Corporate Bonds In India

The below table shows a list Of the Corporate Bonds In India Based on AUM, NAV and minimum SIP.

Name	AUM (Cr)	NAV (Rs)	Minimum SIP (Rs)
HDFC Corp Bond Fund	29726.31	30.92	5000
ICICI Pru Corp Bond Fund	27056.37	29.07	100
SBI Corp Bond Fund	20285.67	14.81	1500
Aditya Birla SL Corp Bond Fund	20005.55	106.79	100
Bandhan Corp Bond Fund	13607.68	18.40	100
Kotak Corporate Bond Fund	13275.17	3656.96	100
HSBC Corporate Bond Fund	5965.70	72.27	1500
Axis Corp Debt Fund	5511.39	16.73	12000
UTI Corporate Bond Fund	3723.82	15.56	100
Nippon India Corp Bond Fund	3246.69	58.30	100

Introduction To Best Corporate Bonds

HDFC Corporate Bond Fund  

HDFC Corporate Bond Fund is a Corporate Bond mutual fund scheme from HDFC Mutual Fund. This fund was operational for 11 years and 8 months and was launched on January 1, 2013.

HDFC Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹29,726.31 crores, a 5-year CAGR of 7.10%, no exit load and an expense ratio of 0.36%. The SEBI risk category is Moderate. Its asset allocation includes 0.06% in Secured Debt, 0.25% in Cash & Equivalents, 3.42% in Government Securities and 70.62% in Corporate Debt.

ICICI Prudential Corporate Bond Fund  

ICICI Prudential Corporate Bond Fund is a Corporate Bond mutual fund scheme from ICICI Prudential Mutual Fund. This fund was operational for 11 years and 7 months and was launched on January 1, 2013.

ICICI Prudential Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹27,056.37 crores, a 5-year CAGR of 7.26%, no exit load and an expense ratio of 0.35%. The SEBI risk category is Moderate. Its asset allocation includes 0.05% in Certificate of Deposit, 0.23% in Cash & Equivalents, 1.57% in Government Securities and 73.92% in Corporate Debt.

SBI Corporate Bond Fund  

SBI Corporate Bond Fund is a Corporate Bond mutual fund scheme from SBI Mutual Fund. This fund was operational for 5 years and 7 months and was launched on January 16, 2019.

SBI Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹20,285.67 crores, a 5-year CAGR of 6.69%, no exit load and an expense ratio of 0.35%. The SEBI risk category is Moderate. Its asset allocation includes 0.26% in Cash & Equivalents, 3.34% in Government Securities and 74.39% in Corporate Debt.

Aditya Birla Sun Life Corporate Bond Fund  

Aditya Birla Sun Life Corporate Bond Fund is a Corporate Bond mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund was operational for 11 years and 8 months and was launched on January 1, 2013.

Aditya Birla Sun Life Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹20,005.55 crores, a 5-year CAGR of 7.25%, no exit load and an expense ratio of 0.34%. The SEBI risk category is Moderate. Its asset allocation includes 0.25% in Secured Debt, 0.62% in Floating-rate Debt, 2.93% in Cash & Equivalents and 64.22% in Corporate Debt.

Bandhan Corporate Bond Fund  

Bandhan Corporate Bond Fund is a Corporate Bond mutual fund scheme from Bandhan Mutual Fund. This fund has been operational for 8 years and 8 months, having been launched on December 28, 2015.

Bandhan Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹13,607.68 crores, a 5-year CAGR of 6.69%, no exit load and an expense ratio of 0.33%. The SEBI risk category is Moderate. Its asset allocation includes 0.29% in Cash & Equivalents, 2.47% in Government Securities and 70.37% in Corporate Debt.

Kotak Corporate Bond Fund  

Kotak Corporate Bond Fund is a Corporate Bond mutual fund scheme from Kotak Mahindra Mutual Fund. This fund was operational for 11 years and 8 months and was launched on January 11, 2013.

Kotak Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹13,275.17 crores, a 5-year CAGR of 6.79%, no exit load and an expense ratio of 0.34%. The SEBI risk category is Moderate. Its asset allocation includes 0.24% in Secured Debt, 1.45% in Cash & Equivalents, 2.81% in Government Securities and 66.02% in Corporate Debt.

HSBC Corporate Bond Fund  

HSBC Corporate Bond Fund is a Corporate Bond mutual fund scheme from HSBC Mutual Fund. This fund has been operational for 2 years and 11 months, having been launched on September 29, 2020.

