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Best HSBC Debt Mutual Funds

One of India’s leading asset management companies, L&T Investment Management Limited, began its journey in 1997. L&T Finance Holdings Limited, a listed company and registered under RBI as an NBFC, is the main sponsor of this AMC. As of June 2020, this company has managed asset worth Rs.58361.93 crore.

Currently, the AMC offers 35+ mutual fund schemes, including the best L&T debt mutual funds.

Debt mutual funds invest in money market instruments and debt securities like government and corporate bonds. This MF kind has different classifications based on the duration or issuer of the underlying securities. Premised on maturity periods, debt MFs are classified into overnight, short, ultra-short, medium, and medium-long duration funds, among others. These are categorised as gilt, banking and PSU, corporate, and credit risk funds based on issuers of the portfolio constituents. 

Debt MF schemes offer better liquidity and stable returns while involving a low-cost structure. They are also less volatile than equity mutual funds. The downside to debt funds is they usually provide less significant returns compared to their equity counterparts.

Nevertheless, the exact scale of these returns and their drawbacks will vary, depending on the type of debt fund one opts for. Investors can choose the best L&T debt mutual funds 2023 from among 10+ schemes. These comprise various options with varying scales of risks and returns. 

Taxability

Nonetheless, before investing in any of those, individuals may want to know the taxation that gains on debt MFs entail. 

Short-term Capital Gains Tax: If investors decide to liquidate their debt fund investments before the 3-year mark from the date of purchase, they are liable to pay STCGT. In such cases, the capital gains on any investment will be added to the annual income of investors. Thereafter, they need to pay according to the income tax slab they qualify for. For instance, if you belong to the 10% tax slab, you are liable to pay 10% + 4% cess as STCGT.

Long-term Capital Gains Tax: Capital gains on any debt fund realised after the third year of investment comes under LTCGT. If investors redeem units of the best L&T debt mutual funds after this period, they will incur a 20% tax on the amount after indexation. In case they do not opt for indexation benefits, the tax rate is 10%. 

TDS: Tax deducted at source is not applicable to debt mutual funds.

Understanding the taxability of debt mutual funds is important to make a correct decision about investments and liquidating them. Also, a comprehensive idea about the factors to consider beforehand is crucial in this regard. 

Factors to Consider Before Investing

Investment objective: The first point to consider is the objective of investment. It is vital to be clear about it to choose the right scheme from the top L&T debt mutual funds. They can select a plan according to their financial targets and the timeframe within which they plan to achieve it. 

Risk appetite: Debt funds are not prone to market risks but considerably vulnerable to credit, interest rate, and inflationary risks. A debt fund that has invested significantly in long-term securities will perform well in a falling interest rate regime and vice versa. Credit risk is considerable when a fund invests predominantly in bonds of low-rated issuers. And, lastly, the inflationary risk is when inflation rates outstrip returns by the fund. Hence, consider the associated risk factor to determine the best L&T debt mutual fund to invest in.

Past performance of a fund: It is vital to review the earlier performance of any fund before deciding. Preceding performance may not be a sign of possible returns. But, it offers insights into a scheme’s returns under varying market conditions. It is a significant determinant of a scheme’s fundamental strength, which hints at its risk and liquidity management framework. 

Holding analysis: Reviewing this parameter is also vital as it shows where the resources are invested. Additionally, it also provides a basic idea about the level of returns to expect and gauge the losses to account for.

Expense ratio: The expense ratio of a fund denotes the aggregate expenses of managing a mutual fund scheme. Denoted as a %, it is subtracted from the returns. Hence, individuals may want to compare this parameter when comparing the best L&T debt mutual funds.

Exit load: Asset Management Companies charge exit load if an investor pulls out from a scheme before a stipulated time, mentioned in the scheme-related documents. However, certain plans may not include this charge, depending on the scheme. 

Direct and regular plans: Direct plans allow investors to directly purchase units of a debt MF from L&T Investment Management Limited. It involves no intermediary. Contrarily, in regular plans, one needs to invest through a third party like a broker. Resultantly, the expenses of direct plans are lower than regular ones. Also, direct plans register a higher NAV compared to their regular counterparts.

Selecting the best L&T debt mutual funds might be a tough ask for inexperienced investors. However, evaluating the points mentioned above carefully and a basic understanding of mutual fund dynamics can be a good starting point.

