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Best L&T 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 2022 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 Lt Mutual Funds in India

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Aditya Birla Sun Life International Equity FundEquityVery High6.4%--₹107
Aditya Birla Sun Life International Equity FundEquityVery High26.1%--₹102
ICICI Prudential Floating Interest FundDebtLow to Moderate5.0%2₹11,869
Kotak International REIT FOF FundOtherVery High-0.3%--₹132
SBI International Access - US Equity FoF FundOtherVery HighNA--₹1,104
Mirae Asset Global X Artificial Intelligence & Technology ETF FoF FundOtherVery HighNA--₹41
UTI Quarterly Interval FundDebtLow3.1%--₹4
UTI Quarterly Interval FundDebtLow3.3%--₹4
UTI Quarterly Interval FundDebtLow3.2%--₹8
L&T FMP Series XVI Plan A (1223 Days) FundDebtLow to Moderate5.5%--₹80
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 Plan A Direct Growth

Fund Performance: The Aditya Birla Sun Life International Equity Fund has given 9.83% annualized returns in the past three years and 10.87% in the last 5 years. The Aditya Birla Sun Life International Equity Fund belongs to 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₹107Cr
1Y Returns6.4%

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 belongs to 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₹102Cr
1Y Returns26.1%

ICICI Prudential Floating Interest Fund Direct Plan Growth

Fund Performance: The ICICI Prudential Floating Interest Fund has given 6.43% annualized returns in the past three years and 7.24% in the last 5 years. The ICICI Prudential Floating Interest Fund belongs to 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₹11,869Cr
1Y Returns5.0%

Kotak International REIT FOF Direct Growth

Fund Performance: The Kotak International REIT FOF Fund belongs to the Other 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 ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹132Cr
1Y Returns-0.3%

SBI International Access US Equity FoF Direct Growth

Fund Performance: The SBI International Access - US Equity FoF Fund belongs to the Other 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₹1,104Cr
1Y ReturnsNA

Mirae Asset Global X Artificial Intelligence & Technology ETF FoF Direct Growth

Fund Performance: The Mirae Asset Global X Artificial Intelligence & Technology ETF FoF Fund belongs to the Other category of Mirae Asset Mutual Funds.

Minimum Investment Amount: The minimum amount required to invest in Mirae Asset Global X Artificial Intelligence & Technology ETF FoF Fund via lump sum is ₹5,000 and via SIP is ₹1,000.

Min Investment Amt₹5,000
AUM₹41Cr
1Y ReturnsNA

UTI Quarterly Interval Fund Series 1 Direct Growth

Fund Performance: The UTI Quarterly Interval Fund has given 4.01% annualized returns in the past three years and 5.24% in the last 5 years. The UTI Quarterly Interval Fund belongs to the Debt category of UTI Mutual Funds.

Minimum Investment Amount:

Min Investment Amt₹1,00,00,000
AUM₹4Cr
1Y Returns3.1%

UTI Quarterly Interval Fund Series III Direct Growth

Fund Performance: The UTI Quarterly Interval Fund has given 4.32% annualized returns in the past three years and 5.48% in the last 5 years. The UTI Quarterly Interval Fund belongs to the Debt category of UTI Mutual Funds.

Minimum Investment Amount:

Min Investment Amt₹10,000
AUM₹4Cr
1Y Returns3.3%

UTI Quarterly Interval Fund Series VI Direct Growth

Fund Performance: The UTI Quarterly Interval Fund has given 4.35% annualized returns in the past three years and 5.46% in the last 5 years. The UTI Quarterly Interval Fund belongs to the Debt category of UTI Mutual Funds.

Minimum Investment Amount:

Min Investment Amt₹10,000
AUM₹8Cr
1Y Returns3.2%

L&T FMP Series XVI Plan A (1223 Days) Direct Growth

Fund Performance: The L&T FMP Series XVI Plan A (1223 Days) Fund belongs to the Debt category of L&T Mutual Funds.

Minimum Investment Amount:

Min Investment Amt₹5,000
AUM₹80Cr
1Y Returns5.5%

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