Top Performing Corporate Bond Funds in 10 Years

The below table shows a list Of the Top Performing Corporate Bond Funds in 10 Years Based on AUM, NAV, and minimum SIP.

Introduction to Top Performing Corporate Bond Funds in 10 Years

HDFC Corporate Bond Fund

HDFC Corporate Bond Fund is a Corporate Bond mutual fund scheme from HDFC Mutual Fund. This fund has been operational for 11 years and 8 months, having been 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%, an exit load of 0%, and an expense ratio of 0.36%. The SEBI risk category is Moderate. Its asset allocation includes 70.62% in Corporate Debt, 25.65% in Government Securities, 3.42% in Cash & Equivalents, 0.25% in Secured Debt, and 0.06% in Others.

ICICI Prudential Corporate Bond Fund

ICICI Prudential Corporate Bond Fund is a Corporate Bond mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been operational for 11 years and 7 months, having been 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%, an exit load of 0%, and an expense ratio of 0.35%. The SEBI risk category is Moderate. Its asset allocation includes 73.92% in Corporate Debt, 20.27% in Government Securities, 1.57% in Cash & Equivalents, 0.23% in Certificate of Deposit, and 4.01% in Others.

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 has been operational for 11 years and 8 months, having been 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%, an exit load of 0%, and an expense ratio of 0.34%. The SEBI risk category is Moderate. Its asset allocation includes 64.22% in Corporate Debt, 28.15% in Government Securities, 3.84% in Cash & Equivalents, 0.62% in Floating-rate Debt, and 3.17% in Others.

Kotak Corporate Bond Fund

Kotak Corporate Bond Fund is a Corporate Bond mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 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%, an exit load of 0%, and an expense ratio of 0.34%. The SEBI risk category is Moderate. Its asset allocation includes 66.02% in Corporate Debt, 29.48% in Government Securities, 2.81% in Cash & Equivalents, 1.45% in Secured Debt, and 0.24% in Others.

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%, an exit load of 0%, and an expense ratio of 0.30%. The SEBI risk category is Moderate. Its asset allocation includes 79.61% in Corporate Debt, 20.02% in Government Securities, 0.30% in Cash & Equivalents, and 0.07% in Others.

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%, an exit load of 0%, and an expense ratio of 0.30%. The SEBI risk category is Moderate. Its asset allocation includes 67.60% in Corporate Debt, 28.45% in Government Securities, 0.87% in Cash & Equivalents, 0.24% in Floating-rate Debt, and 2.84% in Others.

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 5 years and 1 month, having been 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%, an exit load of 0%, and an expense ratio of 0.29%. The SEBI risk category is Moderate. Its asset allocation includes 69.50% in Corporate Debt, 26.92% in Government Securities, 3.34% in Cash & Equivalents, and 0.24% in Others.

Nippon India Corporate Bond Fund

Nippon India Corporate Bond Fund is a Corporate Bond mutual fund scheme from Nippon India Mutual Fund. This fund has been operational for 11 years and 8 months, having been 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%, an exit load of 0%, and an expense ratio of 0.35%. The SEBI risk category is Moderate. Its asset allocation includes 69.25% in Corporate Debt, 25.95% in Government Securities, 4.56% in Cash & Equivalents, and 0.24% in Others.

Sundaram Corporate Bond Fund

Sundaram Corporate Bond Fund is a Corporate Bond mutual fund scheme from Sundaram Mutual Fund. This fund has been operational for 11 years and 3 months, having been launched on May 13, 2013.

Sundaram Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹710.05 crores, a 5-year CAGR of 6.75%, an exit load of 0%, and an expense ratio of 0.32%. The SEBI risk category is Moderate. Its asset allocation includes 70.33% in Corporate Debt, 26.10% in Government Securities, 3.20% in Cash & Equivalents, and 0.38% in Others.

PGIM India Corporate Bond Fund

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

PGIM India Corporate Bond Fund falls under the Corporate Bond Fund category with an AUM of ₹97.11 crores, a 5-year CAGR of 6.88%, an exit load of 0%, and an expense ratio of 0.29%. The SEBI risk category is Moderate. Its asset allocation includes 70.15% in Corporate Debt, 25.00% in Government Securities, 4.48% in Cash & Equivalents, and 0.36% in Others.

