to make a mid to long term Investment plan i.e., typically for 3-5 years or even more. Let's understand how long term debt funds works and what are the best long term bonds funds to invest in 2026.
Long Term Debt Funds - A Plan for Long Term Investment
Long term debt funds invest their major underlying asset in debt instruments like corporate Debentures, bonds and money market instruments & government securities with a higher maturity period. Investors should invest in long term debt funds if they have an investment time frame of more than 3 years. These funds generally come with lower risk compared to equity mutual funds but carry a certain level of credit and interest rate risk. This fund is suitable for investors who are willing to take on some level of risk in their investment.
Long-term debt funds are sensitive to changes in the interest rate and are more volatile than other categories of debt funds. The performance of these funds largely depends on the economy's interest rate cycle, with falling interest rates benefiting these funds the most. Interest rates and prices of the debt instruments have an inverse relationship, which means that they move in opposite directions. For instance, a falling interest rate is good for debt funds or bond funds. Long term income funds usually benefit when the interest rates are moving downwards. Moreover, during interest rate falls, the bond prices go up and this boost NAVs of the debt fund schemes.
In a falling interest rate scenario, the average maturities of such bonds can go up to around 7-10 years. When the interest rates rise, they stock up lower tenured securities and keep the Portfolio’s average maturity low.
It's important to consider economic factors, including inflation trends and monetary policy, when determining the right time to invest in long-term debt funds. Monitoring central Bank announcements, such as interest rate cuts or hikes, can provide insights into potential market shifts.
Mostly, it is advisable to invest in long term bond funds when the interest rates are expected to ease down because a decrease in the interest rates causes a rise in the prices of long-term securities. Investors who are comfortable with fluctuating interest rates in the market, should only prefer Investing in long term debt funds.
It’s also crucial to have a diversified portfolio. Relying heavily on long-term debt funds can expose your investment to Volatility if interest rates rise unexpectedly. A balanced mix of equities, short-term debt, and long-term debt ensures you are better protected in various market conditions.
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Returns and Risk
These funds are meant to give returns in excess of bank fixed deposits. One of the significant benefits of long-term debt funds is their potential to provide inflation-adjusted returns, making them an attractive choice for investors looking to preserve purchasing power over time. Furthermore, if held for more than three years, the returns are more tax efficient. But, on the risk side, these funds can get volatile when the interest rates suddenly change direction. In a sustained rising interest rate regime, these funds give modest returns as they cannot sell long-dated bonds and switch to shorter tenured scripts.
Additionally, investors need to be aware of the credit risk associated with these funds. While many long-term debt funds invest in highly rated securities, there can still be a risk of default if a corporate bond issuer faces financial trouble. Hence, investors should assess the credit profile of the fund before investing.
Impact of Inflation on Long Term Debt Funds
Inflation has a direct impact on the real returns of long-term debt funds. When inflation rises, the purchasing power of future cash flows from bonds decreases. This means that, even if your fund delivers nominal returns, the real returns (adjusted for inflation) could be lower. Investors should closely monitor inflation trends because a higher-than-expected inflation rate could erode the value of their long-term investments.
However, during periods of moderate inflation, long-term debt funds can still provide decent real returns, especially when paired with tax benefits from indexation.
Long Term Debt Funds Taxation
Tax implication on debt funds is computed in the following manner-
Short Term Capital Gains
If the holding period of a debt investment is less than 36 months, then it is classified as a short-term investment and these are taxed as per individual's tax slab.
Long Term Capital Gains
If the holding period of debt investment is more than 36 months, then it is classified as a long-term investment and is taxed at 20% with an indexation benefit.
| Capital Gains | Investment Holding Gains | Taxation |
|---|---|---|
| Short Term Capital Gains | Less than 36 months | As per individual's tax slab |
| Long Term Capital Gains | More than 36 months | 20% with indexation benefits |
The indexation benefit is a key advantage of holding debt funds for the long term. It allows investors to adjust the cost of their investment for inflation, thereby reducing the tax burden.
Ideal Investor Profile for Long Term Debt Funds
Long-term debt funds are suitable for:
- Investors with a moderate risk appetite: These funds are not risk-free but are less volatile compared to Equity Funds.
- Investors looking for stable returns over 3-5 years: Those who prefer a predictable return pattern and can handle interest rate fluctuations.
- Tax-conscious investors: Due to the tax benefits of indexation, these funds are more attractive than traditional fixed deposits for long-term holdings.
- Investors seeking an alternative to equity: Those who prefer debt over equities but want better returns than short-term debt funds.
How Interest Rate Cycles Affect Long Term Debt Funds
Interest rate cycles play a critical role in determining the performance of long-term debt funds. In a falling interest rate scenario, long-term debt funds typically perform well, as bond prices increase. Conversely, when interest rates are rising, long-term debt funds may underperform because bond prices tend to decrease.
It is crucial for investors to understand where the economy is in the interest rate cycle before committing to long-term debt funds. For instance, during an expansion phase in the economy where central banks may hike interest rates to curb inflation, long-term debt funds could see volatility.
How to Invest in Long Term Bond Funds?
