Top Performing Floating Rate Funds in 1 Year

The table below shows Top Performing Floating Rate Funds in 1 Year based on AUM, NAV and Minimum SIP.

Introduction to Top Performing Floating Rate Funds in 1 Year

HDFC Floating Rate Debt Fund

HDFC Floating Rate Debt Fund is a Floating Rate Fund with an AUM of ₹15,189.39 Crores, a 5-year CAGR of 7.02% and an expense ratio of 0.26%, with no exit load.

HDFC Floating Rate Debt Fund Direct Plan-Growth is a Debt Mutual Fund Scheme launched by HDFC Mutual Fund. This scheme was made available to investors on 10 Dec 1999. The fund allocates 96.2% to debt and 3.8% to cash, with no equity exposure, primarily focusing on debt investments with a small liquidity buffer.

Aditya Birla SL Floating Rate Fund

Aditya Birla SL Floating Rate Fund is a Floating Rate Fund with an AUM of ₹12,399.83 Crores, a 5-year CAGR of 6.68% and an expense ratio of 0.23%, with no exit load.

Aditya Birla Sun Life Floating Rate Direct Fund Growth is a Debt Mutual Fund Scheme launched by Aditya Birla Sun Life Mutual Fund. This scheme was made available to investors on 23 Dec 1994. The fund holds 96.9% in debt and 3.1% in cash, with no equity exposure, maintaining a strong debt allocation with minimal cash for liquidity.

ICICI Pru Floating Interest Fund

ICICI Pru Floating Interest Fund is a Floating Rate Fund with an AUM of ₹9,136.23 Crores, a 5-year CAGR of 7.51% and an expense ratio of 0.56%, with no exit load.

ICICI Prudential Floating Interest Fund Direct Plan-Growth is a Debt Mutual Fund Scheme launched by ICICI Prudential Mutual Fund. This scheme was made available to investors on 12 Oct 1993. The fund’s asset allocation includes 94.7% in debt and 5.3% in cash, with no equity exposure, emphasizing debt holdings with moderate liquidity.

Nippon India Floating Rate Fund

Nippon India Floating Rate Fund is a Floating Rate Fund with an AUM of ₹7,817.10 Crores, a 5-year CAGR of 7.14% and an expense ratio of 0.31%, with no exit load.

Nippon India Floating Rate Fund Direct Growth is a Debt Mutual Fund Scheme launched by Nippon India Mutual Fund. This scheme was made available to investors on 30 Jun 1995. The fund allocates 94.8% to debt and 5.2% to cash, with no equity exposure, focusing on debt investments with a moderate cash reserve.

Kotak Floating Rate Fund

Kotak Floating Rate Fund is a Floating Rate Fund with an AUM of ₹4,176.27 Crores, a 5-year CAGR of 7.06% and an expense ratio of 0.24%, with no exit load.

Kotak Floating Rate Fund Direct Growth is a Debt Mutual Fund Scheme launched by Kotak Mahindra Mutual Fund. This scheme was made available to investors on 05 Aug 1994. The fund holds 97.6% in debt and 2.4% in cash, with no equity exposure, emphasizing a debt-heavy portfolio with minimal liquidity.

UTI Floater Fund

UTI Floater Fund is a Floating Rate Fund with an AUM of ₹1,382.47 Crores, a 5-year CAGR of 6.27% and an expense ratio of 0.42%, with no exit load.

UTI Floater Fund Direct-Growth is a Debt Mutual Fund Scheme launched by UTI Mutual Fund. This scheme was made available to investors on 14 Nov 2002. The fund’s allocation includes 90% in debt and 10% in cash, with no equity exposure, focusing primarily on debt investments with a moderate liquidity reserve.

SBI Floating Rate Debt Fund

SBI Floating Rate Debt Fund is a Floating Rate Fund with an AUM of ₹1,126.76 Crores and an expense ratio of 0.26%, with an exit load of 0.1%.

SBI Floating Rate Debt Fund Direct Growth is a Debt Mutual Fund Scheme launched by SBI Mutual Fund. This scheme was made available to investors on 29 Jun 1987. The fund allocates 95.8% to debt and 4.2% to cash, with no equity exposure, maintaining a strong focus on debt with minimal liquidity.

