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Best Medium Duration Mutual Funds
- Average returns - Dynamic
- Number of funds - (Static)
What is a Medium Duration Fund?
A Medium Duration Fund is a debt mutual fund that invests in short-term debt instruments. The Macaulay duration of the fund ranges between 3 and 4 years.
Advantages of Medium Duration Funds
Good returns
You can earn good returns on investments which can be higher than fixed deposits if you stay invested.
Medium-term investment
If you want to invest for 3 years or more for any medium-term financial goal, these funds are a suitable choice.
Diversified portfolio
You get an actively managed, diversified portfolio that invests in high-quality bonds and debt instruments.
Explore Medium Duration 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.
Medium Duration Funds Returns Calculator
REGULAR INVESTMENT
SIP
Invest systematically in regular amounts and build a corpus with a disciplined investing habit.
START SIPONE TIME INVESTMENT
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 Medium Duration Funds
Table of Contents
What are Medium Duration Funds?
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A type of open-ended debt mutual fund, Medium Duration Funds invest in debt securities in such a manner that the Macaulay portfolio duration lies between 3 and 4 years, making it suitable for medium-term investors.
What are the features of medium duration mutual funds?
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Offers stable returns on investment
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Low volatility risk since the fund primarily invests in debt and money market securities
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There’s no capping on the maximum investment amount
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Returns from these funds can go up to 10% p.a.
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You can get better returns compared to fixed deposits while minimising investment risks
Things to keep in mind when investing in Medium Duration Funds
These funds face some extent of credit risk as they invest in lesser-rated debt securities
Check the expense ratio of such schemes. A high ratio eats into the fund’s returns and should be avoided
Compare Medium Duration Funds on their returns. A fund with the highest return is better
These funds face interest rate risks since they invest in long-term debt securities, too, which might fall in value if interest rates are cut.
What are the types of risks that Medium Duration 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 Medium Duration 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 Medium Duration Funds
Medium Duration Funds invest in debt securities and money market instruments.
Medium Duration Funds are best for
Investors who want to avoid equity risks
Investors looking for better returns than bank deposits
Investors with a time horizon of less than 5 years
The average rate of return is 5-7%.
Yes, new investors with an investment horizon/financial goals spanning around 3-4 years can benefit well from Medium Duration Funds.
You should stay invested in a Medium Duration Fund for 3+ years.
Types of Debt Mutual Funds
Funds Based On Duration
Funds Based On Portfolio Allocation
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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
Know More
ETF Funds
Invest in funds listed and traded on the stock exchange