Dynamic bond schemes are dynamic in nature, just as their name suggests. They are dynamic in their composition and maturity profile. The core objective of this bond is to offer 'optimal' return in both the rising and falling market scenarios. It depends entirely on the fund manager's decisions and management of the portfolio.
Get a better perspective of the best dynamic bond funds in 2025 in the market through the table below.
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| Fund Name | Category | Risk | NAV | Expense Ratio | 1Y Returns | 3Y Returns | 5Y Returns | 7Y Returns | 10Y Returns | Rating | Fund Size (in Cr) | Exit Load |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
ICICI Prudential All Seasons Bond Fund | Debt | Moderately High | 41.45 | 0.63 | 4.5% | 7.8% | 7.1% | 8.2% | 8.5% | 2 | ₹14,001 | Exit load of 0.25% if redeemed within 1 month |
Nippon India Dynamic Bond Fund | Debt | Moderate | 41.30 | 0.35 | 3.8% | 7.3% | 6.2% | 7.1% | 7.1% | 5 | ₹3,975 | - |
UTI Dynamic Bond Fund | Debt | Moderate | 34.89 | 0.87 | 3.9% | 7.5% | 9.4% | 7.2% | 7.3% | 4 | ₹417 | - |
360 ONE Dynamic Bond Fund | Debt | Moderately High | 24.82 | 0.34 | 5.0% | 7.9% | 7.0% | 7.2% | 7.2% | 5 | ₹594 | - |
SBI Dynamic Bond Direct Plan-Growth | Debt | Moderate | 40.48 | 0.66 | 3.2% | 7.5% | 6.6% | 7.9% | 8.1% | 3 | ₹3,928 | For units in excess of 10% of the investment, 0.25% will be charged for redemption within 1 month See more |
ICICI Prudential Retirement Fund | Debt | Moderate | 16.83 | 1.2 | 3.6% | 6.9% | 6.1% | 7.5% | -- | 2 | ₹82 | - |
Aditya Birla Sun Life Debt Plus Arbitrage FOF Fund | Debt | Moderate | NA | - | 8.0% | 7.6% | 6.4% | -- | -- | 4 | ₹1,238 | - |
Aditya Birla Sun Life Dynamic Bond Retail Fund | Debt | Moderately High | 51.53 | 0.66 | 3.7% | 7.6% | 7.3% | 6.8% | 6.6% | 1 | ₹1,509 | Exit load of 0.50% if units in excess of 15% are redeemed or switched-out within 90 days See more |
Kotak Income Plus Arbitrage FOF Fund | Debt | Moderate | NA | - | 8.0% | -- | -- | -- | -- | -- | ₹5,085 | - |
HDFC Dynamic Debt Fund | Debt | Moderate | 100.66 | 0.75 | 1.3% | 6.7% | 6.9% | 7.1% | 6.6% | 2 | ₹598 | - |
DSP Strategic Bond Direct Plan-Growth | Debt | Moderate | 3,609.14 | 0.54 | -0.7% | 6.8% | 5.9% | 7.2% | 7.1% | 2 | ₹789 | - |
Kotak Dynamic Bond Fund | Debt | Moderately High | 42.13 | 0.59 | 2.8% | 7.5% | 6.6% | 7.6% | 8.0% | 3 | ₹2,464 | - |
Mirae Asset Dynamic Bond Fund | Debt | Low to Moderate | 18.55 | 0.15 | 6.4% | 7.3% | 5.9% | 7.3% | -- | 5 | ₹116 | - |
JM Dynamic Bond Fund | Debt | Moderate | 45.54 | 0.44 | 2.5% | 6.7% | 6.0% | 6.2% | 6.8% | 4 | ₹53 | - |
Groww Dynamic Term Fund | Debt | Moderate | 1,550.54 | 0.54 | 0.6% | 5.7% | 5.2% | 6.0% | -- | 2 | ₹37 | - |
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Dynamic bond funds are likely to be suitable for:
The dynamic bond funds are appropriate for investors who are not specialists at predicting interest rate movements.
These funds can match investors with a moderate risk appetite since they are not as volatile as equity funds and not as safe as debt assets.
These funds are known to perform well over a period of 3 - 5 years. Therefore, these funds may work just right for you if you can stay invested for this period.
The major factors that are to be considered before you can start investing in these funds are:
Here are some major advantages of investing in the top dynamic mutual funds –
No mandate for fixed investments: Dynamic funds are not tied down with investment mandates. Therefore, they can invest in different market instruments according to market movements.
Two in one: As mentioned before, dynamic funds can switch between different asset classes per market trends and more flexibly than hybrid funds. This particular fund type adjusts the equity portion’s volatility with debt instruments’ security.
Active risk management: Portfolio managers of the best dynamic mutual funds optimize the investment allocation actively, keeping the market trends and unitholders’ interests in mind.
Higher returns: Dynamic funds tend to offer greater returns than pure debt schemes and some other types of hybrid MFs. It makes them suitable for investors seeking to improve their portfolio’s reward quotient without assuming the high risk involved in equity funds or stocks.
Mode of investments: You can invest in a dynamic fund either in a lump sum or via SIP. The former option lets you invest the entire sum at once. SIP or systematic investment plan allows you to purchase units of a dynamic fund at regular intervals, which can be monthly, quarterly, or half-yearly.
Best dynamic mutual funds stay in tandem with market fluctuations, ensuring a better and balanced return over time.