What Are Corporate Bond Funds?

Corporate Bond Funds are mutual funds that primarily invest in fixed-income securities issued by corporations. These funds aim to provide investors with regular income and capital preservation by investing in a diversified portfolio of corporate bonds with varying credit ratings and maturities.

Corporate Bond Funds typically offer higher yields compared to government bond funds, as corporate bonds generally carry higher risk than government securities. The fund managers actively manage the portfolio to balance risk and return.

These funds can be suitable for investors seeking relatively stable returns with moderate risk. They offer exposure to a diversified range of corporate bonds, which might be difficult for individual investors to achieve on their own.

Features Of Top Performing Corporate Bond Funds in 10 Years

The main features of Top Performing Corporate Bond Funds in 10 Years include consistent returns, professional management, diversification, higher yield potential, and moderate risk profile. These funds have demonstrated strong performance over an extended period.

• Consistent Returns: These funds have shown the ability to generate steady returns over a 10-year period, often outperforming their benchmarks.

• Professional Management: Experienced fund managers actively manage the portfolio, making decisions on credit quality, duration, and sector allocation.

• Diversification: Top-performing funds typically hold a diversified portfolio of corporate bonds across various sectors and credit ratings.

• Higher Yield Potential: Corporate bonds often offer higher yields compared to government securities, potentially leading to better returns.

• Moderate Risk Profile: While riskier than government bond funds, corporate bond funds generally have a moderate risk profile compared to equity funds.

Best Performing Corporate Bond Funds in 10 Years

The table below shows the Best Performing Corporate Bond Funds in 10 Years Based on the lowest to highest expense ratio.

Top Performing Corporate Bond Funds in 10 Years In India

The table below shows the Top Performing Corporate Bond Funds in 10 Years In India Based on the Highest 3Y CAGR.

Top Performing Corporate Bond Funds in 10 Years List 

The table below shows the Top Performing Corporate Bond Funds in the 10 Years List 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 10 Years

The main factors to consider when investing in Top Performing Corporate Bond Funds in 10 Years include credit quality, yield, duration, expense ratio, and fund manager expertise. These factors can significantly impact the fund’s performance and risk profile.

• Credit Quality: Assess the credit ratings of the bonds in the fund’s portfolio. Higher-rated bonds generally offer lower risk but also lower yields.

• Yield: Compare the yields offered by different funds. Higher yields often come with higher risk, so balance yields with your risk tolerance.

• Duration: Consider the fund’s average duration. Longer duration funds are more sensitive to interest rate changes, offering higher potential returns but also higher risk.

• Expense Ratio: Look for funds with lower expense ratios, as these costs can impact your overall returns over time.

• Fund Manager Expertise: Evaluate the fund manager’s experience and track record in managing corporate bond portfolios over long periods.

How To Invest In Top Performing Corporate Bond Funds in 10 Years?

To invest in Top Performing Corporate Bond Funds in 10 Years, start by researching funds with a strong long-term track record. Consider factors like consistent performance, credit quality of holdings, and expense ratios. Determine the amount you wish to invest based on your financial goals and risk tolerance.

Open an account with Alice Blue. Complete the necessary KYC (Know Your Customer) procedures. Choose your preferred Corporate Bond Fund and decide whether you want to invest via lump sum or through a Systematic Investment Plan (SIP).

If opting for SIP, set up automatic transfers from your bank account. This can help you benefit from rupee cost averaging. Regularly review your investment’s performance and consider rebalancing your portfolio if needed. Stay invested for the long term to potentially benefit from compounding returns.

Advantages Of Investing In Top Performing Corporate Bond Funds in 10 Years?

The main advantages of investing in Top Performing Corporate Bond Funds in 10 Years include consistent returns, higher yield potential, professional management, diversification, and relatively lower risk compared to equity funds. These funds offer a balance of income and capital preservation.

• Consistent Returns: These funds have demonstrated the ability to generate steady returns over a long period, often outperforming fixed deposits.

• Higher Yield Potential: Corporate bonds typically offer higher yields than government securities, potentially leading to better overall returns.

