fincash logo SOLUTIONS
EXPLORE FUNDS
CALCULATORS
fincash number+91-22-48913909
Long Term Debt Funds | Best Long Term Debt Funds - Fincash.com

Fincash » Mutual Funds » Long Term Debt Funds

Long Term Debt Funds - When Should You Invest?

Updated on February 9, 2025 , 11363 views

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 2025.

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

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.

Ready to Invest?
Talk to our investment specialist
Disclaimer:
By submitting this form I authorize Fincash.com to call/SMS/email me about its products and I accept the terms of Privacy Policy and Terms & Conditions.

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.

Best Long Term Bond Funds to Invest in 2025

FundNAVNet Assets (Cr)Min InvestmentMin SIP Investment3 MO (%)6 MO (%)1 YR (%)3 YR (%)2024 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Axis Gilt Fund Growth ₹24.6997
↑ 0.01
₹934 5,000 1,000 1.33.78.76.6107.08%10Y 7M 6D27Y 3M 7D
HDFC Corporate Bond Fund Growth ₹31.4212
↑ 0.01
₹32,374 5,000 300 1.748.46.58.67.47%3Y 10M 17D6Y 25D
Aditya Birla Sun Life Corporate Bond Fund Growth ₹109.011
↑ 0.05
₹24,979 1,000 100 1.848.46.88.57.51%3Y 6M 29D5Y 3M 11D
HDFC Gilt Fund Growth ₹53.593
↑ 0.03
₹2,882 5,000 300 1.63.78.46.18.77.02%8Y 2M 5D16Y 2M 26D
Nippon India Prime Debt Fund Growth ₹57.7846
↑ 0.02
₹6,566 1,000 100 1.748.36.78.47.42%3Y 10M 13D5Y 1M 13D
BNP Paribas Corporate Bond Fund Growth ₹26.4257
↓ 0.00
₹214 5,000 300 1.84.18.25.98.37.35%3Y 7M 17D4Y 11M 23D
Kotak Corporate Bond Fund Standard Growth ₹3,638.33
↑ 1.64
₹14,150 5,000 1,000 1.73.98.26.48.37.49%3Y 3M 22D5Y 29D
ICICI Prudential Gilt Fund Growth ₹98.9931
↑ 0.09
₹6,811 5,000 1,000 1.83.78.27.28.26.9%3Y 8M 19D6Y 6M 18D
ICICI Prudential Corporate Bond Fund Growth ₹28.7809
↑ 0.01
₹29,118 5,000 100 1.83.88.16.987.61%2Y 4M 24D3Y 10M 17D
SBI Magnum Gilt Fund Growth ₹63.9298
↑ 0.03
₹11,265 5,000 500 1.23.287.28.96.88%9Y 10M 10D24Y 6M 14D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 11 Feb 25

1. Axis Gilt Fund

(Erstwhile Axis Constant Maturity 10 Year Fund)

To generate returns similar to that of 10 year government bonds.

Axis Gilt Fund is a Debt - Government Bond fund was launched on 23 Jan 12. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.2% since its launch.  Ranked 16 in Government Bond category.  Return for 2024 was 10% , 2023 was 7.1% and 2022 was 2.4% .

Below is the key information for Axis Gilt Fund

Axis Gilt Fund
Growth
Launch Date 23 Jan 12
NAV (11 Feb 25) ₹24.6997 ↑ 0.01   (0.03 %)
Net Assets (Cr) ₹934 on 31 Dec 24
Category Debt - Government Bond
AMC Axis Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 0.79
Sharpe Ratio 1.2
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 27 Years 3 Months 7 Days
Modified Duration 10 Years 7 Months 6 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹11,277
31 Jan 22₹11,548
31 Jan 23₹11,858
31 Jan 24₹12,755
31 Jan 25₹13,988

Axis Gilt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Axis Gilt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.6%
3 Month 1.3%
6 Month 3.7%
1 Year 8.7%
3 Year 6.6%
5 Year 6.6%
10 Year
15 Year
Since launch 7.2%
Historical performance (Yearly) on absolute basis
YearReturns
2024 10%
2023 7.1%
2022 2.4%
2021 2.4%
2020 13.1%
2019 12%
2018 5.3%
2017 1.4%
2016 13.7%
2015 6.3%
Fund Manager information for Axis Gilt Fund
NameSinceTenure
Devang Shah5 Nov 1212.25 Yr.
Sachin Jain1 Feb 232 Yr.