While finding the top dynamic bond funds for your portfolio, major risks to be taken care of are-
Dynamic bond funds come from the debt fund schemes category, where the fund manager has the flexibility to choose the duration of the portfolio. So, in case the manager estimates the interest rates to rise, they can increase the investments to short-tenure debt securities as they are least affected by interest rate risks.
Dynamic bond funds change the portfolio maturity based on the interest rate scenario, whereas the FD maturity date is always fixed. This is the major difference between these investment vehicles, leaving the end choice to the investor's financial goals.
The primary risk that is faced by the investors of a dynamic fund is the faulty judgment of the fund manager. The tenure strategy could ensure good returns, provided you keep altering the portfolio based on the rate changes in the market.
Dynamic mutual funds are a good choice for investors who want to generate returns from bond investments irrespective of the interest rates.
There is no fixed duration for a dynamic fund; the duration of the portfolio is decided by the fund manager based on the interest rate risks of the market.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The ICICI Prudential All Seasons Bond Fund has given 7.77% annualized returns in the past three years and 7.08% in the last 5 years. The ICICI Prudential All Seasons Bond Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential All Seasons Bond Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹14,001Cr |
| 1Y Returns | 4.5% |
Fund Performance: The Nippon India Dynamic Bond Fund has given 7.34% annualized returns in the past three years and 6.19% in the last 5 years. The Nippon India Dynamic Bond Fund comes under the Debt category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Dynamic Bond Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹3,975Cr |
| 1Y Returns | 3.8% |
Fund Performance: The UTI Dynamic Bond Fund has given 7.49% annualized returns in the past three years and 9.42% in the last 5 years. The UTI Dynamic Bond Fund comes under the Debt category of UTI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in UTI Dynamic Bond Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹417Cr |
| 1Y Returns | 3.9% |
Fund Performance: The 360 ONE Dynamic Bond Fund has given 7.91% annualized returns in the past three years and 7.01% in the last 5 years. The 360 ONE Dynamic Bond Fund comes under the Debt category of IIFL Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in 360 ONE Dynamic Bond Fund via lump sum is ₹10,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹10,000 |
|---|---|
| AUM | ₹594Cr |
| 1Y Returns | 5.0% |
Fund Performance: The SBI Dynamic Bond Direct Plan-Growth has given 7.5% annualized returns in the past three years and 6.64% in the last 5 years. The SBI Dynamic Bond Direct Plan-Growth comes under the Debt category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI Dynamic Bond Direct Plan-Growth via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹3,928Cr |
| 1Y Returns | 3.2% |
Fund Performance: The ICICI Prudential Retirement Fund has given 6.86% annualized returns in the past three years and 6.06% in the last 5 years. The ICICI Prudential Retirement Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Retirement Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹82Cr |
| 1Y Returns | 3.6% |
Fund Performance: The Aditya Birla Sun Life Debt Plus Arbitrage FOF Fund has given 7.58% annualized returns in the past three years and 6.42% in the last 5 years. The Aditya Birla Sun Life Debt Plus Arbitrage FOF Fund comes under the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Debt Plus Arbitrage FOF Fund via lump sum is ₹100 and via SIP is ₹1,000.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹1,238Cr |
| 1Y Returns | 8.0% |
Fund Performance: The Aditya Birla Sun Life Dynamic Bond Retail Fund has given 7.58% annualized returns in the past three years and 7.25% in the last 5 years. The Aditya Birla Sun Life Dynamic Bond Retail Fund comes under the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Dynamic Bond Retail Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,509Cr |
| 1Y Returns | 3.7% |
Fund Performance: The Kotak Income Plus Arbitrage FOF Fund comes under the Debt category of Kotak Mahindra Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Kotak Income Plus Arbitrage FOF Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹5,085Cr |
| 1Y Returns | 8.0% |
Fund Performance: The HDFC Dynamic Debt Fund has given 6.71% annualized returns in the past three years and 6.89% in the last 5 years. The HDFC Dynamic Debt Fund comes under the Debt category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Dynamic Debt Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹598Cr |
| 1Y Returns | 1.3% |
Fund Performance: The DSP Strategic Bond Direct Plan-Growth has given 6.81% annualized returns in the past three years and 5.86% in the last 5 years. The DSP Strategic Bond Direct Plan-Growth comes under the Debt category of DSP Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in DSP Strategic Bond Direct Plan-Growth via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹789Cr |
| 1Y Returns | -0.7% |
Fund Performance: The Kotak Dynamic Bond Fund has given 7.55% annualized returns in the past three years and 6.58% in the last 5 years. The Kotak Dynamic Bond Fund comes under the Debt category of Kotak Mahindra Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Kotak Dynamic Bond Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹2,464Cr |
| 1Y Returns | 2.8% |
Fund Performance: The Mirae Asset Dynamic Bond Fund has given 7.32% annualized returns in the past three years and 5.94% in the last 5 years. The Mirae Asset Dynamic Bond Fund comes under the Debt category of Mirae Asset Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Mirae Asset Dynamic Bond Fund via lump sum is ₹5,000 and via SIP is ₹99.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹116Cr |
| 1Y Returns | 6.4% |
Fund Performance: The JM Dynamic Bond Fund has given 6.72% annualized returns in the past three years and 6.02% in the last 5 years. The JM Dynamic Bond Fund comes under the Debt category of JM Financial Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in JM Dynamic Bond Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹53Cr |
| 1Y Returns | 2.5% |
Fund Performance: The Groww Dynamic Term Fund has given 5.71% annualized returns in the past three years and 5.22% in the last 5 years. The Groww Dynamic Term Fund comes under the Debt category of Groww Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Groww Dynamic Term Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹37Cr |
| 1Y Returns | 0.6% |
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