HSBC Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹5,965.70 crores, a 5-year CAGR of 6.82%, no exit load and an expense ratio of 0.30%. The SEBI risk category is Moderate. Its asset allocation includes 0.07% in Cash & Equivalents, 0.30% in Government Securities and 79.61% in Corporate Debt.

Axis Corporate Debt Fund  

Axis Corporate Debt Fund is a Corporate Bond mutual fund scheme from Axis Mutual Fund. This fund has been operational for 7 years and 2 months, having been launched on June 23, 2017.

Axis Corporate Debt Fund falls under the Corporate Bond Fund category with an AUM of ₹5,511.39 crores, a 5-year CAGR of 7.47%, no exit load and an expense ratio of 0.30%. The SEBI risk category is Moderate. Its asset allocation includes 0.02% in Floating-rate Debt, 0.24% in Cash & Equivalents, 0.87% in Government Securities and 67.60% in Corporate Debt.

UTI Corporate Bond Fund  

UTI Corporate Bond Fund is a Corporate Bond mutual fund scheme from UTI Mutual Fund. This fund has been operational for 6 years and 1 month, and it was launched on August 8, 2018.

UTI Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹3,723.82 crores, a 5-year CAGR of 6.95%, no exit load and an expense ratio of 0.29%. The SEBI risk category is Moderate. Its asset allocation includes 0.24% in Cash & Equivalents, 3.34% in Government Securities and 69.50% in Corporate Debt.

Nippon India Corporate Bond Fund  

Nippon India Corporate Bond Fund is a Corporate Bond mutual fund scheme from Nippon India Mutual Fund. This fund was operational for 11 years and 8 months and was launched on January 1, 2013.

Nippon India Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹3,246.69 crores, a 5-year CAGR of 7.12%, no exit load and an expense ratio of 0.35%. The SEBI risk category is Moderate. Its asset allocation includes 0.00% in Futures & Options, 0.24% in Cash & Equivalents, 4.56% in Government Securities and 69.25% in Corporate Debt.

Corporate Bond Meaning

Corporate bonds are debt securities issued by companies to raise capital for various purposes such as expansion, operations, or refinancing existing debt. Investors who purchase these bonds are essentially lending money to the company in exchange for periodic interest payments and the return of the principal amount at maturity.

These bonds represent a contractual obligation between the issuing company and the bondholders. The company promises to pay a specified interest rate (coupon rate) at regular intervals and return the face value of the bond at maturity.

Corporate bonds are generally considered less risky than stocks but riskier than government bonds. They offer higher yields than government securities to compensate for the additional risk. The creditworthiness of the issuing company plays a crucial role in determining the bond’s risk and yield.

Features Of Corporate Bonds In India

The main features of Corporate Bonds in India include fixed or floating interest rates, specified maturity dates, credit ratings, face value and periodic interest payments. These bonds offer a way for companies to raise capital and for investors to earn regular income.

• Interest payments: Corporate bonds typically pay interest (coupon) at regular intervals, usually semi-annually or annually, providing a steady income stream to investors.

• Maturity date: Each bond has a predetermined maturity date when the issuer must repay the principal amount to bondholders.

• Credit rating: Bonds are assigned credit ratings by agencies, indicating the issuer’s creditworthiness and the bond’s risk level.

• Face value: This is the amount the bond will be worth at maturity and the base for calculating interest payments.

List Of Corporate Bonds In India Based On Expense Ratio

The table below shows the list Of Corporate Bonds In India Based On Expense ratios based on the lowest to highest expense ratio.

Name	Expense Ratio (%)	Minimum SIP (Rs)
UTI Corporate Bond Fund	0.29	100
HSBC Corporate Bond Fund	0.3	1500
Axis Corp Debt Fund	0.3	12000
Bandhan Corp Bond Fund	0.33	100
Aditya Birla SL Corp Bond Fund	0.34	100
Kotak Corporate Bond Fund	0.34	100
ICICI Pru Corp Bond Fund	0.35	100
SBI Corp Bond Fund	0.35	1500
Nippon India Corp Bond Fund	0.35	100
HDFC Corp Bond Fund	0.36	5000

Best Corporate Bonds Based On 3Y CAGR

The table below shows the Best Corporate Bonds Based On 3Y CAGR based on the Highest 3Y CAGR.