Data below for Axis Gilt Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash5.39%
Debt94.61%
Debt Sector Allocation
SectorValue
Government94.61%
Cash Equivalent5.39%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.34% Govt Stock 2064
Sovereign Bonds | -
43%₹402 Cr38,993,200
↑ 5,000,000
7.09% Govt Stock 2054
Sovereign Bonds | -
12%₹115 Cr11,500,000
↓ -2,500,000
7.18% Govt Stock 2033
Sovereign Bonds | -
12%₹110 Cr10,800,000
7.3% Govt Stock 2053
Sovereign Bonds | -
7%₹67 Cr6,500,000
7.1% Govt Stock 2034
Sovereign Bonds | -
7%₹61 Cr6,000,000
↑ 1,000,000
6.79% Govt Stock 2034
Sovereign Bonds | -
5%₹50 Cr5,000,000
↓ -2,000,000
7.09% Govt Stock 2074
Sovereign Bonds | -
4%₹41 Cr4,143,000
6.92% Govt Stock 2039
Sovereign Bonds | -
1%₹12 Cr1,200,000
↓ -2,500,000
Maharashtra (Government of) 7.45%
- | -
1%₹11 Cr1,083,700
7.46% Govt Stock 2073
Sovereign Bonds | -
1%₹5 Cr500,000

2. HDFC Corporate Bond Fund

(Erstwhile HDFC Medium Term Opportunities Fund)

To generate regular income through investments in Debt/ Money Market Instruments and Government Securities with maturities not exceeding 60 months.

HDFC Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 29 Jun 10. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 8.1% since its launch.  Ranked 2 in Corporate Bond category.  Return for 2024 was 8.6% , 2023 was 7.2% and 2022 was 3.3% .

Below is the key information for HDFC Corporate Bond Fund

HDFC Corporate Bond Fund
Growth
Launch Date 29 Jun 10
NAV (11 Feb 25) ₹31.4212 ↑ 0.01   (0.02 %)
Net Assets (Cr) ₹32,374 on 31 Dec 24
Category Debt - Corporate Bond
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.59
Sharpe Ratio 2.21
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 7.47%
Effective Maturity 6 Years 25 Days
Modified Duration 3 Years 10 Months 17 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹11,091
31 Jan 22₹11,543
31 Jan 23₹11,958
31 Jan 24₹12,850
31 Jan 25₹13,953

HDFC Corporate Bond Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for HDFC Corporate Bond Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.7%
6 Month 4%
1 Year 8.4%
3 Year 6.5%
5 Year 6.7%
10 Year
15 Year
Since launch 8.1%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.6%
2023 7.2%
2022 3.3%
2021 3.9%
2020 11.8%
2019 10.3%
2018 6.5%
2017 6.5%
2016 10.6%
2015 8.6%
Fund Manager information for HDFC Corporate Bond Fund
NameSinceTenure
Anupam Joshi27 Oct 159.27 Yr.
Dhruv Muchhal22 Jun 231.62 Yr.

