While building a portfolio, it is vital to avoid overexposure to a particular asset class. Although equity investments are among the most popular investment options for many, including a debt component can help investors build a well-rounded, diverse portfolio that can also help minimise risk. A medium to long-duration mutual fund is one such debt investment that investors can consider adding to their portfolio.
A medium- to long-duration mutual fund is an open-ended debt mutual fund that invests in debt securities with an average maturity of 4-7 years.
Typically, a medium- to long-duration fund invests in corporate debt instruments, which might include securities with maturities of 1 to 4 years, as well as those with maturities of 5 to 7 years or more.
Since these funds have a longer maturity than short-duration mutual funds, they are more susceptible to interest rate fluctuations but also have the potential to generate higher returns.
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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 Debt Management Fund | Debt | Moderately High | 47.89 | 0.41 | 8.1% | 8.0% | 6.6% | -- | -- | 5 | ₹110 | Exit load of 0.25% if redeemed within 15 days. |
ICICI Prudential Diversified Debt Strategy Active FoF Direct-Growth | Debt | Moderately High | 49.90 | 0.45 | 5.7% | 7.4% | 6.5% | 7.0% | 7.2% | 4 | ₹105 | Exit load of 0.25% if redeemed within 15 days. |
ICICI Prudential Medium to Long Term Fund | Debt | Moderate | 44.90 | 0.59 | 5.3% | 7.3% | 6.3% | 7.1% | 7.2% | 4 | ₹2,048 | - |
SBI Magnum Income Fund | Debt | Moderately High | 77.45 | 0.77 | 6.4% | 7.7% | 6.3% | -- | -- | 4 | ₹2,168 | For units in excess of 10% of the investment, 1% will be charged for redemption within 1 year See more |
SBI Medium to Long Term Fund | Debt | Moderately High | 80.30 | 0.78 | 5.0% | 7.0% | 6.2% | 7.3% | 7.6% | 1 | ₹2,046 | For units in excess of 10% of the investment, 1% will be charged for redemption within 1 year See more |
Nippon India Medium to Long Term Fund | Debt | Moderate | 104.77 | 0.67 | 5.0% | 6.8% | 6.1% | 6.5% | 7.0% | 3 | ₹328 | Exit load of 0.25% if redeemed within 15 days |
HDFC Medium to Long Term Fund | Debt | Moderate | 67.34 | 0.8 | 4.4% | 6.9% | 5.8% | 6.2% | 5.9% | 3 | ₹830 | - |
Aditya Birla Sun Life Medium to Long Term Fund | Debt | Moderate | 140.36 | 0.69 | 3.8% | 6.3% | 5.5% | 6.5% | 6.7% | 1 | ₹1,770 | - |
Kotak Medium to Long Term Fund | Debt | Moderate | 90.72 | 0.7433 | 5.2% | 7.3% | 6.2% | 6.9% | 6.9% | 3 | ₹1,784 | - |
Canara Robeco Medium to Long Term Direct-Growth | Debt | Moderate | 64.64 | 0.78 | 3.7% | 6.4% | 5.4% | 6.1% | 6.6% | 3 | ₹111 | - |
Franklin India Medium to Long Term Fund | Debt | Moderate | 11.31 | 0.34 | 5.4% | -- | -- | -- | -- | 3 | ₹42 | - |
UTI Medium to Long Term Fund | Debt | High | 83.36 | 1.32 | 4.1% | 6.4% | 8.5% | 6.5% | 5.5% | 2 | ₹305 | - |
JM Medium to Long Term Fund | Debt | Moderate | 72.23 | 0.59 | 3.8% | 6.8% | 5.4% | 5.3% | 4.7% | 4 | ₹30 | - |
LIC MF Medium to Long Term Fund | Debt | Moderate | 82.17 | 0.22 | 5.1% | 7.4% | 6.3% | 6.3% | 6.4% | 4 | ₹174 | Exit load of 0.25% if redeemed within 15 days. |
HSBC Medium to Long Term Fund | Debt | Moderate | 48.80 | 0.63 | 3.5% | 6.6% | 5.2% | 5.6% | 6.0% | 2 | ₹48 | - |
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As an investor, it is important to check whether a medium to long-term mutual fund can be an ideal addition to your portfolio:
Before making any investment decision, it is important to know what one aims to achieve from an investment, such as wealth generation, savings, or income. Additionally, knowing your investment horizon and risk appetite is also crucial in the decision-making process. A medium- to long-term mutual fund is ideal for investors looking to stay invested for 3-5 years and willing to take on moderate risk.
A medium- to long-term mutual fund invests in debt securities with an average maturity of 4 to 7 years. This makes these funds more susceptible to the interest rate fluctuations. Changes in interest rates affect bond prices and the fund's overall performance. Having a clear look at the interest rate trajectory can help investors make informed decisions.
Before investing in a medium- to long-term fund, it is important to understand key details, such as the fund’s past performance, average maturity, and asset allocation. Additional information, such as a fund manager’s track record, can help investors carefully assess a mutual fund relative to its peers.
As an investor, it is vital to consider the costs associated with investing in a mutual fund. One should compare the fund’s expense ratio, exit load, and transaction charges with those of similar funds to choose the most cost-effective option. It is also crucial to consider the tax implications as they can impact your overall returns.