DSP Floater Fund

DSP Floater Fund is a Floating Rate Fund with an AUM of ₹876.12 Crores and an expense ratio of 0.25%, with no exit load.

DSP Floater Fund Direct-Growth is a Debt Mutual Fund Scheme launched by DSP Mutual Fund. This scheme was made available to investors on 16 Dec 1996. The fund holds 98.9% in debt and 1.1% in cash, with no equity exposure, emphasizing debt investments with a small liquidity reserve.

Franklin India Floating Rate Fund

Franklin India Floating Rate Fund is a Floating Rate Fund with an AUM of ₹306.74 Crores, a 5-year CAGR of 6.56% and an expense ratio of 0.23%, with no exit load.

Franklin India Floating Rate Fund Direct-Growth is a Debt Mutual Fund Scheme launched by Franklin Templeton Mutual Fund. This scheme was made available to investors on 19 Feb 1996. The fund’s allocation includes 98.6% in debt and 1.4% in cash, with no equity exposure, focusing heavily on debt with a small liquidity buffer.

Bandhan Floating Rate Fund

Bandhan Floating Rate Fund is a Floating Rate Fund with an AUM of ₹277.49 Crores,   and an expense ratio of 0.31%, with no exit load.

Bandhan Floating Rate Fund Direct-Growth is a Debt Mutual Fund Scheme launched by Bandhan Mutual Fund. This scheme was made available to investors on 20 Dec 1999. The fund allocates 94.5% to debt and 5.5% to cash, with no equity exposure, offering a strong debt-focused portfolio with moderate liquidity.

What Are Floating Rate Funds?

Floating Rate Funds are debt mutual funds that invest primarily in instruments with variable interest rates, which adjust periodically based on market rates. These funds aim to benefit from rising interest rates and provide more stable returns compared to fixed-rate debt funds.

Features Of Top Performing Floating Rate Funds in 1 Year

The main features of top-performing floating rate funds in 1 year include variable interest rate exposure, low sensitivity to interest rate fluctuations, a mix of high-quality instruments and the potential for better returns in a rising interest rate environment.

• Variable Interest Rate Exposure: Floating rate funds invest in securities whose interest rates adjust with market rates, allowing the portfolio to potentially benefit from rising rates while limiting the impact of rate changes.

• Low Sensitivity to Interest Rates: These funds typically have lower interest rate risk compared to fixed-rate funds, making them more stable in volatile interest rate environments and offering relatively steady returns.

• High-Quality Instruments: Top-performing funds usually invest in high-quality debt instruments like government securities, corporate bonds and money market instruments, ensuring lower credit risk.

• Better Returns in Rising Rate Cycles: Floating rate funds tend to outperform in rising interest rate scenarios as the coupon payments on their holdings adjust upwards, offering better returns than traditional fixed-rate debt funds.

Best Performing Floating Rate Funds in 1 Year

The table below shows Best Performing Floating Rate Funds in 1 Year based on Expense Ratio and Minimum SIP.

Top Performing Floating Rate Funds in 1 Year In India

The table below shows Top Performing Floating Rate Funds in 1 Year In India based on CAGR 3Y and Minimum SIP. 

Top Performing Floating Rate Funds in 1 Year List 

The table below shows Top Performing Floating Rate Funds in 1 Year List based on Exit Load and AMC.

Factors To Consider When Investing In Top Performing Floating Rate Funds in 1 Year

The main factors to consider when investing in top-performing floating rate funds include interest rate trends, portfolio composition, fund manager expertise and expense ratio. These factors can significantly impact your returns and the overall risk profile of the fund.

• Interest Rate Trends: Evaluate current and expected interest rate movements. Floating rate funds perform better in a rising interest rate environment as the rates on their investments adjust upwards.

• Portfolio Composition: Check the quality and diversity of instruments in the fund’s portfolio. A well-diversified portfolio with high-quality instruments offers better stability and reduces credit risk.

• Fund Manager Expertise: The performance of floating rate funds depends on the manager’s ability to navigate interest rate changes. Choose funds managed by experienced professionals with a solid track record.