Data below for HDFC Corporate Bond Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash2.67%
Debt97.06%
Other0.27%
Debt Sector Allocation
SectorValue
Corporate61.58%
Government35.48%
Cash Equivalent2.67%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.23% Govt Stock 2039
Sovereign Bonds | -
8%₹2,519 Cr245,500,000
↓ -62,000,000
7.93% Govt Stock 2033
Sovereign Bonds | -
4%₹1,286 Cr125,000,000
7.53% Govt Stock 2034
Sovereign Bonds | -
3%₹817 Cr81,000,000
↑ 2,500,000
State Bank Of India
Debentures | -
2%₹796 Cr800
Mangalore Refinery And Petrochemicals Limited
Debentures | -
2%₹559 Cr5,670
HDFC Bank Limited
Debentures | -
2%₹509 Cr50,000
Bajaj Housing Finance Limited
Debentures | -
2%₹503 Cr50,000
Ncd Small Industries Development Bank Of India
Debentures | -
2%₹500 Cr50,000
↑ 50,000
LIC Housing Finance Limited
Debentures | -
2%₹499 Cr5,000
Reliance Industries Limited
Debentures | -
2%₹498 Cr4,750
↓ -250

3. Aditya Birla Sun Life Corporate Bond Fund

(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.

Aditya Birla Sun Life Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 3 Mar 97. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 8.9% since its launch.  Ranked 1 in Corporate Bond category.  Return for 2024 was 8.5% , 2023 was 7.3% and 2022 was 4.1% .

Below is the key information for Aditya Birla Sun Life Corporate Bond Fund

Aditya Birla Sun Life Corporate Bond Fund
Growth
Launch Date 3 Mar 97
NAV (11 Feb 25) ₹109.011 ↑ 0.05   (0.05 %)
Net Assets (Cr) ₹24,979 on 31 Dec 24
Category Debt - Corporate Bond
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.5
Sharpe Ratio 1.86
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 7.51%
Effective Maturity 5 Years 3 Months 11 Days
Modified Duration 3 Years 6 Months 29 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹11,088
31 Jan 22₹11,577
31 Jan 23₹12,077
31 Jan 24₹12,984
31 Jan 25₹14,097

Aditya Birla Sun Life Corporate Bond Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Aditya Birla Sun Life Corporate Bond Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.8%
6 Month 4%
1 Year 8.4%
3 Year 6.8%
5 Year 7%
10 Year
15 Year
Since launch 8.9%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 8.9%
Fund Manager information for Aditya Birla Sun Life Corporate Bond Fund
NameSinceTenure
Kaustubh Gupta12 Apr 213.81 Yr.

Data below for Aditya Birla Sun Life Corporate Bond Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash3.95%
Debt95.79%
Other0.26%
Debt Sector Allocation
SectorValue
Corporate57.98%
Government37.61%
Cash Equivalent3.95%
Securitized0.2%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
11%₹2,663 Cr261,000,000
7.18% Govt Stock 2037
Sovereign Bonds | -
6%₹1,472 Cr144,324,100
7.1% Govt Stock 2034
Sovereign Bonds | -
6%₹1,435 Cr141,161,700
↑ 15,500,000
Small Industries Development Bank Of India
Debentures | -
3%₹769 Cr77,050
7.53% Govt Stock 2034
Sovereign Bonds | -
3%₹702 Cr69,637,700
Small Industries Development Bank Of India
Debentures | -
2%₹598 Cr6,000
Bajaj Housing Finance Limited
Debentures | -
2%₹558 Cr55,000
Bajaj Finance Limited
Debentures | -
2%₹452 Cr45,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹437 Cr43,500
Ncd Small Industries Development Bank Of India
Debentures | -
2%₹400 Cr40,000
↑ 40,000

4. HDFC Gilt Fund

(Erstwhile HDFC Gilt Fund - Long Term Plan)

The scheme seeks to generate credit risk - free returns through investments in sovereign securities issued by the Central Government and / or State Governments.

HDFC Gilt Fund is a Debt - Government Bond fund was launched on 25 Jul 01. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.4% since its launch.  Ranked 7 in Government Bond category.  Return for 2024 was 8.7% , 2023 was 7.1% and 2022 was 1.7% .

