Top Performing Corporate Bond Funds in 1 Year

The below table shows a list Of the Best Corporate Bond Funds Based on AUM, NAV, and minimum SIP.

Introduction to Top Performing Corporate Bond Funds in 1 Year

HDFC Corp Bond Fund

HDFC Corporate Bond Fund Direct Plan-Growth is a Corporate Bond 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 Corporate Bond Fund as a Corporate bond fund, manages assets valued at ₹29,726.31 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.06%. This fund has no exit load and an expense ratio of 0.36%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 96.61%, and Other – 3.4%.

Aditya Birla SL Corp Bond Fund

Aditya Birla Sun Life Corporate Bond Fund Direct-Growth is a Corporate Bond 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 Sun Life Corporate Bond Fund as a Corporate bond fund, manages assets valued at ₹20,993.53 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.24%. This fund has no exit load and an expense ratio of 0.34%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 96.21%, and Other – 3.79%.

Kotak Corporate Bond Fund

Kotak Corporate Bond Fund Direct-Growth is a Corporate Bond 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 Corporate Bond Fund as a Corporate bond fund, manages assets valued at ₹13,506.55 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.75%. This fund has no exit load and an expense ratio of 0.34%. According to SEBI, it falls under the Moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt – 97.19%, and Other – 2.81%.

Axis Corp Debt Fund

Axis Corporate Debt Fund Direct-Growth is a Corporate Bond mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 7 years and 2 months, having been launched on 23/06/2017.

Axis Corporate Debt Fund as a Corporate bond fund, manages assets valued at ₹5,511.39 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.42%. This fund has no exit load and an expense ratio of 0.3%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 98.2%, and Other – 1.8%.

Nippon India Corp Bond Fund

Nippon India Corporate Bond Fund Direct-Growth is a Corporate Bond 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 Corporate Bond Fund as a Corporate bond fund, manages assets valued at ₹3,287.78 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.07%. This fund has no exit load and an expense ratio of 0.35%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 95.47%, and Other – 4.53%.

Kotak Nifty SDL Apr 2032 Top 12 Equal Weight Index Fund

Kotak Nifty SDL Apr 2032 Top 12 Equal Weight Index Fund Direct-Growth is a Target Maturity mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 2 years and 7 months, having been launched on 04/02/2022. 

Kotak Nifty SDL Apr 2032 Top 12 Equal Weight Index Fund as a Corporate bond fund, manages assets valued at ₹2,833.12 crore. Over the past year, it has achieved a return of 9.01%. This fund has no exit load and an expense ratio of 0.2%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 97.32%, and Other – 2.68%.

Tata Corp Bond Fund

Tata Corporate Bond Fund Direct-Growth is a Corporate Bond mutual fund scheme from Tata Mutual Fund. This fund has been in existence for 2 years and 9 months, having been launched on 22/11/2021.

Tata Corporate Bond Fund as a Corporate bond fund, manages assets valued at ₹1,778.93 crore. Over the past 1 year, it has achieved a return of 8.36%. This fund has no exit load and an expense ratio of 0.32%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 97.09%, and Other – 2.91%.

Tata Nifty SDL Plus AAA PSU Bond Dec 2027 60:40 Index Fund

Tata Nifty SDL Plus AAA PSU Bond Dec 2027 60:40 Index Fund Direct-Growth is a Target Maturity mutual fund scheme from Tata Mutual Fund. This fund has been in existence for 2 years and 5 months, having been launched on 24/03/2022. 

Tata Nifty SDL Plus AAA PSU Bond Dec 2027 60:40 Index Fund as a Corporate bond fund, manages assets valued at ₹861.73 crore. Over the past 1 year, it has achieved a return of 8.27%. This fund has no exit load and an expense ratio of 0.22%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 96.94%, and Other – 3.06%.

Kotak Nifty SDL Plus AAA PSU Bond Jul 2028 60:40 Index Fund

Kotak Nifty SDL Plus AAA PSU Bond Jul 2028 60:40 Index Fund Direct-Growth is a Target Maturity mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 1 year 11 months, having been launched on 29/09/2022.

Kotak Nifty SDL Plus AAA PSU Bond Jul 2028 60:40 Index Fund as a Corporate bond fund, manages assets valued at ₹575.76 crore. Over the past 1 year, it has achieved a return of 8.28%. This fund has no exit load and an expense ratio of 0.21%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 96.01%, and Other – 3.99%.

Baroda BNP Paribas Corp Bond Fund

Baroda BNP Paribas Corporate Bond Fund Direct-Growth is a Corporate Bond mutual fund scheme from Baroda Bnp Paribas Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Baroda BNP Paribas Corporate Bond Fund as a Corporate bond fund, manages assets valued at ₹168.38 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.26%. This fund has no exit load and an expense ratio of 0.2%. According to SEBI, it falls under the Moderate category. The fund’s asset allocation comprises: No Equity, Debt – 96.72%, and Other – 3.28%.

What Are Corporate Bond Funds?

Corporate bond funds are investment vehicles that pool money from multiple investors to purchase bonds issued by corporations. These funds offer diversification by investing in a range of corporate bonds with various maturities and credit qualities.

These funds generate income through interest payments on the bonds they hold, which are typically distributed to investors. They can provide higher returns compared to government bond funds but come with greater risk.

Investors in corporate bond funds benefit from professional management and diversification. However, they should be aware of credit risk, interest rate risk, and the fund’s expense ratio.

Features Of Top Performing Corporate Bond Funds in 1 Year

The main features of top-performing corporate bond funds in 1 year include strong yield, credit quality, diversification, and management expertise.