Investors can invest in two ways— SIP or Lump sum. For average investors, SIP (Systematic Investment Plan) is the most viable option. It gives you a systematic option of investing monthly/quarterly/annually basis. In a lump sum, investors have to invest a considerable amount as a one-time down payment in the scheme. The minimum investment amount for a lump sum is INR 5000, whereas for a SIP it is INR 500.
SIP is an excellent way to mitigate market timing risks. By investing periodically, you benefit from rupee cost averaging, which can be especially helpful in a volatile interest rate environment. Lump sum investments are ideal for those with a large amount to invest upfront and who are confident in the market outlook for long-term interest rates.
Fund Selection Methodology used to find 10 funds
Best Long Term Bond Funds to Invest in 2026
Fund NAV Net Assets (Cr) Min Investment Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2025 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Bandhan Government Securities Fund - Investment Plan Growth ₹37.4292
↑ 0.01 ₹1,875 5,000 1,000 2.9 4.8 7.3 7.3 3.7 7.37% 11Y 5M 5D 27Y 5M 26D BNP Paribas Corporate Bond Fund Growth ₹29.4894
↑ 0.02 ₹270 5,000 300 2.6 3.4 6.1 7.5 8.3 7.2% 2Y 8M 5D 3Y 7M 13D ICICI Prudential Corporate Bond Fund Growth ₹31.9837
↑ 0.01 ₹30,202 5,000 100 2.4 3.1 6.1 7.3 8 7.35% 3Y 5M 23D 6Y 14D Franklin India Government Securities Fund Growth ₹61.5527
↑ 0.03 ₹149 10,000 500 2.3 2.4 6.1 6.1 5.5 7.21% 5Y 6M 17Y 10M 2D Franklin India Corporate Debt Fund Growth ₹106.771
↑ 0.04 ₹1,345 10,000 500 2.1 2.9 6 7.5 9.1 7.42% 1Y 11M 16D 4Y 29D Bandhan Corporate Bond Fund Growth ₹20.5297
↑ 0.01 ₹13,675 5,000 1,000 2.4 3.3 5.8 7 7.4 7.08% 2Y 10M 13D 4Y 5M 19D Nippon India Prime Debt Fund Growth ₹63.8684
↑ 0.03 ₹9,432 1,000 100 2.4 2.8 5.4 7.2 7.8 7.34% 2Y 11M 12D 3Y 9M 29D Kotak Corporate Bond Fund Standard Growth ₹4,013.39
↑ 2.04 ₹15,171 5,000 1,000 2.3 2.6 5.3 7.1 7.8 7.45% 2Y 11M 19D 4Y 9M 14D UTI Gilt Fund Growth ₹65.5791
↑ 0.00 ₹423 5,000 500 1.1 2.1 5.1 6.4 5.1 6.12% 3Y 1M 6D 7Y Aditya Birla Sun Life Corporate Bond Fund Growth ₹119.578
↑ 0.05 ₹23,623 1,000 100 2.3 2.5 5.1 7 7.4 7.34% 4Y 1M 6D 6Y 7M 28D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Sep 26 Research Highlights & Commentary of 10 Funds showcased
Commentary Bandhan Government Securities Fund - Investment Plan BNP Paribas Corporate Bond Fund ICICI Prudential Corporate Bond Fund Franklin India Government Securities Fund Franklin India Corporate Debt Fund Bandhan Corporate Bond Fund Nippon India Prime Debt Fund Kotak Corporate Bond Fund Standard UTI Gilt Fund Aditya Birla Sun Life Corporate Bond Fund Point 1 Lower mid AUM (₹1,875 Cr). Bottom quartile AUM (₹270 Cr). Highest AUM (₹30,202 Cr). Bottom quartile AUM (₹149 Cr). Lower mid AUM (₹1,345 Cr). Upper mid AUM (₹13,675 Cr). Upper mid AUM (₹9,432 Cr). Upper mid AUM (₹15,171 Cr). Bottom quartile AUM (₹423 Cr). Top quartile AUM (₹23,623 Cr). Point 2 Established history (17+ yrs). Established history (17+ yrs). Established history (17+ yrs). Established history (24+ yrs). Oldest track record among peers (29 yrs). Established history (10+ yrs). Established history (25+ yrs). Established history (18+ yrs). Established history (24+ yrs). Established history (29+ yrs). Point 3 Rating: 3★ (lower mid). Rating: 3★ (lower mid). Rating: 4★ (top quartile). Rating: 3★ (bottom quartile). Rating: 2★ (bottom quartile). Not Rated. Rating: 4★ (upper mid). Rating: 4★ (upper mid). Rating: 4★ (upper mid). Top rated. Point 4 Risk profile: Moderate. Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderate. Risk profile: Moderate. Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderately Low. Risk profile: Moderate. Risk profile: Moderately Low. Point 5 1Y return: 7.30% (top quartile). 1Y return: 6.14% (top quartile). 1Y return: 6.07% (upper mid). 1Y return: 6.06% (upper mid). 1Y return: 6.04% (upper mid). 1Y return: 5.76% (lower mid). 1Y return: 5.40% (lower mid). 1Y return: 5.27% (bottom quartile). 1Y return: 5.14% (bottom quartile). 1Y return: 5.11% (bottom quartile). Point 6 1M return: 0.12% (bottom quartile). 1M return: 0.38% (top quartile). 1M return: 0.26% (upper mid). 1M return: 0.19% (lower mid). 1M return: 0.44% (top quartile). 1M return: 0.26% (upper mid). 1M return: 0.24% (upper mid). 