1. JM Low Duration Fund Direct Plan Growth:
The fund receives a 5-star rating from Value Research and has an AUM size of Rs. 128.47 crores. The annualized return for the last 1 year is 25.09%. The expense ratio of the fund is 0.42 percent. The low-maturity fund of the house of JM Financial has low to moderate risk according to the risk-o-meter.
The fund’s corpus consists of 90% debt, of which more than 58% in G-securities. The benchmark for the fund is the CRISIL 10 year GILT Index. SIP in the fund can be started for just Rs. 500 while for a lump sum, the minimum investment is Rs. 5000.
2. Direct Growth HDFC Credit Risk Debt Fund:
This credit risk fund of the HDFC MF AMC has a 4-star rating from CRISIL. AUM of the fund are to the tune of Rs. 7367 crore. The fund assumes an expense ratio of 1.1 percent. Furthermore, the fund carries a moderate risk.
This MF option is particularly suitable for investors who can invest for a longer term, but prefer less risky assets compared to equity funds. The fund has nearly 90% debt investments. Against its benchmark CRISIL 10-year Gilt Index, which returned 3,915 last year, this HDFC credit risk fund delivered a return of 12.87%. The fund’s peers include Baroda Credit Risk Fund – Plan B (Direct) – Growth, Axis Credit Risk Fund – Direct Plan – Growth etc.
3. ICICI Prudential Medium Term Bond Fund Direct Plan Growth:
This Medium Duration fund from ICICI Prudential has a CRISIL 3-star rating. AUM under the fund total up to a whopping Rs. 6542.22 crore. The fund’s expense ratio is 0.74 percent. The fund has 95% investments in debt, of which 19 percent in G-securities. Relative to its benchmark, the fund offers a 1-year return of 11.01%.
Investors with a 1-3 year investment horizon and looking for alternatives to bank deposits can park their money in this MF. Risk-o-meter suggests that the fund carries medium risk. SIP in the fund can be started for Rs. 1000 while for lump sum investments a minimum of Rs. 5000 needed.
4. Direct growth of the SBI credit risk fund
This credit risk fund of SBI MF House has a fund size of Rs. 3496.77 crore. The fund’s expense ratio is 0.91 percent, while according to the risk-o-meter it is moderately risky. Compared to the fund benchmark CRISIL 10-Year GILT Index, the scheme’s 1-year return was 9.65%.
The fund is primarily invested in debt, ie over 92% percent. SIP in the fund can be started for as low as Rs. 500 while for a lump sum, the minimum requirement is Rs. 500
Taxation of Debt Funds:
Debt funds if held for less than 3 years attract short-term capital gains according to the investor’s income tax. In the event that the Debt Fund Units are redeemed after a 3-year term, a 20 percent long-term income tax will apply after indexation. Sale or redemption of debt mutual funds is not subject to a securities transaction tax.
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