Below is the key information for HDFC Gilt Fund

HDFC Gilt Fund
Growth
Launch Date 25 Jul 01
NAV (11 Feb 25) ₹53.593 ↑ 0.03   (0.06 %)
Net Assets (Cr) ₹2,882 on 31 Dec 24
Category Debt - Government Bond
AMC HDFC Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 0.88
Sharpe Ratio 0.83
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 7.02%
Effective Maturity 16 Years 2 Months 26 Days
Modified Duration 8 Years 2 Months 5 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹10,985
31 Jan 22₹11,227
31 Jan 23₹11,499
31 Jan 24₹12,355
31 Jan 25₹13,434

HDFC Gilt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹197,169.
Net Profit of ₹17,169
Invest Now

Returns for HDFC Gilt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.6%
6 Month 3.7%
1 Year 8.4%
3 Year 6.1%
5 Year 5.8%
10 Year
15 Year
Since launch 7.4%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.7%
2023 7.1%
2022 1.7%
2021 2.2%
2020 10.7%
2019 8.6%
2018 5.4%
2017 1.8%
2016 16.6%
2015 5.9%
Fund Manager information for HDFC Gilt Fund
NameSinceTenure
Anil Bamboli1 Sep 0717.43 Yr.
Dhruv Muchhal22 Jun 231.62 Yr.

Data below for HDFC Gilt Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash2.45%
Debt97.55%
Debt Sector Allocation
SectorValue
Government97.55%
Cash Equivalent2.45%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
20%₹592 Cr58,000,000
7.3% Govt Stock 2053
Sovereign Bonds | -
16%₹477 Cr46,500,000
6.79% Govt Stock 2034
Sovereign Bonds | -
9%₹275 Cr27,583,400
↑ 7,500,000
7.26% Govt Stock 2033
Sovereign Bonds | -
8%₹246 Cr24,000,000
7.34% Govt Stock 2064
Sovereign Bonds | -
8%₹230 Cr22,370,000
7.1% Govt Stock 2034
Sovereign Bonds | -
7%₹193 Cr19,000,000
7.26% Govt Stock 2032
Sovereign Bonds | -
6%₹174 Cr17,000,000
7.17% Govt Stock 2030
Sovereign Bonds | -
5%₹137 Cr13,500,000
7.18% Govt Stock 2037
Sovereign Bonds | -
4%₹122 Cr12,000,000
7.09% Govt Stock 2054
Sovereign Bonds | -
3%₹92 Cr9,170,000

5. Nippon India Prime Debt Fund

(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.

Nippon India Prime Debt Fund is a Debt - Corporate Bond fund was launched on 14 Sep 00. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.5% since its launch.  Ranked 20 in Corporate Bond category.  Return for 2024 was 8.4% , 2023 was 7.1% and 2022 was 4.3% .

Below is the key information for Nippon India Prime Debt Fund

Nippon India Prime Debt Fund
Growth
Launch Date 14 Sep 00
NAV (11 Feb 25) ₹57.7846 ↑ 0.02   (0.04 %)
Net Assets (Cr) ₹6,566 on 31 Dec 24
Category Debt - Corporate Bond
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately Low
Expense Ratio 0.69
Sharpe Ratio 1.75
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 7.42%
Effective Maturity 5 Years 1 Month 13 Days
Modified Duration 3 Years 10 Months 13 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹10,837
31 Jan 22₹11,389
31 Jan 23₹11,905
31 Jan 24₹12,775
31 Jan 25₹13,849

Nippon India Prime Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Nippon India Prime Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.7%
6 Month 4%
1 Year 8.3%
3 Year 6.7%
5 Year 6.6%
10 Year
15 Year
Since launch 7.5%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 8.7%
Fund Manager information for Nippon India Prime Debt Fund
NameSinceTenure
Vivek Sharma1 Feb 205.01 Yr.
Kinjal Desai25 May 186.7 Yr.

