Best Corporate Bond Fund

  • What are corporate bonds?
    Corporate bond funds primarily invest in debt securities. Debt papers issued by companies include company bonds, debentures, commercial papers, and structured obligations. Each of these components has a distinct risk profile, and the maturity date varies. Corporate bonds funds, according to the Securities and Exchange Board of India (SEBI), are those that invest at least 80 per cent of their total assets in corporate bonds with the highest credit rating.

Below are some of the best corporate bonds.

Best Debt MF (Corporate Bond)

Here is the list of best equity MF in last one year

  • What returns you can expect?
    Because these funds invest mostly in the highest-rated papers, you may expect an average return of 8 per cent to 10 per cent. Furthermore, its returns are heavily dependent on the fund's investing strategy.
  • What are the underlying risks?
    This fund, like any other debt fund, is subject to interest rate risk. However, if the fund employs an accrual technique, interest rate risk will not be detrimental. Despite the fact that they invest primarily in the highest-rated corporate bonds, credit default risk is unavoidable. Remember the IL&FS case? Despite having the highest rating, it failed. Though such instances are uncommon, they must not be overlooked.
  • What investment horizon is suited for corporate bond funds?
    Because they typically engage in corporate debt securities with an average term of three years, a corporate bond fund's investment horizon should be three years or longer.
  • Who should invest in them?
    Corporate bonds are a good option for investors seeking a stable but higher income than bank fixed deposits. Corporate bond funds that invest in high-quality debt products can better suit your financial goals. When interest rates change beyond expectations, long-term debt funds can become riskier. As a result, corporate bond funds invest in securities to counteract volatility. This can be a bonus if you stay invested for at least three years.

Mutual Fund News

  • Back to top