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Top Dynamic Bond Funds Rated by FINCASH for 2025 - 2026

Updated on August 27, 2025 , 847 views

Dynamic bond Funds can be considered as an investment option for mid or long-term plan. This Mutual Fund scheme invests its corpus in fixed Income securities consisting of varying maturity periods. In this fund, the fund managers decide on which funds they need to invest based on their perception of the interest rate scenario and future interest rate movements.

Investors who feel puzzled about the interest rate scenario can prefer Investing in Dynamic Bond Funds. You can rely on the view of the fund managers to earn profits through this fund. Some of the best performing dynamic bond funds to invest in are as follows:

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Top Rated Dynamic Bond Funds

FundNAVNet Assets (Cr)Rating3 MO (%)6 MO (%)1 YR (%)3 YR (%)2024 (%)Debt Yield (YTM)Mod. DurationEff. MaturityExit Load
Aditya Birla Sun Life Medium Term Plan Growth ₹40.2079
↓ -0.05
₹2,7440.94.712.79.210.57.44%3Y 6M 18D4Y 9M 4D 0-365 Days (1%),365 Days and above(NIL)
Axis Strategic Bond Fund Growth ₹28.2419
↓ -0.02
₹1,9380.74.58.47.88.77.64%3Y 4D3Y 9M 25D 0-12 Months (1%),12 Months and above(NIL)
Nippon India Strategic Debt Fund Growth ₹15.8738
↓ -0.02
₹1062.36.1108.18.37.21%3Y 2M 26D4Y 3M 29D 0-12 Months (1%),12 Months and above(NIL)
Kotak Medium Term Fund Growth ₹22.9284
↑ 0.01
₹1,8170.74.48.47.497.73%3Y 3M 22D5Y 3M 11D 0-18 Months (2%),18 Months and above(NIL)
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 29 Aug 25

Research Highlights & Commentary of 4 Funds showcased

CommentaryAditya Birla Sun Life Medium Term PlanAxis Strategic Bond FundNippon India Strategic Debt FundKotak Medium Term Fund
Point 1Highest AUM (₹2,744 Cr).Upper mid AUM (₹1,938 Cr).Bottom quartile AUM (₹106 Cr).Lower mid AUM (₹1,817 Cr).
Point 2Oldest track record among peers (16 yrs).Established history (13+ yrs).Established history (11+ yrs).Established history (11+ yrs).
Point 3Top rated.Rating: 4★ (upper mid).Rating: 4★ (lower mid).Rating: 3★ (bottom quartile).
Point 4Risk profile: Moderate.Risk profile: Moderate.Risk profile: Moderate.Risk profile: Moderate.
Point 51Y return: 12.74% (top quartile).1Y return: 8.43% (lower mid).1Y return: 10.04% (upper mid).1Y return: 8.36% (bottom quartile).
Point 61M return: -0.08% (lower mid).1M return: 0.01% (top quartile).1M return: -0.22% (bottom quartile).1M return: -0.01% (upper mid).
Point 7Sharpe: 2.94 (top quartile).Sharpe: 1.96 (upper mid).Sharpe: 1.62 (bottom quartile).Sharpe: 1.81 (lower mid).
Point 8Information ratio: 0.00 (top quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (bottom quartile).
Point 9Yield to maturity (debt): 7.44% (lower mid).Yield to maturity (debt): 7.64% (upper mid).Yield to maturity (debt): 7.21% (bottom quartile).Yield to maturity (debt): 7.73% (top quartile).
Point 10Modified duration: 3.55 yrs (bottom quartile).Modified duration: 3.01 yrs (top quartile).Modified duration: 3.24 yrs (upper mid).Modified duration: 3.31 yrs (lower mid).

Aditya Birla Sun Life Medium Term Plan

  • Highest AUM (₹2,744 Cr).
  • Oldest track record among peers (16 yrs).
  • Top rated.
  • Risk profile: Moderate.
  • 1Y return: 12.74% (top quartile).
  • 1M return: -0.08% (lower mid).
  • Sharpe: 2.94 (top quartile).
  • Information ratio: 0.00 (top quartile).
  • Yield to maturity (debt): 7.44% (lower mid).
  • Modified duration: 3.55 yrs (bottom quartile).

Axis Strategic Bond Fund

  • Upper mid AUM (₹1,938 Cr).
  • Established history (13+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderate.
  • 1Y return: 8.43% (lower mid).
  • 1M return: 0.01% (top quartile).
  • Sharpe: 1.96 (upper mid).
  • Information ratio: 0.00 (upper mid).
  • Yield to maturity (debt): 7.64% (upper mid).
  • Modified duration: 3.01 yrs (top quartile).

Nippon India Strategic Debt Fund

  • Bottom quartile AUM (₹106 Cr).
  • Established history (11+ yrs).
  • Rating: 4★ (lower mid).
  • Risk profile: Moderate.
  • 1Y return: 10.04% (upper mid).
  • 1M return: -0.22% (bottom quartile).
  • Sharpe: 1.62 (bottom quartile).
  • Information ratio: 0.00 (lower mid).
  • Yield to maturity (debt): 7.21% (bottom quartile).
  • Modified duration: 3.24 yrs (upper mid).

Kotak Medium Term Fund

  • Lower mid AUM (₹1,817 Cr).
  • Established history (11+ yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderate.
  • 1Y return: 8.36% (bottom quartile).
  • 1M return: -0.01% (upper mid).
  • Sharpe: 1.81 (lower mid).
  • Information ratio: 0.00 (bottom quartile).
  • Yield to maturity (debt): 7.73% (top quartile).
  • Modified duration: 3.31 yrs (lower mid).

Why Are These Top Performers?

Fincash has employed the following parameters for shortlisting the top performing funds:

  • Past Returns: Return analysis of last 3 years.

  • Parameters & Weights: Information ratio with some modifications for our ratings and rankings.

  • Qualitative & Quantitative Analysis: Quantitative measures like Average Maturity, Credit Quality, Expense Ratio, Sharpe Ratio, Sortino Ratio, Alpa, including fund age and the size of the fund has been considered. Qualitative analysis like the reputation of the fund along with the fund manager is one of the important parameters that you would see in the listed funds.

  • Asset Size: The minimum AUM criteria for debt mutual fund are INR 100 Crores with some exceptions at times for new funds that are doing well in the Market.

  • Performance with Respect to Benchmark: Peer average.

Smart Tips to Invest in Dynamic Bond Funds

Some of the important tips to consider while investing in dynamic bond funds are:

  • Investment Tenure: Investors planning to invest in dynamic bond funds should stay invested for minimum three years.

  • Invest via a SIP: SIP or Systematic Investment plan is the most efficient way to invest in a Mutual Fund. They not only provide a systematic way of investing, but also ensures regular investment growth. You can invest in a SIP with an amount as low as INR 500.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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