Data below for Nippon India Prime Debt Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash3.5%
Debt96.22%
Other0.28%
Debt Sector Allocation
SectorValue
Corporate63.97%
Government32.25%
Cash Equivalent3.5%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.1% Govt Stock 2034
Sovereign Bonds | -
9%₹524 Cr51,500,000
↓ -10,000,000
7.32% Govt Stock 2030
Sovereign Bonds | -
3%₹210 Cr20,500,000
7.18% Govt Stock 2037
Sovereign Bonds | -
3%₹189 Cr18,500,000
6.79% Govt Stock 2034
Sovereign Bonds | -
3%₹170 Cr17,000,000
INDIA UNIVERSAL TRUST AL2
Unlisted bonds | -
2%₹150 Cr150
INDIA UNIVERSAL TRUST AL1
Unlisted bonds | -
2%₹148 Cr150
Bajaj Housing Finance Limited
Debentures | -
2%₹143 Cr14,000
LIC Housing Finance Limited
Debentures | -
2%₹135 Cr13,500
Small Industries Development Bank Of India
Debentures | -
2%₹129 Cr13,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹128 Cr12,800

6. BNP Paribas Corporate Bond Fund

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.

BNP Paribas Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 8 Nov 08. It is a fund with Moderate risk and has given a CAGR/Annualized return of 6.2% since its launch.  Ranked 24 in Corporate Bond category.  Return for 2024 was 8.3% , 2023 was 7% and 2022 was 1.6% .

Below is the key information for BNP Paribas Corporate Bond Fund

BNP Paribas Corporate Bond Fund
Growth
Launch Date 8 Nov 08
NAV (11 Feb 25) ₹26.4257 ↓ 0.00   (0.00 %)
Net Assets (Cr) ₹214 on 31 Dec 24
Category Debt - Corporate Bond
AMC BNP Paribas Asset Mgmt India Pvt. Ltd
Rating
Risk Moderate
Expense Ratio 0.56
Sharpe Ratio 1.33
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 7.35%
Effective Maturity 4 Years 11 Months 23 Days
Modified Duration 3 Years 7 Months 17 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹10,898
31 Jan 22₹11,117
31 Jan 23₹11,352
31 Jan 24₹12,173
31 Jan 25₹13,206

BNP Paribas Corporate Bond Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹197,169.
Net Profit of ₹17,169
Invest Now

Returns for BNP Paribas Corporate Bond Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.8%
6 Month 4.1%
1 Year 8.2%
3 Year 5.9%
5 Year 5.6%
10 Year
15 Year
Since launch 6.2%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 7.2%
Fund Manager information for BNP Paribas Corporate Bond Fund
NameSinceTenure
Gurvinder Wasan21 Oct 240.28 Yr.
Vikram Pamnani10 Jul 240.56 Yr.

Data below for BNP Paribas Corporate Bond Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash6.66%
Debt93.08%
Other0.26%
Debt Sector Allocation
SectorValue
Corporate50.34%
Government40.39%
Cash Equivalent6.66%
Securitized2.36%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.1% Govt Stock 2034
Sovereign Bonds | -
9%₹20 Cr2,000,000
7.32% Govt Stock 2030
Sovereign Bonds | -
7%₹15 Cr1,500,000
Rec Limited
Debentures | -
6%₹12 Cr1,200
Indian Railway Finance Corporation Limited
Debentures | -
5%₹11 Cr110
Export Import Bank Of India
Debentures | -
5%₹10 Cr100
Hindustan Petroleum Corporation Limited
Debentures | -
5%₹10 Cr100
Power Finance Corporation Ltd.
Debentures | -
5%₹10 Cr1,000
Sundaram Bnp Paribas Home Finance Limited
Debentures | -
5%₹10 Cr1,000
Tata Capital Limited
Debentures | -
5%₹10 Cr1,000
GAil (India) Limited
Debentures | -
5%₹10 Cr100

7. Kotak Corporate Bond Fund Standard

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.

Kotak Corporate Bond Fund Standard is a Debt - Corporate Bond fund was launched on 21 Sep 07. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.7% since its launch.  Ranked 15 in Corporate Bond category.  Return for 2024 was 8.3% , 2023 was 6.9% and 2022 was 3.7% .