Name	CAGR 3Y (Cr)	Minimum SIP (Rs)
ICICI Pru Corp Bond Fund	6.56	100
Nippon India Corp Bond Fund	6.49	100
Axis Corp Debt Fund	6.34	12000
Aditya Birla SL Corp Bond Fund	6.21	100
HDFC Corp Bond Fund	6.12	5000
Kotak Corporate Bond Fund	6.10	100
UTI Corporate Bond Fund	5.80	100
SBI Corp Bond Fund	5.79	1500
HSBC Corporate Bond Fund	5.72	1500
Bandhan Corp Bond Fund	5.39	100

Top Corporate Bonds In India Based On Exit Load

The table below shows the Top Corporate Bonds In India Based On Exit Load based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Name	AMC	Exit Load (%)
ICICI Pru Corp Bond Fund	ICICI Prudential Asset Management Company Limited	0
Nippon India Corp Bond Fund	Nippon Life India Asset Management Limited	0
Axis Corp Debt Fund	Axis Asset Management Company Ltd.	0
Aditya Birla SL Corp Bond Fund	Aditya Birla Sun Life AMC Limited	0
HDFC Corp Bond Fund	HDFC Asset Management Company Limited	0
Kotak Corporate Bond Fund	Kotak Mahindra Asset Management Company Limited	0
UTI Corporate Bond Fund	UTI Asset Management Company Private Limited	0
SBI Corp Bond Fund	SBI Funds Management Limited	0
HSBC Corporate Bond Fund	HSBC Global Asset Management (India) Private Limited	0
Bandhan Corp Bond Fund	Bandhan AMC Limited	0

Corporate Bond Returns

The table below shows Corporate Bond Returns Based on 1Y return

Name	Absolute Returns – 1Y (%)	Minimum SIP (Rs)
Axis Corp Debt Fund	8.35	12000
HDFC Corp Bond Fund	8.34	5000
Aditya Birla SL Corp Bond Fund	8.33	100
Nippon India Corp Bond Fund	8.33	100
Kotak Corporate Bond Fund	8.28	100
HSBC Corporate Bond Fund	8.08	1500
ICICI Pru Corp Bond Fund	8.00	100
UTI Corporate Bond Fund	7.96	100
SBI Corp Bond Fund	7.90	1500
Bandhan Corp Bond Fund	7.64	100

Historical Performance Of Corporate Bonds In India

The table below shows the Historical Performance Of Corporate Bonds In India Based on a 5Y return

Name	CAGR 5Y (Cr)	Minimum SIP (Rs)
Axis Corp Debt Fund	7.47	12000
ICICI Pru Corp Bond Fund	7.26	100
Aditya Birla SL Corp Bond Fund	7.25	100
Nippon India Corp Bond Fund	7.12	100
HDFC Corp Bond Fund	7.10	5000
UTI Corporate Bond Fund	6.95	100
HSBC Corporate Bond Fund	6.82	1500
Kotak Corporate Bond Fund	6.79	100
SBI Corp Bond Fund	6.69	1500
Bandhan Corp Bond Fund	6.69	100

Factors To Consider When Investing In Corporate Bonds List

When investing in corporate bonds, consider the issuer’s creditworthiness, bond yield, maturity date, interest rate environment and your investment goals. Also evaluate the bond’s credit rating, liquidity and any call or put features.

• Creditworthiness: Assess the financial health and stability of the issuing company. Higher-rated bonds generally offer lower risk but also lower yields.

• Yield: Compare the yields of different bonds. Higher yields often indicate higher risk, so balance potential returns with your risk tolerance.

• Maturity: Choose bonds with maturity dates that align with your investment horizon. Longer-term bonds typically offer higher yields but are more sensitive to interest rate changes.

• Interest rate environment: Consider the current and expected future interest rates. Rising rates can negatively impact bond prices, especially for longer-term bonds.

• Liquidity: Evaluate how easily the bond can be bought or sold in the secondary market. More liquid bonds are generally preferable for easier portfolio management.

How To Invest In Corporate Bonds?

To invest in corporate bonds, start by researching available bonds and their features. Consider factors like credit ratings, yields and maturity dates. Once you’ve identified suitable bonds, you can invest through Alice Blue, a user-friendly online investment platform that offers access to various corporate bonds.

Alice Blue provides tools and resources to help you make informed investment decisions. You can purchase bonds in the primary market during new issues or in the secondary market. The platform allows you to track your investments and manage your bond portfolio efficiently.

Remember to diversify your bond investments across different issuers and sectors to manage risk. Consider consulting with a financial advisor to ensure your bond investments align with your overall investment strategy and financial goals.

Impact Of Market Trends On Corporate Bonds

Market trends significantly influence corporate bonds, particularly interest rate movements and economic conditions. When interest rates rise, bond prices typically fall and vice versa. This inverse relationship affects the value of existing bonds in the secondary market.