There are several key benefits that a medium to long-term mutual fund offers:
Although a medium to long-term fund has several benefits, investors should also be aware of the following risks:
Medium- to long-term funds typically perform well when interest rates are declining or expected to fall. When interest rates rise, bond prices fall, which affects the fund's performance.
A medium- to long-term fund mainly invests in corporate debt securities with high credit ratings. However, credit risks persist, which may lead the company to default on the loan.
As with other investments, macroeconomic factors, geopolitical events, and the regulatory environment can affect the broader market and the mutual fund's performance.
A medium to long-term fund invests in various securities. In volatile market conditions, specific securities may be complex to trade or sell, leading to liquidity risks.
A medium to long-term mutual fund is taxed similarly to other debt mutual funds. Irrespective of the holding period, gains from units are treated as part of the investor’s income and taxed at the applicable income tax rate.
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The ICICI Prudential Debt Management Fund has given 7.95% annualized returns in the past three years and 6.6% in the last 5 years. The ICICI Prudential Debt Management Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Debt Management Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹110Cr |
| 1Y Returns | 8.1% |
Fund Performance: The ICICI Prudential Diversified Debt Strategy Active FoF Direct-Growth has given 7.37% annualized returns in the past three years and 6.48% in the last 5 years. The ICICI Prudential Diversified Debt Strategy Active FoF Direct-Growth comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Diversified Debt Strategy Active FoF Direct-Growth via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹105Cr |
| 1Y Returns | 5.7% |
Fund Performance: The ICICI Prudential Medium to Long Term Fund has given 7.31% annualized returns in the past three years and 6.35% in the last 5 years. The ICICI Prudential Medium to Long Term Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Medium to Long Term Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹2,048Cr |
| 1Y Returns | 5.3% |
Fund Performance: The SBI Magnum Income Fund has given 7.74% annualized returns in the past three years and 6.25% in the last 5 years. The SBI Magnum Income Fund comes under the Debt category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI Magnum Income Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹2,168Cr |
| 1Y Returns | 6.4% |
Fund Performance: The SBI Medium to Long Term Fund has given 6.98% annualized returns in the past three years and 6.21% in the last 5 years. The SBI Medium to Long Term Fund comes under the Debt category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI Medium to Long Term Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹2,046Cr |
| 1Y Returns | 5.0% |
Fund Performance: The Nippon India Medium to Long Term Fund has given 6.76% annualized returns in the past three years and 6.08% in the last 5 years. The Nippon India Medium to Long Term Fund comes under the Debt category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Medium to Long Term Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹328Cr |
| 1Y Returns | 5.0% |
Fund Performance: The HDFC Medium to Long Term Fund has given 6.87% annualized returns in the past three years and 5.81% in the last 5 years. The HDFC Medium to Long Term Fund comes under the Debt category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Medium to Long Term Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹830Cr |
| 1Y Returns | 4.4% |
Fund Performance: The Aditya Birla Sun Life Medium to Long Term Fund has given 6.3% annualized returns in the past three years and 5.52% in the last 5 years. The Aditya Birla Sun Life Medium to Long Term 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 Medium to Long Term Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹1,770Cr |
| 1Y Returns | 3.8% |
Fund Performance: The Kotak Medium to Long Term Fund has given 7.26% annualized returns in the past three years and 6.17% in the last 5 years. The Kotak Medium to Long Term Fund comes under the Debt category of Kotak Mahindra Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Kotak Medium to Long Term Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹1,784Cr |
| 1Y Returns | 5.2% |
Fund Performance: The Canara Robeco Medium to Long Term Direct-Growth has given 6.38% annualized returns in the past three years and 5.36% in the last 5 years. The Canara Robeco Medium to Long Term Direct-Growth comes under the Debt category of Canara Robeco Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Canara Robeco Medium to Long Term Direct-Growth via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹111Cr |
| 1Y Returns | 3.7% |
Fund Performance: The Franklin India Medium to Long Term Fund comes under the Debt category of Franklin Templeton Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Franklin India Medium to Long Term Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹42Cr |
| 1Y Returns | 5.4% |
Fund Performance: The UTI Medium to Long Term Fund has given 6.42% annualized returns in the past three years and 8.54% in the last 5 years. The UTI Medium to Long Term Fund comes under the Debt category of UTI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in UTI Medium to Long Term Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹305Cr |
| 1Y Returns | 4.1% |
Fund Performance: The JM Medium to Long Term Fund has given 6.79% annualized returns in the past three years and 5.39% in the last 5 years. The JM Medium to Long Term Fund comes under the Debt category of JM Financial Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in JM Medium to Long Term Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹30Cr |
| 1Y Returns | 3.8% |
Fund Performance: The LIC MF Medium to Long Term Fund has given 7.41% annualized returns in the past three years and 6.28% in the last 5 years. The LIC MF Medium to Long Term Fund comes under the Debt category of LIC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in LIC MF Medium to Long Term Fund via lump sum is ₹5,000 and via SIP is ₹200.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹174Cr |
| 1Y Returns | 5.1% |
Fund Performance: The HSBC Medium to Long Term Fund has given 6.57% annualized returns in the past three years and 5.24% in the last 5 years. The HSBC Medium to Long Term Fund comes under the Debt category of HSBC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HSBC Medium to Long Term Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹48Cr |
| 1Y Returns | 3.5% |
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