Best ICICI Prudential Debt Mutual Funds

ICICI Prudential Mutual Funds began its operations in 1993 in a joint venture between the ICICI Bank and Prudential PLC from the UK. Currently, ICICI Prudential is one of the top 5 AMCs of this country, with a portfolio that amounts to Rs.405405.92 crore as of March 2021.

Currently, this AMC offers over 40 mutual fund schemes of various types, including the best ICICI Prudential debt mutual funds.

Top ICICI Prudential debt mutual funds focus on money market and debt instruments. These fund managers actively invest in bonds and securities by the government, corporate entities, and financial institutions. This is a more risk-averse investment option than stocks, equity funds, and equity-based hybrid funds. The classification of debt funds is premised on the underlying securities’ maturity periods or issuer. Hence, it includes overnight funds, liquid funds, dynamic bond funds, gilt funds, floater funds, etc.

Debt mutual funds have different sub-types, offering a variety of returns. For example, there are short, ultra-short, medium, and long-term funds, with the constituent debt instruments having varying maturity tenures. Also, corporate, gilt, banking and PSU funds involve investments in bonds by different kinds of issuers. For instance, gilt funds invest in government-issued securities. 

The advantages of debt funds are their low-cost structure, comparatively high liquidity, and stable returns. These are not as volatile and risk-prone compared to equity mutual funds. The downside to debt funds is that they usually offer less significant returns than their equity counterparts. 

Nevertheless, the exact scale of these returns and shortcomings vary, depending on the type of debt fund.