1M return: 0.19% (lower mid). 1M return: -0.37% (bottom quartile). 1M return: 0.04% (bottom quartile). Point 7 Sharpe: 0.09 (top quartile). Sharpe: 0.02 (upper mid). Sharpe: 0.12 (top quartile). Sharpe: -0.21 (lower mid). Sharpe: -0.05 (upper mid). Sharpe: -0.09 (upper mid). Sharpe: -0.27 (bottom quartile). Sharpe: -0.26 (lower mid). Sharpe: -0.35 (bottom quartile). Sharpe: -0.27 (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): 7.37% (upper mid). Yield to maturity (debt): 7.20% (bottom quartile). Yield to maturity (debt): 7.35% (upper mid). Yield to maturity (debt): 7.21% (lower mid). Yield to maturity (debt): 7.42% (top quartile). Yield to maturity (debt): 7.08% (bottom quartile). Yield to maturity (debt): 7.34% (upper mid). Yield to maturity (debt): 7.45% (top quartile). Yield to maturity (debt): 6.12% (bottom quartile). Yield to maturity (debt): 7.34% (lower mid). Point 10 Modified duration: 11.43 yrs (bottom quartile). Modified duration: 2.68 yrs (top quartile). Modified duration: 3.48 yrs (lower mid). Modified duration: 5.50 yrs (bottom quartile). Modified duration: 1.96 yrs (top quartile). Modified duration: 2.87 yrs (upper mid). Modified duration: 2.95 yrs (upper mid). Modified duration: 2.97 yrs (upper mid). Modified duration: 3.10 yrs (lower mid). Modified duration: 4.10 yrs (bottom quartile). Bandhan Government Securities Fund - Investment Plan
BNP Paribas Corporate Bond Fund
ICICI Prudential Corporate Bond Fund
Franklin India Government Securities Fund
Franklin India Corporate Debt Fund
Bandhan Corporate Bond Fund
Nippon India Prime Debt Fund
Kotak Corporate Bond Fund Standard
UTI Gilt Fund
Aditya Birla Sun Life Corporate Bond Fund
IDFC – GSF -IP is an open ended dedicated gilt scheme with an objective to generate optimal returns with high liquidity by investing in Government Securities.However there is no assurance that the investment objective of the scheme will be realized. Below is the key information for Bandhan Government Securities Fund - Investment Plan 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 (Erstwhile Franklin India Government Securities Fund - Long Term Plan) Aims to invest exclusively in government securities of Zero credit or default risk Research Highlights for Franklin India Government Securities Fund Below is the key information for Franklin India Government Securities Fund Returns up to 1 year are on (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. Research Highlights for Franklin India Corporate Debt Fund Below is the key information for Franklin India Corporate Debt Fund Returns up to 1 year are on The Fund seeks to provide steady income and capital appreciation by investing primarily in corporate debt securities across maturities and ratings. There is no assurance or guarantee that the objectives of the scheme will be realised. Research Highlights for Bandhan Corporate Bond Fund Below is the key information for Bandhan Corporate Bond Fund 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 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 UTI Gilt Advantage Fund- LTP) To generate credit risk-free return through investment in sovereign securities issued by the Central Government and / or a State Government and / or any security unconditionally guaranteed by the Central Government and / or a State Government for repayment of principal and interest. However there can be no assurance that the investment objective of the Scheme will be achieved. Research Highlights for UTI Gilt Fund Below is the key information for UTI Gilt Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Short Term Fund) An Open-ended income scheme with the objective to generate income and capital appreciation by investing 100% of the corpus in a diversified portfolio of debt and money market securities. Research Highlights for Aditya Birla Sun Life Corporate Bond Fund Below is the key information for Aditya Birla Sun Life Corporate Bond Fund Returns up to 1 year are on 1. Bandhan Government Securities Fund - Investment Plan
Bandhan Government Securities Fund - Investment Plan