Below is the key information for Kotak Corporate Bond Fund Standard

Kotak Corporate Bond Fund Standard
Growth
Launch Date 21 Sep 07
NAV (11 Feb 25) ₹3,638.33 ↑ 1.64   (0.05 %)
Net Assets (Cr) ₹14,150 on 31 Dec 24
Category Debt - Corporate Bond
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.67
Sharpe Ratio 1.66
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 7.49%
Effective Maturity 5 Years 29 Days
Modified Duration 3 Years 3 Months 22 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹10,861
31 Jan 22₹11,316
31 Jan 23₹11,743
31 Jan 24₹12,588
31 Jan 25₹13,632

Kotak Corporate Bond Fund Standard SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Kotak Corporate Bond Fund Standard

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.7%
6 Month 3.9%
1 Year 8.2%
3 Year 6.4%
5 Year 6.3%
10 Year
15 Year
Since launch 7.7%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 8.8%
Fund Manager information for Kotak Corporate Bond Fund Standard
NameSinceTenure
Deepak Agrawal1 Feb 1510.01 Yr.
Manu Sharma1 Nov 222.25 Yr.

Data below for Kotak Corporate Bond Fund Standard as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash3.63%
Debt96.1%
Other0.27%
Debt Sector Allocation
SectorValue
Corporate57.46%
Government38.65%
Cash Equivalent3.63%
Credit Quality
RatingValue
AA0.35%
AAA99.65%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.18% Govt Stock 2033
Sovereign Bonds | -
13%₹1,867 Cr182,935,080
7.1% Govt Stock 2034
Sovereign Bonds | -
7%₹961 Cr94,470,308
↑ 6,000,000
Jamnagar Utilities & Power Private Limited
Debentures | -
4%₹582 Cr5,950
7.53% Govt Stock 2034
Sovereign Bonds | -
4%₹529 Cr52,500,000
National Bank For Agriculture And Rural Development
Debentures | -
3%₹480 Cr47,800
LIC Housing Finance Limited
Debentures | -
3%₹458 Cr4,550
Bajaj Finance Limited
Debentures | -
3%₹436 Cr43,500
National Bank For Agriculture And Rural Development
Debentures | -
3%₹419 Cr42,000
7.93% Govt Stock 2033
Sovereign Bonds | -
3%₹379 Cr36,812,177
HDFC Bank Limited
Debentures | -
3%₹373 Cr37,000

8. ICICI Prudential Gilt Fund

(Erstwhile ICICI Prudential Long Term Gilt Fund)

To generate income through investment in Gilts of various maturities.

ICICI Prudential Gilt Fund is a Debt - Government Bond fund was launched on 19 Aug 99. It is a fund with Moderate risk and has given a CAGR/Annualized return of 9.4% since its launch.  Ranked 5 in Government Bond category.  Return for 2024 was 8.2% , 2023 was 8.3% and 2022 was 3.7% .

Below is the key information for ICICI Prudential Gilt Fund

ICICI Prudential Gilt Fund
Growth
Launch Date 19 Aug 99
NAV (11 Feb 25) ₹98.9931 ↑ 0.09   (0.09 %)
Net Assets (Cr) ₹6,811 on 31 Dec 24
Category Debt - Government Bond
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 1.12
Sharpe Ratio 0.79
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 6.9%
Effective Maturity 6 Years 6 Months 18 Days
Modified Duration 3 Years 8 Months 19 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹11,227
31 Jan 22₹11,533
31 Jan 23₹12,099
31 Jan 24₹13,151
31 Jan 25₹14,230

ICICI Prudential Gilt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for ICICI Prudential Gilt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.8%
6 Month 3.7%
1 Year 8.2%
3 Year 7.2%
5 Year 7%
10 Year
15 Year
Since launch 9.4%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.2%
2023 8.3%
2022 3.7%
2021 3.8%
2020 12.6%
2019 10.8%
2018 6.8%
2017 2.1%
2016 18.2%
2015 5.5%
Fund Manager information for ICICI Prudential Gilt Fund
NameSinceTenure
Manish Banthia22 Jan 241.03 Yr.
Raunak Surana22 Jan 241.03 Yr.

