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Corporate Bond Mutual Funds
- Average returns - Dynamic
- Number of funds - (Static)
What is a Corporate Bond Fund?
A Corporate Bond Fund is a debt mutual fund which invests a primary part of its portfolio in the highest-rated corporate bonds. With highest rated securities these funds minimise credit risk.
Advantages of Corporate Bond Funds
Good returns
These funds have the potential to generate attractive returns on your investment which helps in growing your corpus with added stability.
Liquidity
High-rated bonds are traded in volume making the fund easily liquid. So, if you need quick funds, you can redeem your investments without losing out on potential returns
Low credit risk
Since the fund invests in high-rated bonds, the credit risk is minimal. Bonds carrying a high credit rating have proven track record of repayment and do not tend to default.
Explore Corporate Bond Funds
AUM: 23427(Cr)
Risk: Very High
- MIN. INVESTMENT 500
- 5 YRS RETURNS 33.32%
- Invest (Per Month) ₹10000
- Get (30 Yrs) ₹24,850*
*Projections/estimations is backtested using historical data.
- AUM: 23427(Cr)
- Risk: High
- MIN. INVESTMENT 1000
- 5 YRS RETURNS 33.32%
- Invest (Per Month) ₹15000
- Get (30 Yrs) ₹34,850*
*Projections/estimations is backtested using historical data.
Corporate Bond Funds Returns Calculator
REGULAR INVESTMENT
SIP
Invest systematically in regular amounts and build a corpus with a disciplined investing habit.
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Lump sum
Invest once with the facility of lump sum investing and save at your will. Time the market correctly and earn good returns.
INVEST LUMPSUMTotal Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
Total Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
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Understanding Corporate Bond Funds
Table of Contents
What are Corporate Bond Funds?
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A type of open-ended debt mutual fund, a Corporate Bond Fund invests at least 80% of its portfolio in corporate bonds rated AAA or above by reputed credit rating agencies. These funds offer stable and attractive returns with limited credit risks.
What are the features of Corporate Bond Funds?
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Offers stable returns on investment with minimal credit risk
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Flexibility to own differing duration securities minimises credit risk
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There’s no capping on the maximum investment amount
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You can get better returns compared to fixed deposits
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The funds aim to grow the portfolio through interest earned and also through the rise in the price of the underlying securities
Things to keep in mind when investing in Corporate Bond Funds
Check the expense ratio of such schemes. A high ratio eats into the fund’s returns and should be avoided
Compare Corporate Bond Funds on their returns. A fund with the highest return is better
Check the portfolio for the credit rating of the underlying securities
What are the types of risks that Corporate Bond Funds face?
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Credit risk
Risk of default on the debt instrument
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Interest rate risk
Risk of rising interest rates, which reduces the value of debt instruments
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Inflation risk
Risk of inflation reducing the returns from the debt fund
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Liquidity risk
Risk of not being able to trade in debt instruments
What is the tax implication of Corporate Bond Funds?
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Returns earned are taxed at your income tax slab rates
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Dividends earned, if any, are taxed at your income tax slab rate
What are the payout options?
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Dividend option
Earn dividends on your investment at regular intervals
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Growth option
Accumulate the returns over the investment tenure and get a lump sum amount on redemption
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FAQs On Corporate Bond Funds
Corporate Bond Funds are debt funds that invest a minimum of 80% of their portfolio in companies with the highest credit ratings.
The bond price of a Corporate Bond Fund is the present value of the bond’s future cash flows.
Corporate Bond Funds invest in bonds of companies with the highest of credit ratings up to at least 80% of their holdings.
Corporate Bond Funds are taxed like any other debt fund. Upon redemption of a fund with holding period of less than 36 months (short term capital gain), you would be taxed at the prevailing tax slab rates. In the case of long term capital gains, i.e. redemption of funds with holding period of 36+ months, the tax rate applicable is 20%.
Yes, you can redeem your Corporate Bond Fund investment at any time.
Types of Debt Funds
Funds Based On Duration
Funds Based On Portfolio Allocation
Other asset class funds
Equity Fund
Give your savings the growth they deserve. Invest in Equity Funds and unlock the potential of long-term growth
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Fund of Funds
Mutual funds that invest in other mutual funds both in India and globally
Hybrid Funds
Get a mix of equity, debt and other asset classes for a diversified portfolio
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Index Fund
Passively-managed mutual funds tracking a particular index
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ETF Funds
Invest in funds listed and traded on the stock exchange