Best Medium to Long Duration Mutual Funds

The below table shows a list Of the Best Medium to Long Duration funds based on AUM, NAV, and minimum SIP.

Name	AUM (Cr)	NAV (Rs)	Minimum SIP (Rs)
ICICI Pru Bond Fund	2,959.73	39.81	1000
Kotak Bond Fund	2,161.30	81.12	100
Aditya Birla SL Income Fund	1,921.63	127.67	1000
SBI Magnum Income Fund	1,781.39	71.64	500
HDFC Income Fund	843.29	60.59	1500
Bandhan Bond Fund – Income Plan	477.57	67.55	100
Nippon India Income Fund	337.75	94.66	1500
UTI Medium to Long Duration Fund	307.07	75.23	500
LIC MF Medium to Long Duration Fund	172.4	72.76	1000
Canara Rob Income Fund	114.67	58.78	1000

Introduction to Medium to Long-Duration Mutual Funds in India

ICICI Pru Bond Fund

ICICI Prudential Bond Fund Direct Plan-Growth is a Medium to Long Duration mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

ICICI Pru Bond Fund as a Medium to Long Duration fund, manages assets valued at ₹2959.73 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.39%. This fund has no exit load and an expense ratio of 0.62%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 96.93% and Other at 3.07%.

Kotak Bond Fund

Kotak Bond Fund Direct-Growth is a Medium to Long Duration mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Kotak Bond Fund as a Medium to Long Duration fund, manages assets valued at ₹2161.30 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.46%. This fund has no exit load and an expense ratio of 0.69%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 97.62% and Other at 2.38%.

Aditya Birla SL Income Fund

Aditya Birla Sun Life Income Fund Direct-Growth is a Medium to Long Duration mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Aditya Birla SL Income Fund as a Medium to Long Duration fund, manages assets valued at ₹1921.63 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.21%. This fund has no exit load and an expense ratio of 0.74%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 95.98% and Other at 4.02%.

SBI Magnum Income Fund

SBI Magnum Income Direct Plan-Growth is a Medium to Long Duration mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

SBI Magnum Income Fund as a Medium to Long Duration fund, manages assets valued at ₹1781.39 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.79%. This fund has an exit load of 1% and an expense ratio of 0.78%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 90.26% and Other at 9.74%.

HDFC Income Fund

HDFC Income Direct Plan-Growth is a Medium to Long Duration mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

HDFC Income Fund as a Medium to Long Duration fund, manages assets valued at ₹843.29 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.52%. This fund has no exit load and an expense ratio of 0.8%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 95.93% and Other at 4.61%.

Bandhan Bond Fund – Income Plan

Bandhan Bond Fund Income Plan Direct-Growth is a Medium to Long Duration mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Bandhan Bond Fund – Income Plan as a Medium to Long Duration fund, manages assets valued at ₹477.57 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.24%. This fund has an exit load of 1% and an expense ratio of 1.32%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 98.23% and Other at 1.77%.

Nippon India Income Fund

Nippon India Income Fund Direct-Growth is a Medium to Long Duration mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Nippon India Income Fund as a Medium to Long Duration fund, manages assets valued at ₹337.75 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.14%. This fund has an exit load of 0.25% and an expense ratio of 0.67%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 94.6% and Other at 5.4%.

UTI Medium to Long Duration Fund

UTI Medium to Long Duration Fund Direct-Growth is a Medium to Long Duration mutual fund scheme from UTI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

UTI Medium to Long Duration Fund as a Medium to Long Duration fund, manages assets valued at ₹307.7 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.05%. This fund has an exit load of 3% and an expense ratio of 1.25%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 97.81% and Other at 2.19%.

LIC MF Medium to Long Duration Fund

LIC MF Medium to Long Duration Fund Direct-Growth is a Medium to Long Duration mutual fund scheme from LIC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

LIC MF Medium to Long Duration Fund as a Medium to Long Duration fund, manages assets valued at ₹172.4 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.33%. This fund has an exit load of 0.25% and an expense ratio of 0.21%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 97.47% and Other at 2.52%.

Canara Rob Income Fund

Canara Robeco Income Direct-Growth is a Medium to Long Duration mutual fund scheme from Canara Robeco Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Canara Rob Income Fund as a Medium to Long Duration fund, manages assets valued at ₹114.67 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.57%. This fund has no exit load and an expense ratio of 0.68%. According to SEBI, it falls under the Moderately-risk category. The fund’s asset allocation comprises No Equity, Debt at 91.21% and Other at 8.79%.

