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Best Medium Duration Mutual Funds

According to SEBI guidelines, there are 16 subtypes of debt mutual funds, and medium duration mutual funds are one of them. Medium duration funds invest in securities with a duration of 3 to 4 years, and their primary objective is to ensure a steady return throughout this period.

Best medium duration mutual funds invest in money market instruments and debt securities, which offer stable returns. These funds comprise securities with a higher maturity than short-term funds but not as extended as that of long duration schemes. Owing to their long tenure, these underlying securities are subject to interest rate fluctuations.

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List of Medium Duration Mutual Funds in India

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
ICICI Prudential Medium Term Bond FundDebtModerately High3.7%5₹6,816
SBI Magnum Medium Duration FundDebtModerately High3.0%5₹9,968
HDFC Medium Term Debt FundDebtModerate3.1%4₹4,079
Axis Strategic Bond FundDebtModerate4.0%4₹1,828
L&T Resurgent India Bond FundDebtModerate2.7%4₹741
Kotak Medium Term FundDebtModerate4.4%3₹2,458
IDFC Bond FundDebtModerate1.0%3₹2,463
Sundaram Medium Term Bond FundDebtModerate0.3%3₹56
DSP Bond FundDebtModerate1.9%2₹351
UTI Medium Term FundDebtModerate5.4%2₹60
Tata Medium Term FundDebtModerate3.1%2₹83
Baroda BNP Paribas Medium Duration FundDebtModerate1.1%2₹44
Nippon India Strategic Debt FundDebtHigh15.9%1₹211
Invesco India Medium Duration FundDebtModerateN.A₹533
View All

Features of Medium Duration Mutual Fund

Best medium duration mutual fund offers the following features –

Asset allocation: The asset allocation of medium duration funds follows the rule of debt funds. It primarily invests in money market and debt securities with a Maximum duration of 3 – 4 years.

Risk-reward ratio: Although debt funds are immune to market risks, they are susceptible to credit, interest, and liquidity risks. The same can be said about medium duration MFs. Therefore, the risk-reward ratio for this particular fund is high to moderate, depending on a specific scheme.

Taxability

Long-term Capital Gains Tax: If you sell the units of your debt funds after 3 years from the date of purchase, you are liable to pay LTCG tax on capital gains. If you opt for indexation benefits, you need to pay tax at 20%, and without that benefit, it is at 10%.

Short-term Capital Gains Tax: In case you liquidate your debt fund units within 3 years of purchase, the capital gains will be added to your taxable income.

TDS: TDS is not applicable for best medium duration mutual funds.

Who Are These Funds Suited For?

Medium duration funds are ideal for individuals with a low-risk appetite and a mid-term outlook. Since the maturity period of the underlying stocks is 3 to 4 years, these can be an alternative for bank deposits as well. This particular mutual fund type suits the conservative investment style, as it offers balanced returns over a medium tenure.

Besides, here are some points to consider before investing in medium duration mutual funds.

Investment objective: The first point to evaluate is your investment objective. Being clear of it is vital as it will allow you to find the right plan from the top medium duration mutual funds. You can then select a plan that will help you fulfil your financial goal over a preferred time horizon.

Risk appetite: It’s imperative to evaluate your risk-bearing capacity before investing. Theoretically, medium duration funds carry minimal risks, but they are susceptible to interest, credit, and liquidity risks. Therefore, it is vital to analyse the portfolio of the best medium duration mutual funds to determine a scheme that suits your risk tolerance.

Experience of the fund manager: Alongside risk assessment, you should also review the experience and past performance of a fund manager. It helps in understanding such an individual’s level of competence in navigating different market scenarios.

Previous performance of a fund: Even though a fund’s past performance is not an indication of its future returns, it can hint at how the scheme fared previously under different market conditions. Therefore, it is imperative to check the previous performance of a fund before investing. 

Expense ratio: Fund management incurs expenses, which is then deducted from generated returns. It is denoted as the expense ratio, which is a small % of total fund assets. 

Exit load: AMCs levy an additional charge if you leave a scheme before a particular date specified in the scheme-related documents. However, these details vary from one mutual fund plan to another, and some best medium duration mutual funds 2022 may not have such additional charges.

Direct and regular plans: Direct plans are issued by fund houses directly for you to invest in. Therefore, no intermediaries are involved. Contrarily, for regular plans, you need to invest through a third party like a broker. Typically, the expense ratio for direct plans is lower than that of regular ones. Also, direct plans report a higher NAV when compared to regular plans.

Major Advantages

Here are some notable advantages of investing in the best medium duration mutual funds –

Low-risk option: Medium duration funds involve less risk than pure equity schemes and equity-oriented MFs. Thus, they are suitable to dilute the concentrated stake in a portfolio and hedge against market volatility. 

Suitable for long-term investors: Best medium duration mutual funds suit a mid-to-long-term approach. They can be an ideal choice if you are searching for an investment option with higher returns than bank deposits and less risk than equity funds.

Mode of investments: You can invest in a medium duration mutual fund scheme of choice via SIP or lump sum method. In SIP or Systematic Investment Plans, you need to pay a specified amount at regular intervals. It can be a monthly, half-yearly, or quarterly system, depending on your preference. As for the lump-sum method, it is self-explanatory. The amount for both approaches can vary from one scheme to another. In most cases, the minimum SIP amount is Rs.500, and the lump-sum amount is Rs.1000.