Growth Launch Date 3 Dec 08 NAV (04 Sep 26) ₹37.4292 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹1,875 on 15 Jul 26 Category Debt - Government Bond AMC IDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 1.13 Sharpe Ratio 0.09 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.37% Effective Maturity 27 Years 5 Months 26 Days Modified Duration 11 Years 5 Months 5 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,116 31 Aug 23 ₹10,715 31 Aug 24 ₹11,871 31 Aug 25 ₹12,173 31 Aug 26 ₹13,241 Returns for Bandhan Government Securities Fund - Investment Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.1% 3 Month 2.9% 6 Month 4.8% 1 Year 7.3% 3 Year 7.3% 5 Year 5.7% 10 Year 15 Year Since launch 7.7% Historical performance (Yearly) on absolute basis
Year Returns 2025 3.7% 2024 10.6% 2023 6.8% 2022 1.4% 2021 2.1% 2020 13.7% 2019 13.3% 2018 7.8% 2017 3.1% 2016 13.9% Fund Manager information for Bandhan Government Securities Fund - Investment Plan
Name Since Tenure Suyash Choudhary 15 Oct 10 15.89 Yr. Brijesh Shah 10 Jun 24 2.22 Yr. Data below for Bandhan Government Securities Fund - Investment Plan as on 15 Jul 26
Asset Allocation
Asset Class Value Cash 3.24% Debt 96.76% Debt Sector Allocation
Sector Value Government 96.76% Cash Equivalent 3.24% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.24% Govt Stock 2055
Sovereign Bonds | -68% ₹1,267 Cr 128,400,000
↓ -4,500,000 7.3% Govt Stock 2053
Sovereign Bonds | -19% ₹357 Cr 36,000,000 7.36% Govt Stock 2052
Sovereign Bonds | -9% ₹164 Cr 16,400,000 6.9% Govt Stock 2065
Sovereign Bonds | -0% ₹2 Cr 200,000
↓ -1,500,000 Net Current Assets
Net Current Assets | -3% ₹54 Cr Triparty Repo Trp_170826
CBLO/Reverse Repo | -0% ₹6 Cr Cash Margin - Ccil
CBLO/Reverse Repo | -0% ₹0 Cr 2. BNP Paribas Corporate Bond Fund
BNP Paribas Corporate Bond Fund
Growth Launch Date 8 Nov 08 NAV (04 Sep 26) ₹29.4894 ↑ 0.02 (0.06 %) Net Assets (Cr) ₹270 on 31 Jul 26 Category Debt - Corporate Bond AMC BNP Paribas Asset Mgmt India Pvt. Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 0.58 Sharpe Ratio 0.02 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 7.2% Effective Maturity 3 Years 7 Months 13 Days Modified Duration 2 Years 8 Months 5 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,057 31 Aug 23 ₹10,717 31 Aug 24 ₹11,543 31 Aug 25 ₹12,550 31 Aug 26 ₹13,303 Returns for BNP Paribas Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.4% 3 Month 2.6% 6 Month 3.4% 1 Year 6.1% 3 Year 7.5% 5 Year 5.9% 10 Year 15 Year Since launch 6.3% Historical performance (Yearly) on absolute basis
Year Returns 2025 8.3% 2024 8.3% 2023 7% 2022 1.6% 2021 2.2% 2020 9.9% 2019 0.9% 2018 5.2% 2017 6.7% 2016 10.8% Fund Manager information for BNP Paribas Corporate Bond Fund
Name Since Tenure Gurvinder Wasan 21 Oct 24 1.78 Yr. Vikram Pamnani 11 Jul 24 2.06 Yr. Data below for BNP Paribas Corporate Bond Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 10.02% Equity 4.17% Debt 85.32% Other 0.48% Debt Sector Allocation
Sector Value Corporate 74.47% Government 10.86% Cash Equivalent 10.02% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Rec Limited
Debentures | -6% ₹16 Cr 1,600 Ntpc Limited
Debentures | -5% ₹15 Cr 150 6.68% Govt Stock 2040
Sovereign Bonds | -5% ₹13 Cr 1,300,010
↑ 500,000 Small Industries Development Bank Of India
Debentures | -4% ₹12 Cr 1,200 Hindustan Petroleum Corporation Limited
Debentures | -4% ₹10 Cr 100 Hindustan Petroleum Corporation Limited
Debentures | -4% ₹10 Cr 1,000 Indian Oil Corporation Limited
Debentures | -4% ₹10 Cr 1,000 LIC Housing Finance Ltd
Debentures | -4% ₹10 Cr 1,000 GAil (India) Limited
Debentures | -4% ₹10 Cr 100 Ultratech Cement Limited
Debentures | -4% ₹10 Cr 1,000 3. ICICI Prudential Corporate Bond Fund
ICICI Prudential Corporate Bond Fund
Growth Launch Date 11 Aug 09 NAV (04 Sep 26) ₹31.9837 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹30,202 on 31 Jul 26 Category Debt - Corporate Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.57 Sharpe Ratio 0.12 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.35% Effective Maturity 6 Years 14 Days Modified Duration 3 Years 5 Months 23 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,361 31 Aug 23 ₹11,137 31 Aug 24 ₹11,990 31 Aug 25 ₹12,969 31 Aug 26 ₹13,742 Returns for ICICI Prudential Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.3% 3 Month 2.4% 6 Month 3.1% 1 Year 6.1% 3 Year 7.3% 5 Year 6.6% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2025 8% 2024 8% 2023 7.6% 2022 4.5% 2021 4.1% 2020 10.4% 2019 9.9% 2018 6.4% 2017 6.3% 2016 9.8% Fund Manager information for ICICI Prudential Corporate Bond Fund