What Is Medium to Long Duration Mutual Funds?

Medium to Long Duration Mutual Funds invest in debt securities with a portfolio duration ranging from 4 to 7 years. They aim to generate consistent returns by taking advantage of fixed-income instruments, balancing income generation and interest rate fluctuations.

These funds are sensitive to interest rate movements, benefiting from falling rates but facing a potential decline in value when rates rise. Compared to short-duration funds, they offer higher returns but come with a moderate level of interest rate risk.

Suitable for investors with a time horizon of 3 to 5 years or more, these funds provide relatively stable income. They are ideal for those seeking moderate risk and willing to tolerate short-term volatility for better long-term returns.

Features of the Best Medium to Long-Duration Mutual Funds

The main features of the best medium to long-duration mutual funds include a strong track record of returns, high credit quality of underlying bonds, low expense ratios and effective risk management strategies to minimize interest rate and credit risks.

• Strong Track Record: The best funds show consistent performance over various market conditions. A strong historical record indicates skilled management and the fund’s ability to navigate different interest rate environments, offering competitive returns relative to its peers.

• High Credit Quality: Top funds invest in high-credit-quality bonds, ensuring that the risk of default is minimized. By holding bonds from reputable issuers, these funds provide more stability and reduce the likelihood of significant capital losses.

• Low Expense Ratio: A lower expense ratio ensures more of the investor’s returns are retained. Top-performing funds typically keep management fees and other costs low, maximizing the net returns to investors over the long term.

• Effective Risk Management: The best funds use advanced risk management techniques to mitigate interest rate and credit risks. This includes diversifying holdings, maintaining appropriate bond durations and adjusting the portfolio to changing market conditions, thus protecting investors’ capital.

Top Medium to Long Duration Mutual Funds In India Based on Expense Ratio

The table below shows the Best-performing Medium to Long Duration Fund Based on the highest to lowest expense ratio.

Name	Expense Ratio (%)	Minimum SIP (Rs)
Bandhan Bond Fund – Income Plan	1.32	100
UTI Medium to Long Duration Fund	1.25	500
HDFC Income Fund	0.8	1500
SBI Magnum Income Fund	0.78	500
Aditya Birla SL Income Fund	0.74	1000
Kotak Bond Fund	0.69	100
Canara Rob Income Fund	0.68	1000
Nippon India Income Fund	0.67	1500
HSBC Medium to Long Duration Fund Fund	0.67	500
ICICI Pru Bond Fund	0.62	1000

Best Medium to Long Duration Mutual Funds To Invest In Based on 3Y CAGR

The table below shows the Best Medium to Long Duration Fund Based on the Highest 3Y CAGR.

Name	CAGR 3Y (Cr)	Minimum SIP (Rs)
UTI Medium to Long Duration Fund	10.75	500
Nippon India Income Fund	6.61	1,500
SBI Magnum Income Fund	6.39	500
Kotak Bond Fund	6.34	100
ICICI Pru Bond Fund	6.34	1,000
LIC MF Medium to Long Duration Fund	6.28	1000
HDFC Income Fund	5.99	1,500
Aditya Birla SL Income Fund	5.9	1000
Canara Rob Income Fund	5.65	1000
HSBC Medium to Long Duration Fund Fund	5.32	500

Medium to Long Duration Mutual Funds List Based on Exit Load 

The table below shows the best-performing medium to Long medium-to-duration fund In India 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 (%)
Nippon India Income Fund	Nippon Life India Asset Management Limited	0.25
LIC MF Medium to Long Duration Fund	LIC Mutual Fund Asset Management Limited	0.25
SBI Magnum Income Fund	SBI Funds Management Limited	1
Bandhan Bond Fund – Income Plan	Bandhan AMC Limited	1
UTI Medium to Long Duration Fund	UTI Asset Management Company Private Limited	3
Kotak Bond Fund	Kotak Mahindra Asset Management Company Limited	0
ICICI Pru Bond Fund	ICICI Prudential Asset Management Company Limited	0
HDFC Income Fund	HDFC Asset Management Company Limited	0
Aditya Birla SL Income Fund	Aditya Birla Sun Life AMC Limited	0
Canara Rob Income Fund	Canara Robeco Asset Management Company Limited	0

Medium to Long Duration Mutual Funds Returns

The table below shows Medium to Long Duration Fund Returns Based on 1Y return.