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

ICICI Prudential Medium Term Bond Fund Direct Plan Growth

Fund Performance: The ICICI Prudential Medium Term Bond Fund has given 8.09% annualized returns in the past three years and 7.48% in the last 5 years. The ICICI Prudential Medium Term Bond Fund belongs to the Debt category of ICICI Prudential Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Medium Term Bond Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹6,816Cr
1Y Returns3.7%

SBI Magnum Medium Duration Fund Direct Growth

Fund Performance: The SBI Magnum Medium Duration Fund has given 7.98% annualized returns in the past three years and 7.91% in the last 5 years. The SBI Magnum Medium Duration Fund belongs to the Debt category of SBI Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in SBI Magnum Medium Duration Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹9,968Cr
1Y Returns3.0%

HDFC Medium Term Debt Fund Direct Plan Growth

Fund Performance: The HDFC Medium Term Debt Fund has given 7.31% annualized returns in the past three years and 7.25% in the last 5 years. The HDFC Medium Term Debt Fund belongs to the Debt category of HDFC Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in HDFC Medium Term Debt Fund via lump sum is ₹5,000 and via SIP is ₹300.

Min Investment Amt₹5,000
AUM₹4,079Cr
1Y Returns3.1%

Axis Strategic Bond Fund Direct Growth

Fund Performance: The Axis Strategic Bond Fund has given 7.08% annualized returns in the past three years and 7.48% in the last 5 years. The Axis Strategic Bond Fund belongs to the Debt category of Axis Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Axis Strategic Bond Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹1,828Cr
1Y Returns4.0%

L&T Resurgent India Bond Fund Direct Growth

Fund Performance: The L&T Resurgent India Bond Fund has given 6.81% annualized returns in the past three years and 6.55% in the last 5 years. The L&T Resurgent India Bond Fund belongs to the Debt category of L&T Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in L&T Resurgent India Bond Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹741Cr
1Y Returns2.7%

Kotak Medium Term Fund Direct Growth

Fund Performance: The Kotak Medium Term Fund has given 6.58% annualized returns in the past three years and 6.78% in the last 5 years. The Kotak Medium Term Fund belongs to the Debt category of Kotak Mahindra Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Kotak Medium Term Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹2,458Cr
1Y Returns4.4%

IDFC Bond Fund Medium Term Plan Direct Growth

Fund Performance: The IDFC Bond Fund has given 6.21% annualized returns in the past three years and 6.53% in the last 5 years. The IDFC Bond Fund belongs to the Debt category of IDFC Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in IDFC Bond Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹2,463Cr
1Y Returns1.0%

Sundaram Medium Term Bond Fund Direct Growth

Fund Performance: The Sundaram Medium Term Bond Fund has given 4.52% annualized returns in the past three years and 5.41% in the last 5 years. The Sundaram Medium Term Bond Fund belongs to the Debt category of Sundaram Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Sundaram Medium Term Bond Fund via lump sum is ₹5,000 and via SIP is ₹250.

Min Investment Amt₹5,000
AUM₹56Cr
1Y Returns0.3%

DSP Bond Direct Growth

Fund Performance: The DSP Bond Fund has given 4.27% annualized returns in the past three years and 5.01% in the last 5 years. The DSP Bond Fund belongs to the Debt category of DSP Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in DSP Bond Fund via lump sum is ₹500 and via SIP is ₹500.

Min Investment Amt₹500
AUM₹351Cr
1Y Returns1.9%

UTI Medium Term Fund Direct Growth

Fund Performance: The UTI Medium Term Fund has given 3.66% annualized returns in the past three years and 4.85% in the last 5 years. The UTI Medium Term Fund belongs to the Debt category of UTI Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in UTI Medium Term Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹60Cr
1Y Returns5.4%

Tata Medium Term Fund Direct Growth

Fund Performance: The Tata Medium Term Fund has given 2.15% annualized returns in the past three years and 3.49% in the last 5 years. The Tata Medium Term Fund belongs to the Debt category of Tata Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Tata Medium Term Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹83Cr
1Y Returns3.1%

Baroda BNP Paribas Medium Duration Fund Direct Growth

Fund Performance: The Baroda BNP Paribas Medium Duration Fund has given 1.94% annualized returns in the past three years and 3.37% in the last 5 years. The Baroda BNP Paribas Medium Duration Fund belongs to the Debt category of BNP Paribas Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Baroda BNP Paribas Medium Duration Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹44Cr
1Y Returns1.1%

Nippon India Strategic Debt Fund Direct Growth

Fund Performance: The Nippon India Strategic Debt Fund has given -4.04% annualized returns in the past three years and -0.56% in the last 5 years. The Nippon India Strategic Debt Fund belongs to the Debt category of Nippon India Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Nippon India Strategic Debt Fund via lump sum is ₹5,000 and via SIP is ₹100.

Min Investment Amt₹5,000
AUM₹211Cr
1Y Returns15.9%

Invesco India Medium Duration Fund Direct Growth

Fund Performance: The Invesco India Medium Duration Fund belongs to the Debt category of Invesco Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Invesco India Medium Duration Fund via lump sum is ₹1,000 and via SIP is ₹1,000.

Min Investment Amt₹1,000
AUM₹533Cr
1Y ReturnsNA

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