Name Since Tenure Manish Banthia 22 Jan 24 2.53 Yr. Ritesh Lunawat 22 Jan 24 2.53 Yr. Data below for ICICI Prudential Corporate Bond Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 8.72% Debt 90.95% Other 0.33% Debt Sector Allocation
Sector Value Corporate 65.72% Government 29% Cash Equivalent 4.95% Credit Quality
Rating Value AA 0.56% AAA 99.44% Top Securities Holdings / Portfolio
Name Holding Value Quantity LIC Housing Finance Ltd
Debentures | -5% ₹1,456 Cr 145,500 SIDDHIVINAYAK SECURITISATION TRUST
Unlisted bonds | -3% ₹995 Cr 1,000 SHIVSHAKTI SECURITISATION TRUST
Unlisted bonds | -3% ₹891 Cr 900 National Bank For Agriculture And Rural Development
Debentures | -2% ₹748 Cr 74,550 Small Industries Development Bank Of India
Debentures | -2% ₹739 Cr 74,433 6.9% Govt Stock 2065
Sovereign Bonds | -2% ₹706 Cr 75,938,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹686 Cr 68,500 7.34% Govt Stock 2064
Sovereign Bonds | -2% ₹507 Cr 51,474,000 Bajaj Finance Limited
Debentures | -2% ₹498 Cr 50,000 7.57% Madhyapradesh Sgs 2045
Sovereign Bonds | -2% ₹489 Cr 49,151,900 4. Franklin India Government Securities Fund
Franklin India Government Securities Fund
Growth Launch Date 7 Dec 01 NAV (04 Sep 26) ₹61.5527 ↑ 0.03 (0.05 %) Net Assets (Cr) ₹149 on 31 Jul 26 Category Debt - Government Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 1.14 Sharpe Ratio -0.22 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.21% Effective Maturity 17 Years 10 Months 2 Days Modified Duration 5 Years 6 Months Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,226 31 Aug 23 ₹10,701 31 Aug 24 ₹11,441 31 Aug 25 ₹11,941 31 Aug 26 ₹12,766 Returns for Franklin India Government Securities Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.2% 3 Month 2.3% 6 Month 2.4% 1 Year 6.1% 3 Year 6.1% 5 Year 4.9% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2025 5.5% 2024 7.3% 2023 5.5% 2022 2.5% 2021 2.1% 2020 8.5% 2019 8% 2018 4.3% 2017 0.1% 2016 15.7% Fund Manager information for Franklin India Government Securities Fund
Name Since Tenure Rahul Goswami 6 Oct 23 2.82 Yr. Anuj Tagra 7 Mar 24 2.4 Yr. Data below for Franklin India Government Securities Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 12.57% Debt 87.43% Debt Sector Allocation
Sector Value Government 87.43% Cash Equivalent 12.57% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Maharashtra SDL
Sovereign Bonds | -21% ₹31 Cr 3,000,000 Punjab (State Of) 7.02%
- | -14% ₹20 Cr 2,000,000 7.73% Andhra Sgs 2032
Sovereign Bonds | -11% ₹16 Cr 1,500,000 7.62% Punjab Sgs 2033
Sovereign Bonds | -10% ₹15 Cr 1,500,000 7.86% Haryana Sdl 2032
Sovereign Bonds | -7% ₹10 Cr 1,000,000 6.9% Govt Stock 2065
Sovereign Bonds | -7% ₹10 Cr 1,029,400 7.71% Govt Stock 2066
Sovereign Bonds | -6% ₹9 Cr 834,000
↑ 834,000 7.17% Rajasthan Sdl 2032
Sovereign Bonds | -3% ₹5 Cr 500,000 Kerala (Government of) 7.56%
- | -3% ₹5 Cr 510,200 Bihar State Development Loans
Sovereign Bonds | -2% ₹3 Cr 312,440 5. Franklin India Corporate Debt Fund
Franklin India Corporate Debt Fund
Growth Launch Date 23 Jun 97 NAV (04 Sep 26) ₹106.771 ↑ 0.04 (0.04 %) Net Assets (Cr) ₹1,345 on 31 Jul 26 Category Debt - Corporate Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆ Risk Moderate Expense Ratio 0.79 Sharpe Ratio -0.05 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 7.42% Effective Maturity 4 Years 29 Days Modified Duration 1 Year 11 Months 16 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,260 31 Aug 23 ₹10,868 31 Aug 24 ₹11,640 31 Aug 25 ₹12,734 31 Aug 26 ₹13,488 Returns for Franklin India Corporate Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.4% 3 Month 2.1% 6 Month 2.9% 1 Year 6% 3 Year 7.5% 5 Year 6.2% 10 Year 15 Year Since launch 8.4% Historical performance (Yearly) on absolute basis
Year Returns 2025 9.1% 2024 7.6% 2023 6.5% 2022 3.2% 2021 3.8% 2020 9% 2019 9.2% 2018 7.5% 2017 7.7% 2016 9% Fund Manager information for Franklin India Corporate Debt Fund
Name Since Tenure Rahul Goswami 6 Oct 23 2.82 Yr. Anuj Tagra 7 Mar 24 2.4 Yr. Chandni Gupta 7 Mar 24 2.4 Yr. Data below for Franklin India Corporate Debt Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 6.85% Debt 92.86% Other 0.29% Debt Sector Allocation
Sector Value Corporate 68.54% Government 24.32% Cash Equivalent 6.85% Credit Quality