• Strong Yield: These funds typically offer competitive yields due to their focus on high-quality corporate bonds with attractive interest rates, providing better returns.
• Credit Quality: They invest in bonds with higher credit ratings, reducing the risk of default and ensuring more stable returns over the year.
• Diversification: Top-performing funds hold a diversified portfolio of corporate bonds, spreading risk across various issuers and sectors, which helps stabilize returns.
• Management Expertise: Skilled fund managers use strategic selection and timing to maximize returns and manage risks, contributing to the fund’s strong performance over the year.

Best Performing Corporate Bond Funds in 1 Year

The table below shows the Best-performing Corporate Bond Funds Based on the highest to lowest expense ratio.

Top Performing Corporate Bond Funds in 1 Year In India

The table below shows the Best Corporate Bond Funds Based on the Highest 3Y CAGR.

List of Performing Corporate Bond Funds in 1 Year

The table below shows the Best Performing Corporate Bond Funds In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Factors To Consider When Investing In Top Performing Corporate Bond Funds in 1 Year

The main factors to consider when investing in top-performing corporate bond funds for 1 year include fund performance history, credit risk, interest rate sensitivity, and fund management.

• Fund Performance History: Review past performance to gauge consistency and returns, but remember it doesn’t guarantee future results. Historical performance helps assess the fund’s reliability.
• Credit Risk: Evaluate the credit quality of bonds within the fund. Higher-rated bonds typically have lower risk, while lower-rated ones offer higher yields but come with increased risk.
• Interest Rate Sensitivity: Understand how changes in interest rates affect the fund. Corporate bond funds are sensitive to rate changes, which can impact returns, especially in a rising interest rate environment.
• Fund Management: Consider the experience and track record of the fund managers. Skilled managers are crucial for selecting high-quality bonds and navigating market conditions effectively.

How To Invest In Top Performing Corporate Bond Funds in 1 Year?

To invest in top-performing corporate bond funds over 1 year, start by researching funds with strong historical performance and favorable credit ratings. Review fund details such as yield, duration, and fees to find the best fit for your investment goals.

Open an account with Alice Blue, it offers access to a range of corporate bond funds. Evaluate the firm’s services, fees, and platform ease-of-use to ensure it meets your investment needs.

Invest in the selected funds through your brokerage account. Monitor the fund’s performance regularly and stay informed about market conditions to make any necessary adjustments to your investment strategy.

Advantages Of Investing In Top Performing Corporate Bond Funds in 1 Year

The main advantages of investing in top-performing corporate bond funds over 1 year include stable returns, income generation, diversification, and professional management.

• Stable Returns: These funds often provide consistent returns due to investing in high-quality corporate bonds with lower default risk, offering more predictable income.
• Income Generation: Corporate bond funds typically pay regular interest, which can be a reliable source of income. This can be particularly appealing for income-focused investors.
• Diversification: Investing in these funds allows exposure to a wide range of corporate bonds, spreading risk across various issuers and sectors, which helps reduce overall investment risk.
• Professional Management: Experienced fund managers actively select and manage the bonds in the portfolio, applying expertise to optimize returns and handle market fluctuations effectively.

Risks Of Investing In The Best Performing Corporate Bond Funds in 1 Year

The main risks of investing in top-performing corporate bond funds over 1 year include interest rate risk, credit risk, market risk, and liquidity risk. Each of these factors can impact the performance and value of your investment in different ways.

• Interest Rate Risk: As interest rates rise, bond prices generally fall, which can reduce the value of corporate bond funds. This risk is particularly relevant in a rising rate environment and can impact the fund’s returns.
• Credit Risk: Corporate bonds may be downgraded or defaulted, especially if the issuing company faces financial difficulties. This can lead to a loss of principal or reduced income, affecting the fund’s overall performance and stability.
• Market Risk: Economic downturns or market volatility can affect the bond market, leading to fluctuations in the value of the fund. Poor market conditions can impact returns and increase the potential for losses.
• Liquidity Risk: Some corporate bonds may be harder to sell quickly at a fair price, affecting the fund’s ability to redeem shares or adjust holdings without significant impact on prices, potentially influencing overall fund performance.

Importance of Corporate Bond Funds

Corporate bond funds are crucial for diversifying investment portfolios by providing exposure to corporate bonds, which can offer higher returns compared to government securities. They help investors access a broad range of bonds, balancing risk and reward effectively.

These funds generate regular income through interest payments, making them attractive for income-seeking investors. They also benefit from professional management, which aims to optimize returns while managing risks associated with corporate bonds.

How Long to Stay Invested in Corporate Bond Funds?

The ideal investment duration in corporate bond funds depends on individual financial goals and market conditions. Typically, a 1 to 3-year horizon aligns with short-term income needs, while longer durations may suit those seeking steady income over several years.

Consider staying invested through market fluctuations to benefit from potential interest payments and capital appreciation. Regularly review your investment strategy and market conditions to make adjustments if needed, ensuring alignment with your financial objectives.

Tax Implications of Investing in Corporate Bond Funds

Investing in corporate bond funds can have tax implications such as taxation on interest income, which is usually taxed at your ordinary income tax rate. This can impact your overall returns depending on your income tax bracket.

Additionally, capital gains from selling bond funds are taxed based on the holding period. Short-term gains are taxed at higher rates than long-term gains, so consider the holding period to optimize tax efficiency.

Future of Corporate Bond Funds

The future of corporate bond funds is likely to be shaped by evolving interest rates and economic conditions. As companies seek capital, these funds could offer attractive yields, especially if interest rates stabilize or decline, benefiting long-term investors.

Technological advancements and increased investor demand for diverse income sources might drive innovation in corporate bond funds. Enhanced analytics and strategies could improve risk management and return potential, making them increasingly appealing in a dynamic market environment.

Top Performing Corporate Bond Funds in 1 Year FAQs  

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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.