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Best corporate bond mutual funds to invest in 2020

Best corporate bond mutual funds to invest in 2020


As per SEBI norms, corporate bond funds have the mandate to invest at least 80% of their corpus in the highest-rated corporate bonds. That means these schemes would invest most of their corpus in corporate bonds that are rated AAA.

Here's the monthly update on our recommended corporate bond schemes for May.

There is no change in our recommendation list in this month. If you are investing in any of these schemes, you may continue to invest and hold on to them.

As you know, the performance of two recommended schemes - Nippon India Prime Debt Fund and ICICI Prudential Corporate Bond Fund - had slipped last month, and both the schemes were in the third quartile in March. ICICI Prudential Corporate Bond Fund continues to be in the third quarter this month. Keep an eye for our monthly updates, where we will update you about the performance of these schemes.





As per Sebi norms, corporate bond funds have the mandate to invest at least 80% of their corpus in the highest-rated corporate bonds. That means these schemes would invest most of their corpus in corporate bonds that are rated AAA. This is a great plus point in the current market conditions, where there are no takers for lower-rated bonds. This investment mandate makes them a relatively less risky than credit risk funds. However, since we are dealing with companies, there is always a bit of risk.

As you know, the highest-rated companies are much more reliable than their counterparts rated lower. However, a higher rating doesn't mean that the company ratings won't come down in future or they may not default on their payment. IL&FS saga is a clear example of how a so-called reliable bet can go wrong. But the chances of them defaulting or suddenly becoming junk-rated are remote.

Corporate bond funds are less volatile than credit-risk funds, long-term debt schemes and gilt schemes, say mutual fund advisors. Corporate bond funds category has offered 8.33% returns in the last one year.

Mutual fund advisors believe that if you are looking for a debt mutual fund scheme to invest for a medium term of three to five years and don't want to take too much risk on your investment, you may think of investing in corporate bond funds. In other words, if you have a moderate risk profile and you want invest for a medium term without thinking about the market forces like interest rates, you may invest in corporate bond funds.

Our high in credit quality funds

Scheme	AUM         (Rs Cr)	7 Days	14 Days	30 Days	60 days	90 Days	180 Days	270 Days	1 Year	2 year	Exit Load
Aditya Birla Sun Life Money Manager Fund	8222.03	19.8	17.91	12.4	16.2	8.81	7.7	7.53	8.12	8.3	Nil
Aditya Birla Sun Life Low Duration Fund	8142.46	21.1	21.32	11.8	18.6	7.67	7.62	8.28	8.9	8.9	Nil
Aditya Birla Sun Life Banking & PSU Debt Fund	11119.8	32.4	25.77	22.8	28.8	9.11	9.86	9.93	11.6	10	Nil
Aditya Birla Sun Life Corporate Bond Fund	17647.8	27.7	22.84	22.5	27.8	11.4	10.6	10.17	11	10	Nil
Aditya Birla Sun Life Savings Fund	12268.1	17.4	17.82	10.8	14	6.53	6.78	7.23	7.91	8.3	Nil
Aditya Birla Sun Life Liquid Fund	33418.3	6.28	6.37	5.55	6.79	5.86	5.6	5.68	6.12	6.9	Nil