Rating Value AA 7.1% AAA 92.9% Top Securities Holdings / Portfolio
Name Holding Value Quantity Small Industries Development Bank Of India
Debentures | -6% ₹80 Cr 7,500 National Bank For Agriculture And Rural Development
Debentures | -6% ₹78 Cr 7,500 Jamnagar Utilities & Power Private Limited
Debentures | -6% ₹76 Cr 7,500 Poonawalla Fincorp Limited
Debentures | -5% ₹61 Cr 5,950 Maharashtra SDL
Sovereign Bonds | -4% ₹57 Cr 5,500,000 RJ Corp Limited
Debentures | -4% ₹57 Cr 5,467 LIC Housing Finance Ltd
Debentures | -4% ₹56 Cr 5,500 Summit Digitel Infrastructure Limited
Debentures | -4% ₹51 Cr 5,000 Mahindra And Mahindra Financial Services Limited
Debentures | -4% ₹51 Cr 5,000 Embassy Office Parks Reit
Debentures | -4% ₹50 Cr 5,000 6. Bandhan Corporate Bond Fund
Bandhan Corporate Bond Fund
Growth Launch Date 12 Jan 16 NAV (04 Sep 26) ₹20.5297 ↑ 0.01 (0.05 %) Net Assets (Cr) ₹13,675 on 15 Jul 26 Category Debt - Corporate Bond AMC IDFC Asset Management Company Limited Rating Risk Moderate Expense Ratio 0.65 Sharpe Ratio -0.09 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.08% Effective Maturity 4 Years 5 Months 19 Days Modified Duration 2 Years 10 Months 13 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,182 31 Aug 23 ₹10,806 31 Aug 24 ₹11,594 31 Aug 25 ₹12,519 31 Aug 26 ₹13,231 Returns for Bandhan Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.3% 3 Month 2.4% 6 Month 3.3% 1 Year 5.8% 3 Year 7% 5 Year 5.8% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2025 7.4% 2024 7.7% 2023 6.8% 2022 2.6% 2021 3.7% 2020 11.6% 2019 8.5% 2018 6.3% 2017 6.2% 2016 Fund Manager information for Bandhan Corporate Bond Fund
Name Since Tenure Suyash Choudhary 28 Jul 21 5.1 Yr. Gautam Kaul 1 Dec 21 4.75 Yr. Brijesh Shah 10 Jun 24 2.22 Yr. Data below for Bandhan Corporate Bond Fund as on 15 Jul 26
Asset Allocation
Asset Class Value Cash 11.83% Debt 87.83% Other 0.34% Debt Sector Allocation
Sector Value Corporate 66.46% Government 27.28% Cash Equivalent 5.92% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reliance Industries Limited
Debentures | -4% ₹571 Cr 55,000,000 Reliance Industries Limited
Debentures | -4% ₹542 Cr 52,500,000 7.06% Govt Stock 2041
Sovereign Bonds | -3% ₹417 Cr 41,250,000 Larsen And Toubro Limited
Debentures | -3% ₹353 Cr 35,000,000 Ultratech Cement Limited
Debentures | -2% ₹321 Cr 32,000,000
↓ -500,000 Bajaj Finance Limited
Debentures | -2% ₹316 Cr 31,657,000 7.3% Govt Stock 2053
Sovereign Bonds | -2% ₹315 Cr 31,750,000
↓ -1,000,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹301 Cr 30,000,000 Bajaj Housing Finance Limited
Debentures | -2% ₹299 Cr 30,000,000
↑ 15,000,000 Bajaj Finance Limited
Debentures | -2% ₹297 Cr 30,000,000 7. Nippon India Prime Debt Fund
Nippon India Prime Debt Fund
Growth Launch Date 14 Sep 00 NAV (04 Sep 26) ₹63.8684 ↑ 0.03 (0.05 %) Net Assets (Cr) ₹9,432 on 31 Jul 26 Category Debt - Corporate Bond AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.71 Sharpe Ratio -0.27 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.34% Effective Maturity 3 Years 9 Months 29 Days Modified Duration 2 Years 11 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,352 31 Aug 23 ₹11,076 31 Aug 24 ₹11,946 31 Aug 25 ₹12,949 31 Aug 26 ₹13,634 Returns for Nippon India Prime Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.2% 3 Month 2.4% 6 Month 2.8% 1 Year 5.4% 3 Year 7.2% 5 Year 6.4% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2025 7.8% 2024 8.4% 2023 7.1% 2022 4.3% 2021 4.7% 2020 9.5% 2019 7.8% 2018 6.9% 2017 6.6% 2016 9.1% Fund Manager information for Nippon India Prime Debt Fund
Name Since Tenure Vivek Sharma 1 Feb 20 6.58 Yr. Kinjal Desai 25 May 18 8.27 Yr. Amber Singhania 11 Mar 26 0.47 Yr. Data below for Nippon India Prime Debt Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 10.15% Debt 89.54% Other 0.31% Debt Sector Allocation
Sector Value Corporate 66.1% Government 23.97% Cash Equivalent 9.63% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Debentures | -5% ₹451 Cr 45,000 6.94% Govt Stock 2036
Sovereign Bonds | -4% ₹329 Cr 32,500,000
↑ 10,000,000 Indian Railway Finance Corporation Limited
Debentures | -2% ₹222 Cr 2,158 SIDDHIVINAYAK SECURITISATION TRUST
Unlisted bonds | -2% ₹197 Cr 200 SHIVSHAKTI SECURITISATION TRUST
