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These 2 Top-Ranked Corporate Bond Funds Have Delivered Good Long-Term Returns
A corporate bond fund is a mutual fund that invests more than 80% of its assets in corporate bonds. Business organizations sell these to cover short-term expenditures such as working capital, advertising, insurance premium payments, and so on. Top-ranked companies with extremely high CRISIL Credit Ratings are excellent mutual funds to invest in. Furthermore, Navratnas and public sector businesses are the most common types of companies in this category.
Since corporate bond mutual funds are debt securities, they have a lower risk sensitivity. It's great for risk-averse investors seeking high returns on their money. If you are looking for investment in a corporate bond fund, look for investment periods 1 and 4 as often best corporate bond funds similar investment period, this helps maintain the investor's liquidity. Point to remember, because they have a larger credit risk, these funds have higher interest rates.
L&T Triple Ace Bond Fund – Direct Plan-Growth
| NAV | Fund Size | Expense Ratio |
|---|---|---|
| ₹62.22 | ₹ 9622.88 Cr | 0.29% |
NAV as on 20 January, 2022
The L&T Triple Ace Bond Fund is an open-ended debt fund that primarily invests in corporate bonds rated AA+ or above. It's a fund with a reasonably high-interest rate risk and a low credit risk. The fund has been rated 5-star by CRISIL and also stated very good performance among its peers. However, the risk is still there, but, it is moderate. Its expense ratio is equal to its category average ratio is 0.29%. The fund 95.5% investments are in Debt, out of which 26.75% is in Government securities, and the rest 68.75% in low-risk securities.
The fund invests primarily in AA+ and above-rated debt and money market securities to create a consistent return. As previously stated, the fund focuses on regular income and is best suited for investors looking for a consistent and predictable income throughout the medium to long term.
IDFC Corporate Bond Fund – Direct Plan-Growth
| NAV | Fund Size | Expense Ratio |
|---|---|---|
| ₹15.89 | ₹ 19998.95 Cr | 0.27% |
NAV as on 20 January, 2022
It's an open-ended debt fund that, like its competitor, primarily invests in AA+ and higher-rated corporate bonds. 96.1% of the fund's assets are in debt, with 24.28% in government securities and 71.82% in funds that invest in very low-risk securities.
The fund has low credit risk and a relatively high-interest rate risk, making it a desirable investment alternative. It invests in the corporate bond segment in order to generate returns. It has delivered above-average performance among peers and was given 4-star by the CRISIL. Talking about risk, it comes with moderate risk factors.
Investors who expect strong returns and are looking for a medium to long-term optimum returns should invest in the fund for at least three to five years. Investors who wish to invest for a longer period of time yet want lower-risk assets than equities funds might choose the product.
Returns Over The Years
On the investment of RS 10,000, both the funds offered the following returns over the years:
L&T Triple Ace Bond Fund - Direct Plan-Growth
| Period Invested for | Absolute Returns | Annualised Returns | Category Avg |
|---|---|---|---|
| 1 Year | 3.98% | 3.97% | 9.84% |
| 2 Year | 16.64% | 7.99% | 8.68% |
| 3 Year | 32.20% | 9.72% | 7.89% |
| 5 Year | 42.18% | 7.29% | 7.21% |
| Since Inception | 102.84% | 8.12% | 7.38% |
IDFC Corporate Bond Fund - Direct Plan-Growth
| Period Invested for | Absolute Returns | Annualised Returns | Category Avg |
|---|---|---|---|
| 1 Year | 4.46% | 4.46% | 9.84% |
| 2 Year | 16.15% | 7.76% | 8.68% |
| 3 Year | 26.11% | 8.02% | 7.89% |
| 5 Year | 42.48% | 7.33% | 7.21% |
| Since Inception | 58.93% | 7.99% | 7.38% |
SIP Returns Over The Years
On the simple SIP of Rs 1000, both the funds offered the follows returns:
L&T Triple Ace Bond Fund - Direct Plan-Growth
| Period Invested for | Absolute Returns | Annualised Returns |
|---|---|---|
| 1 Year | 2.34% | 4.35% |
| 2 Year | 5.79% | 5.49% |
| 3 Year | 11.94% | 7.44% |
| 5 Year | 23.22% | 8.27% |
IDFC Corporate Bond Fund - Direct Plan-Growth
| Period Invested for | Absolute Returns | Annualised Returns |
|---|---|---|
| 1 Year | 2.30% | 4.26% |
| 2 Year | 6.08% | 5.77% |
| 3 Year | 11.08% | 6.93% |
| 5 Year | 20.69% | 7.45% |
Disclaimer
Mutual fund investments are subject to market risk. Read all scheme-related documents, Terms and Conditions carefully before investing. The above-mentioned information is purely informational and carried forward from MoneyControl and CRISIL. The Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.