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List of Hsbc Debt Mutual Funds in India

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Aditya Birla Sun Life International Equity Fund
EquityVery High16.0%--₹192
Aditya Birla Sun Life International Equity Fund
EquityVery High26.1%--₹101
ICICI Prudential Floating Interest Fund
DebtModerate8.7%2₹8,822
Axis ESG Integration Strategy Fund
EquityVery High25.9%--₹1,445
Kotak International REIT FOF Fund
EquityVery High4.8%--₹63
Nippon India Quarterly Interval Fund
DebtModerate7.4%--₹58
Nippon India Quarterly Interval Fund
DebtModerate7.0%--₹2
Invesco India ESG Integration Strategy Fund
EquityVery High33.9%--₹547
SBI International Access - US Equity FoF Fund
EquityVery High33.3%--₹940
Aditya Birla Sun Life ESG Integration Strategy Fund
EquityVery High32.4%--₹733
View All

Let's have a closer look

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

Aditya Birla Sun Life International Equity Fund Direct Growth

Fund Performance: The Aditya Birla Sun Life International Equity Fund has given 6.36% annualized returns in the past three years and 9.98% in the last 5 years. The Aditya Birla Sun Life International Equity Fund comes under the Equity category of Aditya Birla Sun Life Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life International Equity Fund via lump sum is ₹1,000 and via SIP is ₹1,000.

Min Investment Amt₹1,000
AUM₹192Cr
1Y Returns16.0%

Aditya Birla Sun Life International Equity Fund Plan B Direct Growth

Fund Performance: The Aditya Birla Sun Life International Equity Fund has given 15.65% annualized returns in the past three years and 12.41% in the last 5 years. The Aditya Birla Sun Life International Equity Fund comes under the Equity category of Aditya Birla Sun Life Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life International Equity Fund via lump sum is ₹1,000 and via SIP is ₹1,000.

Min Investment Amt₹1,000
AUM₹101Cr
1Y Returns26.1%

ICICI Prudential Floating Interest Fund Direct Plan Growth

Fund Performance: The ICICI Prudential Floating Interest Fund has given 7.19% annualized returns in the past three years and 7.39% in the last 5 years. The ICICI Prudential Floating Interest Fund comes under the Debt category of ICICI Prudential Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Floating Interest Fund via lump sum is ₹500 and via SIP is ₹100.

Min Investment Amt₹500
AUM₹8,822Cr
1Y Returns8.7%

Axis ESG Integration Strategy Fund Direct Growth

Fund Performance: The Axis ESG Integration Strategy Fund comes under the Equity category of Axis Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Axis ESG Integration Strategy Fund via lump sum is ₹100 and via SIP is ₹100.

Min Investment Amt₹100
AUM₹1,445Cr
1Y Returns25.9%

Kotak International REIT FOF Direct Growth

Fund Performance: The Kotak International REIT FOF Fund comes under the Equity category of Kotak Mahindra Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Kotak International REIT FOF Fund via lump sum is ₹100 and via SIP is ₹100.

Min Investment Amt₹100
AUM₹63Cr
1Y Returns4.8%

Nippon India Quarterly Interval Fund Series II Retail Plan Direct Growth

Fund Performance: The Nippon India Quarterly Interval Fund has given 5.93% annualized returns in the past three years and 5.36% in the last 5 years. The Nippon India Quarterly Interval Fund comes under the Debt category of Nippon India Mutual Funds.

Min Investment Amt₹5,000
AUM₹58Cr
1Y Returns7.4%

Nippon India Quarterly Interval Fund Series I Retail Plan Direct Growth

Fund Performance: The Nippon India Quarterly Interval Fund has given 5.63% annualized returns in the past three years and 4.77% in the last 5 years. The Nippon India Quarterly Interval Fund comes under the Debt category of Reliance Mutual Funds.

Min Investment Amt₹5,000
AUM₹2Cr
1Y Returns7.0%

Invesco India ESG Integration Strategy Fund Direct Growth

Fund Performance: The Invesco India ESG Integration Strategy Fund comes under the Equity category of Invesco Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Invesco India ESG Integration Strategy Fund via lump sum is ₹1,000 and via SIP is ₹500.

Min Investment Amt₹1,000
AUM₹547Cr
1Y Returns33.9%

SBI International Access US Equity FoF Direct Growth

Fund Performance: The SBI International Access - US Equity FoF Fund comes under the Equity category of SBI Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in SBI International Access - US Equity FoF Fund via lump sum is ₹5,000 and via SIP is ₹500.

Min Investment Amt₹5,000
AUM₹940Cr
1Y Returns33.3%

Aditya Birla Sun Life ESG Integration Strategy Fund Direct Growth

Fund Performance: The Aditya Birla Sun Life ESG Integration Strategy Fund comes under the Equity category of Aditya Birla Sun Life Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life ESG Integration Strategy Fund via lump sum is ₹500 and via SIP is ₹100.

Min Investment Amt₹500
AUM₹733Cr
1Y Returns32.4%

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