Name	Absolute Returns – 1Y (%)	Minimum SIP (Rs)
Kotak Bond Fund	9.88	100
Nippon India Income Fund	9.63	1500
HDFC Income Fund	9.52	1500
LIC MF Medium to Long Duration Fund	9.41	1000
HSBC Medium to Long Duration Fund Fund	9.37	500
ICICI Pru Bond Fund	9.16	1000
Canara Rob Income Fund	9.15	1000
SBI Magnum Income Fund	9.06	500
JM Medium to Long Duration Fund	9.01	100
Bandhan Bond Fund – Income Plan	9	100

Historical Performance of Medium to Long-Duration Mutual Funds

The table below shows the Historical Performance Of Medium to Long Duration Fund based on 5Y return.

Name	CAGR 5Y (Cr)	Minimum SIP (Rs)
SBI Magnum Income Fund	7.79	500
Kotak Bond Fund	7.46	100
ICICI Pru Bond Fund	7.39	1000
Aditya Birla SL Income Fund	7.21	1000
Nippon India Income Fund	7.14	1500
UTI Medium to Long Duration Fund	7.05	500
Canara Rob Income Fund	6.57	1000
HDFC Income Fund	6.52	1500
LIC MF Medium to Long Duration Fund	6.33	1000
Bandhan Bond Fund – Income Plan	6.24	100

Factors to Consider When Investing in Medium to Long-Duration Mutual Funds

The main factor to consider when investing in medium to long-duration mutual funds is interest rate trends. Understanding how rate changes affect bond prices is crucial, along with evaluating the fund’s credit quality, liquidity and inflation risk.

• Interest Rate Trends: Investors must monitor interest rate trends, as rate increases can lead to capital losses in long-duration bonds. Timing the entry and exit based on rate expectations is key to optimizing returns in these funds.

• Credit Quality: The fund’s credit quality affects its risk level. Higher-rated bonds are more stable but offer lower yields, while lower-rated (high-yield) bonds present more risk but potentially higher returns. Understanding the fund’s credit exposure is essential for assessing risk.

• Inflation Expectations: Rising inflation can erode the real value of fixed-income payments. Investors should evaluate inflation forecasts, as higher inflation reduces the purchasing power of bond interest, impacting the overall returns from the fund.

• Liquidity of the Fund: The liquidity of bonds within the fund is important, especially during market volatility. Funds holding lower-rated or less liquid bonds may face difficulties selling at favourable prices potentially impacting the ability to exit the investment smoothly.

How to Invest in Top Medium to Long Duration Mutual Funds?

To invest in top Medium to Long Duration Mutual Funds, research funds with consistent past performance and a reputable fund manager. Analyze their portfolios, focusing on credit quality and interest rate sensitivity to ensure they align with your risk tolerance.

Choose an investment platform like Alice Blue. Register with necessary documents, such as identity proof and bank details, to open an account. You can then select your preferred fund and invest either as a lump sum or through SIPs.

Regularly monitor your investment to ensure it meets your financial goals and market conditions. Rebalance your portfolio if needed, especially in response to interest rate changes, which can affect fund performance over time.

Impact of Market Trends on Top Medium to Long-Duration Mutual Funds

Market trends, especially interest rate movements, significantly impact Medium to Long Duration Mutual Funds. Falling interest rates can increase bond prices, boosting fund returns. Conversely, rising rates may decrease bond values, leading to potential short-term losses for investors.

Economic factors such as inflation, government policies, and global financial conditions also influence these funds. A stable economy can enhance credit quality and reduce risk, while uncertainty or market volatility might lead to fluctuations in returns, requiring careful monitoring by investors.

How Medium to Long Duration Mutual Funds Perform in Volatile Markets?

In volatile markets, Medium to Long Duration Mutual Funds face heightened risk due to fluctuating interest rates. Rising rates can cause bond prices to drop, leading to potential short-term losses, while falling rates may improve fund performance.

Despite market volatility, these funds can still offer stable returns over the long term. Investors with a longer horizon may benefit as markets stabilize, though short-term fluctuations require patience and tolerance for higher risk during uncertain periods.

Advantages of Investing in Medium to Long Duration Mutual Funds

The main advantage of investing in medium to long-duration mutual funds is the potential for higher returns over time, especially in a falling interest rate environment. These funds can also provide relatively stable income through interest payments from the underlying bonds.

