Best Rated Corporate Bond Mutual Fund SIP Ticked Upto 127% Return: Rated By Morningstar

In 2021, investments in mutual funds and SIP earned confidence among investors mostly. The industry added around Rs. 7 lakh crore to their asset base, in the last year, as the equity markets were sharply bullish. This trend of new investors' footsteps in the field is continuing this year.

Here, the portfolio of a mutual fund SIP, best rated by Morningstar, has been discussed, which invests in corporate bonds.

Corporate Bond Mutual Fund SIP investment rationale

This kind of mutual fund house will invest at least 80% of the total assets in high-rated corporates/companies' bonds. These funds generally perform best in the long term. The corporate bond mutual funds generally offer fixed returns, but these returns are much higher than traditional assured income tools, like FDs. Because, in the case of FD, the interest rates are very poor compared to the corporate bond's interest rates. These funds are also suitable for investors with a lower risk appetite.

However, investors should look out for the fund's AUM, and the expense ratio of the mutual fund, to understand your profitability quotient.

HDFC Corporate Bond Fund - Growth

HDFC Corporate Bond Fund is a mutual fund SIP investment that has a NAV of Rs. 26.01, additionally the fund size (AUM) is Rs. 27399.66 crore. The Expense Ratio (ER) of this fund is 0.60%. However, this fund's ER is lower than the category average, which is 0.71%, suitable for your profitability.

The Expense Ratio is measured as the percentage, which the fund house will utilize from the retail investors' money, for fund management purposes. The fund size or AUM is considered as the total market value of the mutual fund's assets.

This mutual fund SIP has been best rated with 5 Star by rating agency Morningstar.

Absolute and annualized returns

As it is a corporate bond fund, its absolute returns from SIPs are counted best in the long term. In the last 1-year SIP return stood at 2.21%, in the last 2 years it has fetched 5.43% returns, in the last 3 years it has given 10.53% returns, in the last 5 years, it has fetched 20.81% returns, and in the last 10 years, it has given 52.30% returns. Annualized returns of this fund's SIP were 8.14% in the past 10 years, and 7.48% in the past 5 years.

HDFC Corporate Bond Fund's absolute mutual fund returns are highest in 5 years terms. In the last 1 year return stood at 5.35%, in the last 2 years it has fetched 14.25% returns, in the last 3 years it has given 27.17% returns, in the last 5 years it has given 44.44% returns, and in the last 10 years, it has given 127.94% returns. In the past 5 years, the HDFC Corporate Bond Fund's annualized returns stood at 7.63%, outperforming the category average at 6.95%.

Portfolio

HDFC Corporate Bond Fund has a total of 167 Debt Holdings, and its Modified Duration is 2.6 years. It has 95.84% in debt holdings, and it has 4.16% in other funds. HDFC Corporate Bond Fund has 21.19% in government securities, 74.50% in NCD & Bonds, and 0.15% in PTC.

Other funds under this category are, L&T Triple Ace Bond Fund, Nippon India Corporate Bond Fund, Kotak Corporate Bond Fund - Growth, IDFC Corporate Bond Fund - Regular Plan-Growth, etc.

(Also read: This Mutual Fund Invests In Government Bonds, Given Upto 136% Returns: Top Rated By Morningstar)

Disclaimer

Investing in equities/mutual funds/SIPs/debts poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, and the author are not liable for any losses caused as a result of decisions based on the article. (Data mentioned as on February 28, 2022)