- Date : 17/11/2022
- Read: 2 mins
Four 25-years old debt funds with returns of 6%-9%
Different types of mutual fund schemes cater to the varied investment strategies and risk profiles of different investors. While equity funds can generate high returns but face volatility risks, debt funds offer low but stable returns.
If you are looking to add a debt component to diversify your portfolio or if you are risk averse, you can invest in debt funds for steady returns.
Related - Here are six questions about debt funds, answered!
Every Asset Management Company (AMC) offers multiple types of debt funds. Among the available options, four funds just completed 25 years in the market, delivering returns ranging from 6% to 9% since launch. Here’s a look at these funds –
Here’s an in-depth assessment of each fund –
- ABSL Income Fund - The fund falls under the medium to long-duration debt fund category and has an AUM (Assets under Management) of Rs.1538 crores. Since inception, the fund has generated benchmark-beating returns multiple times. In fact, since 2010, the fund returns have surpassed the benchmark six times. However, the fund exhibits higher volatility compared to its benchmark and offers higher risk-adjusted returns.
Some of the important metrics of the fund are as follows –
- HDFC Dynamic Debt Fund - This dynamic debt fund allows the fund manager to invest in instruments across maturities. Since 2010, the fund has exceeded its benchmark index five times. However, it has a higher standard deviation which means higher risk-adjusted returns.
The fund metrics are as follows –
- DSP Bond Fund - The fund invests primarily in bonds and is a medium-duration debt fund. Since 2010, the scheme has managed to beat benchmark returns only thrice. The standard deviation is lower, which indicates lower volatility and lower risk-adjusted returns. One-year trailing returns of the fund are lower than the benchmark index.
The important fund metrics are as follows –
The takeaway
These debt funds have established themselves in the market since inception. However, the funds differ in terms of the category of debt funds they fall in and their performance. So, assess these funds before investing and then invest if they match your investment needs.
Different types of mutual fund schemes cater to the varied investment strategies and risk profiles of different investors. While equity funds can generate high returns but face volatility risks, debt funds offer low but stable returns.
If you are looking to add a debt component to diversify your portfolio or if you are risk averse, you can invest in debt funds for steady returns.
Related - Here are six questions about debt funds, answered!
Every Asset Management Company (AMC) offers multiple types of debt funds. Among the available options, four funds just completed 25 years in the market, delivering returns ranging from 6% to 9% since launch. Here’s a look at these funds –
Here’s an in-depth assessment of each fund –
- ABSL Income Fund - The fund falls under the medium to long-duration debt fund category and has an AUM (Assets under Management) of Rs.1538 crores. Since inception, the fund has generated benchmark-beating returns multiple times. In fact, since 2010, the fund returns have surpassed the benchmark six times. However, the fund exhibits higher volatility compared to its benchmark and offers higher risk-adjusted returns.
Some of the important metrics of the fund are as follows –
- HDFC Dynamic Debt Fund - This dynamic debt fund allows the fund manager to invest in instruments across maturities. Since 2010, the fund has exceeded its benchmark index five times. However, it has a higher standard deviation which means higher risk-adjusted returns.
The fund metrics are as follows –
- DSP Bond Fund - The fund invests primarily in bonds and is a medium-duration debt fund. Since 2010, the scheme has managed to beat benchmark returns only thrice. The standard deviation is lower, which indicates lower volatility and lower risk-adjusted returns. One-year trailing returns of the fund are lower than the benchmark index.
The important fund metrics are as follows –
The takeaway
These debt funds have established themselves in the market since inception. However, the funds differ in terms of the category of debt funds they fall in and their performance. So, assess these funds before investing and then invest if they match your investment needs.