• Higher Return Potential: Medium to long-duration funds generally offer higher returns compared to short-duration funds. This is because longer-duration bonds tend to have higher yields, which can benefit investors, especially in periods of declining interest rates.

• Stable Income: These funds invest in bonds that provide regular interest payments. This consistent income can be attractive for investors seeking steady cash flows over the investment horizon, particularly in stable or falling interest rate environments.

• Capital Appreciation in Falling Rates: When interest rates decline, the price of bonds increases, leading to capital appreciation. Investors in longer-duration funds benefit more from this, as the sensitivity to interest rate changes is higher, potentially boosting returns.

• Diversification: Investing in a mutual fund spreads risk across different bonds and issuers, reducing the impact of any single default or poor performance. This diversification can provide a balance between risk and reward, offering a safer alternative to investing in individual bonds.

Risks of Investing in Medium to Long-Duration Mutual Funds

The main risk of investing in medium to long-duration mutual funds is interest rate sensitivity. As interest rates rise, bond prices fall, leading to potential capital losses, especially for longer-duration bonds which are more sensitive to rate fluctuations.

• Interest Rate Risk: Longer-duration bonds are highly sensitive to interest rate changes. If rates rise, the bond prices fall and the investor could face capital losses, significantly impacting returns.

• Credit Risk: There’s a possibility that bond issuers might default on their payments. This is particularly relevant for funds holding lower-rated or high-yield bonds, which are riskier but offer higher returns.

• Inflation Risk: Rising inflation reduces the real return on bonds. Fixed-income payments become less valuable over time as inflation erodes purchasing power, potentially leading to lower actual returns than expected.

• Liquidity Risk: During periods of market stress, it may be difficult to sell bonds at favourable prices, especially for funds holding lower-rated bonds. This risk can cause a decline in the fund’s value if bonds need to be sold at a loss.

Contribution of Medium to Long Duration Mutual Funds to Portfolio Diversification

Medium to Long Duration Mutual Funds contribute to portfolio diversification by offering a balance between risk and return. Their fixed-income nature provides stability and income, reducing overall portfolio volatility, especially during market downturns or economic uncertainties.

These funds complement equities and other volatile assets by mitigating risk from stock market fluctuations. They help preserve capital during interest rate cycles, making them a valuable addition for investors seeking moderate returns with reduced portfolio risk over the long term.

Who Should Invest in Medium to Long-Duration Mutual Funds?

Medium to Long Duration Mutual Funds are ideal for investors with a moderate risk appetite and a time horizon of 3 to 5 years or more. These individuals seek stable income while tolerating short-term volatility from interest rate fluctuations.

These funds suit those aiming for better returns than short-duration funds while accepting some risk from market trends. They are especially appropriate for investors looking to balance their portfolios with a mix of income-generating debt instruments and growth-oriented assets.

Impact of Fund Manager Expertise on Medium to Long Duration Mutual Funds Performance

The expertise of a fund manager significantly impacts the performance of Medium to Long Duration Mutual Funds. A skilled manager can strategically navigate interest rate fluctuations, credit risks and market conditions to optimize returns while minimizing potential losses.

A knowledgeable fund manager ensures effective portfolio construction, selecting high-quality bonds and adjusting duration based on economic trends. Their ability to make timely decisions, such as adjusting exposure to interest rate-sensitive assets, can enhance fund performance and stability over time.

How Much Money Should I Invest In Medium to Long-Duration Mutual Funds?

The amount to invest in Medium to Long Duration Mutual Funds depends on your financial goals, risk tolerance and investment horizon. Typically, allocating 10-20% of your portfolio to these funds can provide balance and moderate risk exposure.

Consider your liquidity needs and overall asset allocation. If seeking a steady income with moderate risk, increase the allocation. However, for more growth-oriented goals, limit your investment to avoid overexposure to interest rate risks and market volatility.

Taxation On Medium to Long Duration Mutual Funds

Medium to Long Duration Mutual Funds are taxed as debt funds. If held for less than three years, short-term capital gains are taxed at your applicable income tax slab rate, which varies based on your income level.

For investments held longer than three years, long-term capital gains are taxed at 20%, with the benefit of indexation. This reduces the taxable amount by adjusting the purchase price for inflation, potentially lowering your overall tax liability.

FAQs – Medium to Long Duration Mutual Funds List

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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.