Best Mirae Asset Debt Mutual Funds

With a presence in 15 countries, Mirae Asset Global Investments is a diversified asset manager and an asset management arm of Mirae Asset Financial Group. According to data, as of December 31, 2020, this AMC had USD554 billion worth of assets under management.

This AMC currently offers more than 30 mutual fund schemes distributed across equity, debt and hybrid fund categories. This includes the best Mirae Asset debt mutual funds.

Debt mutual funds are a scheme of mutual funds that makes investments in fixed income instruments such as treasury bills, government securities, corporate bonds, government bonds, money market instruments and corporate debt securities, etc. These funds are also known as bond funds or fixed income funds.

There are numerous advantages of making investments in the best Mirae Asset debt mutual funds 2023, including reasonable safety, low cost structure, comparatively stable returns, and high liquidity. The primary reason behind investing in these funds is earning capital appreciation and a steady interest income. 

The top Mirae Asset debt mutual funds are segregated into various categories. Some of the fund schemes make investments in short-term securities, whereas some schemes invest in the ones with a long tenure. The risk factor also varies among these categories. Hence, investors need to select a category that matches their risk appetite and investment horizon.

These funds invest across all security classes, which ensures optimised returns. Having mentioned this, one must keep in mind that these funds do not guarantee earnings. These returns are usually predictable, so a majority of the conservative investors are drawn towards these funds. Debt funds are also ideal for individuals having both short and medium-term investment horizons.

The current mutual fund offerings of this AMC include more than 5 debt mutual funds.

Taxability

Before investing, one must understand the taxability of capital earnings from these funds.

Short-term Capital Gains Tax: The taxation rate on the capital gains of a debt fund depends on the holding period. The capital gains generated by redeeming debt fund units within a holding period of less than 36 months can be termed short-term capital gains or STCG. These gains are added to the investor’s taxable income and these are taxed at the slab rate applicable.

Long-term Capital Gains Tax: The gains made at a holding period of more than 36 months are LTCG or long-term capital gains. These gains are taxed at a 20% rate after indexation. The investor is also levied with applicable surcharge and cess on tax.

Factors to Consider Before Investing

Besides being familiar with the above-mentioned facts of the best Mirae Asset debt mutual funds, an investor must be aware of several other parameters. 

Risks: There are particular risks associated with debt mutual funds, including credit risk and interest rate risk. A credit risk happens when a fund manager invests the client’s money in low credit-rated securities. This might result in a high default probability. In an interest rate risk, the prices of the bonds can fall when there is a rise in the rates of interest, thereby resulting in low returns on the investor’s investment.

Returns: Even though the best Mirae Asset debt mutual funds make investments in fixed income securities, they do not commit guaranteed returns. The NAV of these funds reduces with an increase in the overall rates of interest in the economy. 

Investment objective: An investment objective defines the investor’s purpose behind making investments in a specific security or asset. Before opting for the best Mirae Asset debt mutual fund, an investor must be aware of his or her investment objective. Since every debt fund caters to a particular investment goal, being clear with the investment objective would allow investors to select the most suitable scheme.

Expense ratio: Fund managers charge a certain fee from an investor for managing the money. This fee is referred to as the expense ratio. The expense ratio is usually not more than 2.25% of the total assets present in a fund. 

Experience of the fund manager: The competence of a fund manager is accountable for a fund’s performance. Therefore, a majority of the investors put significant emphasis on a fund manager and the management team. The fund manager is judged based on various parameters, including experience level, ability to identify scripts compared to their peers, etc.

Past performance of the fund:  A fund’s past performance does not indicate its probable future outcomes. However, it can provide valuable insights regarding the market, which can be helpful in making informed decisions. 

Investing can prove to be challenging for first-time investors. However, having basic knowledge about debt mutual funds and referring to this article as a guide would make it simpler to select an apt fund among the best Mirae Asset debt mutual funds.