• Expense Ratio: Lower expense ratios directly impact the returns, especially in a low-yield environment. Compare the expense ratios of different floating-rate funds to maximize your net returns.

How To Invest In Top Performing Floating Rate Funds in 1 Year?

To invest in top-performing floating rate funds, research funds based on past performance, portfolio composition and expense ratio. Choose funds aligned with your financial goals and risk tolerance. You can invest via lump sum or SIP through Alice Blue.

Advantages Of Investing In Top Performing Floating Rate Funds in 1 Year

The main advantages of investing in top-performing floating rate funds include low interest rate sensitivity, potential for rising returns, lower volatility and liquidity. These funds are well-suited for conservative investors seeking stable returns in a rising interest rate environment.

• Low Interest Rate Sensitivity: Since the interest rates on floating rate funds adjust periodically, they are less impacted by rate fluctuations, providing more stable returns compared to fixed-rate funds.

• Potential for Rising Returns: In a rising interest rate scenario, these funds can offer better returns as the interest on the underlying instruments adjusts upwards.

• Lower Volatility: With floating rates, the risk of sharp declines in returns is reduced, making these funds a more stable option for conservative investors.

• Liquidity: Floating rate funds typically invest in short-term, high-quality instruments, offering better liquidity and easy redemption for investors when needed.

Risks Of Investing In Top Performing Floating Rate Funds in 1 Year

The main risks of investing in top-performing floating rate funds include credit risk, reinvestment risk, lower returns in a falling rate environment and fund manager risk. While these funds are generally safer, investors should still be aware of potential challenges.

• Credit Risk: If the fund invests in lower-rated instruments, there is a risk of default, impacting returns. Ensure the portfolio has high-quality instruments.

• Reinvestment Risk: As short-term instruments mature, the fund may have to reinvest proceeds at lower rates, especially in a declining interest rate environment, affecting returns.

• Lower Returns in Falling Rates: In a falling interest rate scenario, floating rate funds may underperform as the rates on the underlying instruments adjust downward.

• Fund Manager Risk: The fund’s performance is highly dependent on the manager’s ability to select appropriate floating-rate securities and manage risks effectively.

Importance of Floating Rate Funds

The main importance of floating rate funds lies in their ability to offer protection against interest rate volatility, provide a balance of risk and return, act as a hedge in rising rate environments and ensure liquidity for short-term needs.

• Protection Against Rate Volatility: Floating rate funds adjust with market interest rates, providing investors with more stable returns compared to fixed-rate instruments during volatile rate movements.

• Balanced Risk and Return: These funds offer a balance between risk and return, making them suitable for conservative investors who prefer stability with the potential for better returns in rising rate scenarios.

• Hedge in Rising Rates: Floating rate funds are ideal for protecting portfolios during periods of rising interest rates, as the interest payments on the instruments adjust upwards.

• Liquidity for Short-Term Needs: With their investments in short-term debt instruments, these funds offer good liquidity, making them suitable for investors with short- to medium-term goals.

How Long to Stay Invested in Floating Rate Funds?

Floating rate funds are typically ideal for short- to medium-term investments, ranging from 1 to 3 years. This allows investors to take advantage of rising interest rates while maintaining liquidity for future financial goals or other opportunities.

However, the exact investment horizon depends on individual financial goals and market conditions. Regular reviews of the fund’s performance and interest rate trends are essential to ensure the investment aligns with your financial plan and risk tolerance.

Tax Implications of Investing in Floating Rate Funds

Floating rate funds are taxed as debt funds in India. If you hold these funds for less than 3 years, any gains are considered short-term capital gains and taxed at your applicable income tax rate.

For holding periods longer than 3 years, the gains are treated as long-term capital gains and taxed at 20% with indexation benefits. This indexation helps lower the tax burden by adjusting the purchase price for inflation.

Future of Floating Rate Funds

The future of floating rate funds looks promising, especially in rising interest rate environments where these funds can offer better returns. As investors seek stability and protection against rate volatility, the demand for floating-rate funds is likely to grow.

However, their performance will still depend on economic conditions and interest rate movements. With more financial innovations and better fund management strategies, floating-rate funds are expected to remain a key option for conservative and income-seeking investors.

Top Performing Floating Rate Funds in 1 Year 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.