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5 Best Debt Mutual Fund Schemes To Consider For 2020

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As we usher in 2020, it is time to look at debt mutual funds that can in some cases fetch returns that are even better than bank deposit interest rates. Here are 5 debt mutual funds that have been highly rated and have delivered decent returns over the last few years. We wish to state that we have based these on Crisil ratings and past track record to an extent.

IDFC Dynamic Bond Fund, Regular Plan, Growth

IDFC Dynamic Bond Fund, Regular Plan, Growth

IDFC Dynamic Bond Fund has given very good returns of 9.56 per cent in the last one year. The 2-year returns has been 7.56 per cent on an annualized basis.

The three year absolute SIP returns have also been attractive at near 12.15 per cent. The fund has been rated as 5-star by Crisil. Bond Funds invest money in relatively safe instruments and their returns can largely be linked to interest rates in the economy. They are much safer when compared to equity mutual funds, which tend to be volatile.

SBI Dynamic Bond Fund – Growth
 

SBI Dynamic Bond Fund – Growth

The one year returns from the fund has been a solid 12 per cent, while the 3 year returns is 6.82 per per cent. Like the IDFC Dynamic Bond Fund, this fund has also been accorded a 5-star rating from Crisil.

The fund tends to invest in safe instruments, which this makes it a good investment. At the moment SBI Dynamic Bond Fund, has almost 45 per cent of its investments in government owned securities, which is what makes it a safe bet.

Investors with a long-term perspective can buy into this fund.

Edelweiss Government Securities Fund - Regular Plan – Growth

Edelweiss Government Securities Fund - Regular Plan – Growth

Edelweiss Government Securities Fund has generated a return of 9.68 per cent over the last one year, while the returns over 2-years has been 7.93 per cent.

The fund has investments in government securities, with almost 93 per cent allocated to the same. This makes the scheme a very safe one. The current NAV of the fund is Rs 16.04.

Canara Robeco Savings Fund - Regular Plan – Growth

Canara Robeco Savings Fund - Regular Plan – Growth

Canara Robeco Savings Fund has assets under management of nearly Rs 1,500 crores. This is another debt mutual fund, which is a good investment for the medium to long-term.

The fund has about 97 per cent of its investment in debt. Crisil has accorded Canara Robeco Savings Fund a rating of 5 star, which is the highest rating from the institution.

Those who are looking to invest in the growth plan can do so at a net asset value of Rs 30.85.

Invesco India Liquid Fund - Growth

Invesco India Liquid Fund - Growth

Invesco India has generated a return of 7.34 per cent returns over the last 5 years. The fund has almost 85.22 per cent invested in debt. If you are looking at a long-term investment, this would not be a bad bet. However, we wish to inform readers that returns are largely linked to interest rates in the economy. Therefore, if interest rates in the economy fall, the returns from debt funds also tend to fall. Investors are also advised to invest in debt funds after seeing the quality. For example, GILT funds, where the fund invests in government instruments are the safest bets.

Story first published: Thursday, December 19, 2019, 10:09 [IST]
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