Unlisted bonds | -2% ₹196 Cr 200 Small Industries Development Bank Of India
Debentures | -2% ₹176 Cr 17,500 Rec Limited
Debentures | -2% ₹174 Cr 17,500 Knowledge Realty TRust
Debentures | -2% ₹160 Cr 16,000 Bajaj Housing Finance Limited
Debentures | -2% ₹153 Cr 15,000 Small Industries Development Bank Of India
Debentures | -2% ₹151 Cr 15,000 8. Kotak Corporate Bond Fund Standard
Kotak Corporate Bond Fund Standard
Growth Launch Date 21 Sep 07 NAV (04 Sep 26) ₹4,013.39 ↑ 2.04 (0.05 %) Net Assets (Cr) ₹15,171 on 31 Jul 26 Category Debt - Corporate Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.67 Sharpe Ratio -0.26 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.45% Effective Maturity 4 Years 9 Months 14 Days Modified Duration 2 Years 11 Months 19 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,295 31 Aug 23 ₹10,964 31 Aug 24 ₹11,817 31 Aug 25 ₹12,788 31 Aug 26 ₹13,453 Returns for Kotak Corporate Bond Fund Standard
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.2% 3 Month 2.3% 6 Month 2.6% 1 Year 5.3% 3 Year 7.1% 5 Year 6.1% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2025 7.8% 2024 8.3% 2023 6.9% 2022 3.7% 2021 3.8% 2020 9.7% 2019 9.6% 2018 7.5% 2017 6.9% 2016 9.4% Fund Manager information for Kotak Corporate Bond Fund Standard
Name Since Tenure Deepak Agrawal 7 Aug 26 0.07 Yr. Manu Sharma 7 Aug 26 0.07 Yr. Data below for Kotak Corporate Bond Fund Standard as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 2.92% Debt 96.73% Other 0.35% Debt Sector Allocation
Sector Value Corporate 71.54% Government 25.5% Cash Equivalent 2.6% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Debentures | -3% ₹526 Cr 52,500 Karnataka (Government of) 0.0756%
- | -3% ₹462 Cr 45,700,000 6.9% Govt Stock 2065
Sovereign Bonds | -3% ₹449 Cr 48,300,000 7.71% Govt Stock 2066
Sovereign Bonds | -3% ₹445 Cr 43,000,000 Bajaj Finance Limited
Debentures | -3% ₹435 Cr 43,500 Karnataka State Development Loans
Sovereign Bonds | -3% ₹424 Cr 42,000,000 Power Finance Corporation Limited
Debentures | -3% ₹399 Cr 40,000 Small Industries Development Bank Of India
Debentures | -2% ₹351 Cr 35,000 Mahindra And Mahindra Financial Services Limited
Debentures | -2% ₹302 Cr 30,000 Knowledge Realty TRust
Debentures | -2% ₹299 Cr 30,000 9. UTI Gilt Fund
UTI Gilt Fund
Growth Launch Date 21 Jan 02 NAV (04 Sep 26) ₹65.5791 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹423 on 31 Jul 26 Category Debt - Government Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.92 Sharpe Ratio -0.35 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.12% Effective Maturity 7 Years Modified Duration 3 Years 1 Month 6 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,179 31 Aug 23 ₹10,845 31 Aug 24 ₹11,785 31 Aug 25 ₹12,305 31 Aug 26 ₹13,078 Returns for UTI Gilt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month -0.4% 3 Month 1.1% 6 Month 2.1% 1 Year 5.1% 3 Year 6.4% 5 Year 5.4% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2025 5.1% 2024 8.9% 2023 6.7% 2022 2.9% 2021 2.3% 2020 10.3% 2019 11.8% 2018 6.3% 2017 4.3% 2016 15.5% Fund Manager information for UTI Gilt Fund
Name Since Tenure Pankaj Pathak 8 Apr 25 1.4 Yr. Data below for UTI Gilt Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 6.19% Debt 93.81% Debt Sector Allocation
Sector Value Government 93.81% Cash Equivalent 6.19% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.9% Govt Stock 2065
Sovereign Bonds | -30% ₹126 Cr 1,350,000,000
↑ 750,000,000 6.79% Govt Stock 2027
Sovereign Bonds | -24% ₹101 Cr 1,000,000,000
↑ 500,000,000 Day Tbill
Sovereign Bonds | -19% ₹79 Cr 816,050,000
↓ -850,000,000 7.24% Govt Stock 2055
Sovereign Bonds | -6% ₹25 Cr 250,000,000
↑ 250,000,000 6.48% Govt Stock 2035
Sovereign Bonds | -6% ₹25 Cr 250,000,000 Chhattisgarh (Government of) 7.37%
- | -4% ₹15 Cr 150,000,000 7.18% Tamilnadu SDL 2027
Sovereign Bonds | -4% ₹15 Cr 150,000,000 7.3% Uttarakhand Sgs 2032
Sovereign Bonds | -2% ₹9 Cr 85,730,000 7.77% Andhra Sdl 2028
Sovereign Bonds | -1% ₹5 Cr 50,000,000 Net Current Assets
Net Current Assets | -6% ₹25 Cr 10. Aditya Birla Sun Life Corporate Bond Fund
Aditya Birla Sun Life Corporate Bond Fund
