Best PGIM India Debt Mutual Funds

A fully-owned subsidiary of Prudential Financial Inc. of the USA, PGIM India Mutual Funds began its journey in 2010. The company brought in its years of experience from the international markets, which helped them gather prominence in India and become one of the leading AMCs. As of 31st March 2021, it has a total asset management valuation of nearly Rs .6522crores.

Currently, the AMC offers more than 20 open-ended mutual fund schemes, including the best PGIM debt mutual funds.

Debt mutual funds invest in money market instruments such as government and corporate bonds, securities, and other market instruments that constitute its portfolio. This mutual fund has different subtypes based on the variety of returns they deliver. For example, funds like short, ultra-short, medium, and long-term funds come with different investment tenure. Also, corporate, gilt, banking and PSU funds invest in various securities, offering a wide range of return prospects.

The advantages of debt funds include comparatively higher liquidity, a low-cost structure, and stable returns. They are also less vulnerable and involve lower risk compared to most equity mutual funds. The downside to debt funds is that they usually offer less significant returns compared to their equity counterparts.

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

The best PGIM debt mutual funds 2025 features more than 10 schemes with various short and long-term options within its portfolio.

Taxability

Besides the classification of the best PGIM debt mutual funds, it’s also vital to understand their taxability. 

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

Long-term Capital Gains Tax: Capital gains on any debt fund realised after the third year of investment is classified as Long-term Capital Gains. If investors redeem the units of their best PGIM debt mutual funds after this period, they are liable to pay 20% as LTCGT after indexation benefits. 

TDS: Debt mutual funds are not subject to TDS.

Factors to Consider Before Investing

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

Investment objective: The first point to consider is the objective of investment. It is vital to be clear about the investment objective as it will help investors to choose the right scheme from the top PGIM debt mutual funds. They can select a plan according to their financial targets and investment horizon to achieve their goals. 

Risk appetite: Mutual fund investments are susceptible to market volatility. Thus, it is imperative to factor in the capacity of digesting risks before investing. Theoretically, debt funds are not prone to market risks but considerably vulnerable to credit and inflation risks. Therefore, it is wise to consider the associated risk factor to determine the best PGIM debt mutual funds before investing.

Past performance of the fund: It is vital to review the earlier performance of any fund before making a decision. Although preceding performance is not a sign of the possible returns, it offers insights into the performance of funds during various market conditions over a long period.

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 returns to expect and the losses one could incur through the course of investment. 

Experience of the fund manager: It is also crucial to check the expertise of a fund manager before choosing any debt mutual funds. This information can indicate whether a fund manager is sufficiently equipped to circumnavigate through severe market conditions. 

Expense ratio: The expense ratio of a fund denotes the aggregated expenses of managing MFs. It is then subtracted from the final returns of that particular fund.

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, depending on the AMC, certain plans may not include this charge. Accordingly, it is crucial to review this pointer before investing.

Direct and regular plans: Direct plans are issued by fund houses. Therefore, no intermediaries are involved. Contrarily, for regular plans, one needs to invest through a third party like a broker. Resultantly, the expenses for direct plans is lower than that of regular ones. Accordingly, direct plans offer a higher NAV when compared to regular plans.

Selecting the best PGIM debt mutual funds might be a challenging task for inexperienced investors. However, evaluating the points mentioned above can help understand mutual fund dynamics and facilitate investing activities.