Medium Duration Debt funds are specifically those mutual funds that exclusively invest in medium duration debt securities (debt instruments with a duration of 3-4 years), with the primary objective to ensure the stability of returns.
The goal of these funds is not to generate the highest returns possible, but rather to minimize volatility, and safeguard the capital that you’ve generated over the course of your investment journey.
Read on to know about the 10 best medium duration debt funds in India, who should invest, tax implications, returns and risks.
Fund Name | Risk | 1 Year Returns | Fund Size |
SBI Magnum Medium Duration Fund | Moderately High | 5.6% | ₹10,743 crores |
HDFC Medium Term Debt Fund | Moderately High | 6.7% | ₹4,217 crores |
ICICI Prudential Medium Term Bond Fund | Moderately High | 6.7% | ₹7,093 crores |
Axis Strategic Bond Fund | Moderate | 6.6% | ₹1,851 crores |
L&T Resurgent India Bond Fund | Moderate | 6.2% | ₹1,296 crores |
Kotak Medium Term Fund | Moderately High | 7.3% | ₹3,055 crores |
IDFC Bond Fund | Low/Moderate | 4.8% | ₹2,658 crores |
BNP Paribas Medium Term Debt Fund | Moderate | 4.3% | ₹20 crores |
Nippon India Strategic Debt Fund | High | 19.1% | ₹237 crores |
Sundaram Medium Term Fund | Moderate | 3.9% | ₹63 crores |
If you’re someone with a moderate risk appetite, and are looking to protect the wealth that you’ve already generated while still earning a healthy return, medium-term debt funds are for you.
These are great alternatives to fixed deposits, or other savings schemes, as they tend to generate higher returns. It is suitable for people looking to earn a steady return over a medium tenure.
Here are 4 tips to keep in mind before investing in medium-term debt funds:
Medium Term Debt Funds are taxable just like any other mutual fund investments.
As with all investments, Medium Term funds also come with associated risks. These medium-term funds are usually considered conservative (moderate risks) and come with lesser risk, as compared to Equity funds.
These mutual funds usually generate a healthy return of around 6% annually. While you can’t expect to beat inflation rates, you can consistently attempt to match the inflation rate of our country.
Compared to other investments, like fixed deposits and other savings schemes (which average about 4% return on investment), Medium duration mutual funds are considerably more attractive.
Medium duration funds are great if you want to generate wealth, minimize volatility, and safeguard the capital. Set a goal and research the past performance of the fund before investing. While there are many benefits to investing in medium-duration funds, it is also subject to market risks and tax. Talk to a seasoned expert or visit Navi Mutual Fund to start investing.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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