Growth Launch Date 3 Mar 97 NAV (04 Sep 26) ₹119.578 ↑ 0.05 (0.04 %) Net Assets (Cr) ₹23,623 on 31 Jul 26 Category Debt - Corporate Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.52 Sharpe Ratio -0.27 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.34% Effective Maturity 6 Years 7 Months 28 Days Modified Duration 4 Years 1 Month 6 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 21 ₹10,000 31 Aug 22 ₹10,321 31 Aug 23 ₹11,032 31 Aug 24 ₹11,920 31 Aug 25 ₹12,840 31 Aug 26 ₹13,510 Returns for Aditya Birla Sun Life Corporate Bond Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0% 3 Month 2.3% 6 Month 2.5% 1 Year 5.1% 3 Year 7% 5 Year 6.2% 10 Year 15 Year Since launch 8.8% Historical performance (Yearly) on absolute basis
Year Returns 2025 7.4% 2024 8.5% 2023 7.3% 2022 4.1% 2021 4% 2020 11.9% 2019 9.6% 2018 7% 2017 6.5% 2016 10.2% Fund Manager information for Aditya Birla Sun Life Corporate Bond Fund
Name Since Tenure Kaustubh Gupta 12 Apr 21 5.39 Yr. Data below for Aditya Birla Sun Life Corporate Bond Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Cash 3.49% Debt 96.51% Debt Sector Allocation
Sector Value Corporate 58.49% Government 38.01% Cash Equivalent 3.49% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.68% Govt Stock 2040
Sovereign Bonds | -7% ₹1,635 Cr 167,500,000
↑ 6,000,000 6.94% Govt Stock 2036
Sovereign Bonds | -6% ₹1,461 Cr 144,276,100
↓ -11,500,000 National Bank For Agriculture And Rural Development
Debentures | -5% ₹1,103 Cr 110,000
↓ -2,000 Bharti Telecom Limited
Debentures | -3% ₹670 Cr 67,500 Jamnagar Utilities & Power Private Limited
Debentures | -3% ₹584 Cr 59,000 6.9% Govt Stock 2065
Sovereign Bonds | -2% ₹526 Cr 56,572,800
↓ -4,000,000 Bajaj Housing Finance Limited
Debentures | -2% ₹499 Cr 50,000 6.48% Govt Stock 2035
Sovereign Bonds | -2% ₹452 Cr 46,035,600
↓ -2,500,000 Small Industries Development Bank Of India
Debentures | -2% ₹445 Cr 44,546
↑ 39,546 Bharti Telecom Limited
Debentures | -2% ₹412 Cr 41,400
Comparing Long Term Debt Funds with Other Fixed-Income Instruments
It’s helpful to compare long-term debt funds with other investment options like bank fixed deposits (FDs), public provident funds (PPF), and bonds. While long-term debt funds offer better liquidity and tax efficiency (especially after 3 years), they come with market risks, which instruments like FDs do not. PPF, on the other hand, has a fixed interest rate and offers government backing but lacks liquidity, as it comes with a long lock-in period.
Corporate bonds may offer higher yields but come with credit risks, especially for lower-rated companies. Long-term debt funds, in contrast, give exposure to a diversified pool of bonds, spreading out risk.
Role of Credit Rating in Long Term Debt Funds
Before investing in long-term debt funds, it is crucial to check the credit quality of the bonds within the fund's portfolio. Debt instruments are assigned credit ratings, which indicate the issuer’s ability to meet their financial obligations. Funds with a portfolio of AAA-rated bonds are considered safer but might offer slightly lower returns compared to funds with lower-rated bonds.
However, investors should avoid funds with heavy exposure to low-rated bonds, unless they have a higher risk tolerance, as defaults can erode returns significantly.
Debt Fund Credit Risks vs. Sovereign Bonds
Sovereign bonds, especially government securities (G-Secs), are seen as one of the safest forms of investment as they are backed by the government. However, corporate bonds, a common component of long-term debt funds, carry credit risks. These risks arise when a corporation is unable to repay its debt obligations, which can affect the returns of the fund. Therefore, investors must assess the credit ratings of the bonds held by the debt fund and weigh their risk accordingly.
Duration vs. Yield: Key Concepts to Understand
Duration is a measure of a bond fund's sensitivity to interest rate changes. Long-term debt funds tend to have higher durations because their underlying bonds have longer maturity periods. A higher duration means that the fund's NAV will be more sensitive to changes in interest rates.
Yield is another important metric, representing the income generated by the fund's underlying bonds as a percentage of the NAV. In long-term debt funds, yield tends to be lower in high-quality bonds but rises with riskier bonds.
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Research Highlights for Bandhan Government Securities Fund - Investment Plan