• Professional Management: Experienced fund managers actively manage the portfolio, making informed decisions on credit quality and duration.

• Diversification: These funds provide exposure to a diversified portfolio of corporate bonds across various sectors and credit ratings.

• Moderate Risk: While riskier than government bond funds, corporate bond funds generally have lower risk compared to equity funds.

Risks Of Investing In Top Performing Corporate Bond Funds in 10 Years?

The main risks of investing in Top Performing Corporate Bond Funds in 10 Years include credit risk, interest rate risk, liquidity risk, concentration risk, and the potential for underperformance. Investors should be aware of these risks when considering investments in corporate bond funds.

• Credit Risk: There’s a risk of default by bond issuers, which could lead to loss of principal and interest payments.

• Interest Rate Risk: Bond prices typically fall when interest rates rise, potentially impacting the fund’s returns, especially for longer-duration funds.

• Liquidity Risk: Some corporate bonds may be less liquid, potentially affecting the fund’s ability to buy or sell securities at desired prices.

• Concentration Risk: If a fund is heavily concentrated in specific sectors or issuers, it may be more vulnerable to sector-specific or company-specific risks.

• Underperformance Risk: Past performance doesn’t guarantee future results. Even top-performing funds may underperform in certain market conditions.

Importance of Corporate Bond Funds

The main importance of Corporate Bond Funds lies in their ability to provide regular income, offer potential for capital appreciation, provide diversification benefits, offer exposure to corporate debt markets, and serve as a middle ground between low-yield government bonds and high-risk equity funds.

• Regular Income: These funds aim to provide steady income through interest payments from the underlying corporate bonds.

• Capital Appreciation: There’s potential for capital appreciation if bond prices increase due to factors like falling interest rates.

• Diversification: Corporate Bond Funds can help diversify an investment portfolio, potentially reducing overall portfolio risk.

• Corporate Debt Exposure: These funds offer retail investors access to the corporate debt market, which might be difficult to achieve individually.

• Balanced Risk-Return: They offer a balance between the lower risk of government bonds and the higher risk-return potential of equity funds.

How Long to Stay Invested in Corporate Bond Funds?

The ideal investment horizon for Corporate Bond Funds is typically 3-5 years. This duration allows investors to potentially benefit from the interest income and any capital appreciation while riding out short-term market fluctuations. It also aligns with the medium-term nature of many corporate bonds.

However, the exact investment duration can vary based on your financial goals and the specific characteristics of the fund. Some investors may choose to hold these funds for longer periods as part of a diversified portfolio strategy.

Tax Implications of Investing in Corporate Bond Funds

Investments in Corporate Bond Funds are subject to taxation based on the holding period. For holdings up to 3 years, gains are treated as short-term capital gains and taxed at your income tax slab rate. For holdings over 3 years, gains are treated as long-term capital gains and taxed at 20% with indexation benefits.

Dividends received from Corporate Bond Funds, if any, are taxable in the hands of investors at their applicable income tax slab rates. It’s advisable to consult a tax professional for personalized advice based on your specific financial situation.

Future of Corporate Bond Funds

The future of Corporate Bond Funds looks promising as they continue to offer a balance between risk and return in the fixed-income space. With potentially improving corporate profitability and economic growth, these funds may offer attractive yields to investors seeking regular income.

As the Indian bond market develops and becomes more liquid, we may see increased variety and sophistication in Corporate Bond Funds. However, investors should remain aware of credit risks and potential regulatory changes that could impact this sector.

Why Are Corporate Bond Issuances Falling Amid Market Uncertainty?

Corporate bond issuances may fall during periods of market uncertainty due to several factors. Companies may be hesitant to take on new debt in uncertain economic conditions. Investors might demand higher yields, making it more expensive for companies to issue bonds. Additionally, alternative funding sources like bank loans might become more attractive in certain market conditions.

This trend can impact Corporate Bond Funds by potentially reducing the supply of new bonds and affecting yields. However, experienced fund managers can navigate these challenges by adjusting portfolio strategies and seeking opportunities in the secondary market.

Top Performing Corporate Bond Funds in 10 Years FAQs  

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.