Data below for ICICI Prudential Gilt Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash40.03%
Debt59.97%
Debt Sector Allocation
SectorValue
Government59.97%
Cash Equivalent40.03%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.1% Govt Stock 2034
Sovereign Bonds | -
40%₹2,660 Cr261,566,000
↓ -30,000,000
7.93% Govt Stock 2033
Sovereign Bonds | -
15%₹1,013 Cr98,471,700
91 DTB 23012025
Sovereign Bonds | -
6%₹400 Cr40,000,000
191 DTB 30012025
Sovereign Bonds | -
5%₹297 Cr29,786,500
↑ 15,000,000
364 Days T - Bill- 06/02/2025
Sovereign Bonds | -
3%₹224 Cr22,500,000
↑ 10,000,000
91 Days Tbill
Sovereign Bonds | -
3%₹220 Cr22,000,000
6.89% Govt Stock 2025
Sovereign Bonds | -
2%₹150 Cr15,000,000
7.18% Govt Stock 2033
Sovereign Bonds | -
2%₹111 Cr10,830,390
364 Day T-Bill 30.01.25
Sovereign Bonds | -
2%₹100 Cr10,000,000
182 D Tbill Mat - 14/02/2025
Sovereign Bonds | -
2%₹99 Cr10,000,000

9. ICICI Prudential Corporate Bond Fund

(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.

ICICI Prudential Corporate Bond Fund is a Debt - Corporate Bond fund was launched on 11 Aug 09. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.1% since its launch.  Ranked 7 in Corporate Bond category.  Return for 2024 was 8% , 2023 was 7.6% and 2022 was 4.5% .

Below is the key information for ICICI Prudential Corporate Bond Fund

ICICI Prudential Corporate Bond Fund
Growth
Launch Date 11 Aug 09
NAV (11 Feb 25) ₹28.7809 ↑ 0.01   (0.03 %)
Net Assets (Cr) ₹29,118 on 31 Dec 24
Category Debt - Corporate Bond
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.57
Sharpe Ratio 2.21
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 100
Exit Load NIL
Yield to Maturity 7.61%
Effective Maturity 3 Years 10 Months 17 Days
Modified Duration 2 Years 4 Months 24 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹10,973
31 Jan 22₹11,414
31 Jan 23₹11,974
31 Jan 24₹12,906
31 Jan 25₹13,945

ICICI Prudential Corporate Bond Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for ICICI Prudential Corporate Bond Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.7%
3 Month 1.8%
6 Month 3.8%
1 Year 8.1%
3 Year 6.9%
5 Year 6.8%
10 Year
15 Year
Since launch 7.1%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 8.8%
Fund Manager information for ICICI Prudential Corporate Bond Fund
NameSinceTenure
Manish Banthia22 Jan 241.03 Yr.
Ritesh Lunawat22 Jan 241.03 Yr.

Data below for ICICI Prudential Corporate Bond Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash5.2%
Debt94.53%
Other0.27%
Debt Sector Allocation
SectorValue
Corporate62.56%
Government31.97%
Cash Equivalent5.2%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.1% Govt Stock 2034
Sovereign Bonds | -
10%₹2,950 Cr290,127,880
7.93% Govt Stock 2033
Sovereign Bonds | -
7%₹2,104 Cr204,579,630
↓ -714,300
National Bank For Agriculture And Rural Development
Debentures | -
3%₹963 Cr96,500
↑ 2,500
Pipeline Infrastructure Private Limited
Debentures | -
3%₹818 Cr80,500
Bharat Petroleum Corporation Limited
Debentures | -
2%₹590 Cr59,000
Small Industries Development Bank Of India
Debentures | -
2%₹558 Cr5,600
↓ -750
6.79% Govt Stock 2034
Sovereign Bonds | -
2%₹532 Cr53,323,500
↑ 9,551,800
INDIA UNIVERSAL TRUST AL1
Unlisted bonds | -
2%₹531 Cr535
Small Industries Development Bank Of India
Debentures | -
2%₹525 Cr5,250
LIC Housing Finance Ltd
Debentures | -
2%₹518 Cr5,000