Economic conditions also impact corporate bonds. During economic downturns, investors may perceive higher risk in corporate bonds, leading to wider credit spreads and potentially lower bond prices. Conversely, during economic growth, corporate bonds may become more attractive as companies’ financial health improves.

How Does Corporate Bonds Perform In Volatile Markets?

Corporate bonds generally demonstrate more stability than stocks during volatile markets, but they can still experience price fluctuations. Their performance depends on factors such as the bond’s credit quality, maturity and the overall economic environment.

High-quality corporate bonds (investment-grade) tend to be more resilient during market volatility, often seen as a safer alternative to stocks. However, lower-rated (high-yield) corporate bonds can be more volatile, behaving more like stocks during market turbulence due to their higher risk profile.

Types Of Corporate Bonds

The main types of corporate bonds include secured bonds, unsecured bonds, convertible bonds and callable bonds. These different types offer varying levels of risk and potential returns to cater to diverse investor needs.

• Secured bonds: These are backed by specific assets of the company, providing additional security to bondholders. In case of default, bondholders have a claim on the pledged assets.

• Unsecured bonds: Also known as debentures, these bonds are not backed by specific assets. They rely solely on the issuing company’s creditworthiness.

• Convertible bonds: These bonds can be converted into a predetermined number of the company’s common stock shares. They offer potential for capital appreciation if the stock price rises.

• Callable bonds: These allow the issuer to redeem the bonds before maturity. They typically offer higher yields to compensate for this additional risk to investors.

Advantages Of Corporate Bonds

The main advantages of corporate bonds include regular income, the potential for higher yields, diversification benefits and lower risk compared to stocks. These features make corporate bonds an attractive option for many investors seeking income and moderate risk.

• Regular income: Corporate bonds provide periodic interest payments, offering a steady income stream to investors. This can be particularly attractive for income-oriented investors.

• Higher yields: Compared to government bonds, corporate bonds typically offer higher yields to compensate for the additional risk, potentially enhancing overall portfolio returns.

• Diversification: Including corporate bonds in a portfolio can help diversify risk, as they often have a low correlation with stocks and can provide stability during stock market volatility.

• Capital preservation: While not risk-free, corporate bonds, especially investment-grade ones, offer better capital preservation prospects compared to stocks.

Contribution Of Corporate Bonds To Portfolio Diversification

Corporate bonds contribute significantly to portfolio diversification by offering a middle ground between the relative safety of government bonds and the higher risk of stocks. They provide a way to potentially enhance portfolio yield while managing overall risk.

Including corporate bonds can help balance a portfolio’s risk-return profile. They typically have a low correlation with stocks, providing a cushion during stock market downturns. Additionally, the regular income from corporate bonds can help stabilize portfolio returns, especially important for investors seeking steady cash flow.

Who Should Invest In Corporate Bonds?

Corporate bonds are suitable for investors seeking regular income and moderate capital appreciation with lower risk than stocks. They are ideal for conservative to moderate-risk investors, retirees looking for a steady income and those wanting to diversify their investment portfolio beyond stocks and government securities.

These bonds can be appropriate for investors with a medium to long-term investment horizon, typically 3-5 years or more. However, the suitability depends on individual financial goals, risk tolerance and overall portfolio composition. It’s advisable to consult a financial advisor to determine if corporate bonds fit your investment strategy.

Impact Of Manager Expertise On Corporate Bonds Performance

Manager expertise plays a crucial role in corporate bond performance, particularly in actively managed bond funds or portfolios. Skilled managers can add value through credit analysis, sector allocation and duration management, potentially enhancing returns and managing risks more effectively.

Experienced managers can identify undervalued bonds, anticipate credit rating changes and navigate interest rate cycles. Their expertise in assessing company fundamentals and market conditions can lead to better security selection and portfolio construction. This can result in improved risk-adjusted returns compared to passively managed bond indices.

How Long Should I Invest In Corporate Bonds?

The ideal investment horizon for corporate bonds typically ranges from 3 to 7 years, aligning with the medium-term nature of many corporate bond maturities. This timeframe allows investors to benefit from the bonds’ interest payments and potential price appreciation while managing interest rate risk.

However, the exact duration can vary based on individual financial goals, the specific bonds’ maturities and market conditions. Longer-term corporate bonds may offer higher yields but come with increased interest rate risk. It’s important to match your investment horizon with your financial objectives and risk tolerance.

FAQs – Corporate Bonds In India

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Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.