10. SBI Magnum Gilt Fund

(Erstwhile SBI Magnum Gilt Fund - Long Term Plan)

To provide the investors with returns generated through investments in government securities issued by the Central Government and / or a State Government

SBI Magnum Gilt Fund is a Debt - Government Bond fund was launched on 30 Dec 00. It is a fund with Moderate risk and has given a CAGR/Annualized return of 8% since its launch.  Ranked 3 in Government Bond category.  Return for 2024 was 8.9% , 2023 was 7.6% and 2022 was 4.2% .

Below is the key information for SBI Magnum Gilt Fund

SBI Magnum Gilt Fund
Growth
Launch Date 30 Dec 00
NAV (11 Feb 25) ₹63.9298 ↑ 0.03   (0.05 %)
Net Assets (Cr) ₹11,265 on 31 Dec 24
Category Debt - Government Bond
AMC SBI Funds Management Private Limited
Rating
Risk Moderate
Expense Ratio 0.94
Sharpe Ratio 0.76
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 6.88%
Effective Maturity 24 Years 6 Months 14 Days
Modified Duration 9 Years 10 Months 10 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 20₹10,000
31 Jan 21₹11,108
31 Jan 22₹11,467
31 Jan 23₹12,002
31 Jan 24₹12,972
31 Jan 25₹14,090

SBI Magnum Gilt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for SBI Magnum Gilt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 11 Feb 25

DurationReturns
1 Month 0.6%
3 Month 1.2%
6 Month 3.2%
1 Year 8%
3 Year 7.2%
5 Year 6.8%
10 Year
15 Year
Since launch 8%
Historical performance (Yearly) on absolute basis
YearReturns
2024 8.9%
2023 7.6%
2022 4.2%
2021 3%
2020 11.7%
2019 13.1%
2018 5.1%
2017 3.9%
2016 16.3%
2015 7.3%
Fund Manager information for SBI Magnum Gilt Fund
NameSinceTenure
Rajeev Radhakrishnan1 Nov 231.25 Yr.
Tejas Soman1 Dec 231.17 Yr.

Data below for SBI Magnum Gilt Fund as on 31 Dec 24

Asset Allocation
Asset ClassValue
Cash19.38%
Debt80.62%
Debt Sector Allocation
SectorValue
Government80.62%
Cash Equivalent19.38%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.34% Govt Stock 2064
Sovereign Bonds | -
42%₹4,753 Cr461,500,000
↓ -10,000,000
6.79% Govt Stock 2034
Sovereign Bonds | -
27%₹3,038 Cr304,326,300
↓ -54,000,000
7.3% Govt Stock 2053
Sovereign Bonds | -
9%₹1,000 Cr97,500,000
↓ -5,500,000
7.93% Govt Stock 2033
Sovereign Bonds | -
2%₹216 Cr21,000,000
↓ -2,500,000
7.26% Govt Stock 2033
Sovereign Bonds | -
1%₹67 Cr6,500,000
↓ -5,000,000
Treps
CBLO/Reverse Repo | -
17%₹1,968 Cr
Net Receivable / Payable
CBLO | -
2%₹212 Cr
6.92% Govt Stock 2039
Sovereign Bonds | -
₹0 Cr00
↓ -57,500,000
7.23% Govt Stock 2039
Sovereign Bonds | -
₹0 Cr00
↓ -21,500,000

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.

How to Invest in Long Term Bonds 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!

    Get Started

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.
How helpful was this page ?
Rated 5, based on 1 reviews.
POST A COMMENT