The analysis of debt funds’ performance over the year ending in June 2024 reveals a challenging landscape, with a majority of funds failing to outperform their respective benchmarks. Across most categories, underperforming schemes outnumber those that managed to deliver better-than-benchmark returns, with the exception of the floater funds category, where a higher number of funds surpassed expectations.
In the liquid fund category, Bank of India Liquid Fund stands out as the sole performer, edging past its benchmark by a slim margin of 0.04% over the one-year period. This outperformance highlights the rarity of success in this segment during the period under review.
Among the 22 money market schemes evaluated, only four managed to outperform their benchmarks, and even then, the margins were narrow. Aditya Birla Sun Life Money Manager Fund and Nippon India Money Market Fund led the pack, achieving an alpha of 0.05% and 0.03%, respectively. Tata Money Market Fund and UTI Money Market Fund followed, rounding out the group of outperformers in this category.
The corporate bond fund category saw a slightly better performance, with 5 out of 22 schemes, or 23%, outperforming their benchmarks. Aditya Birla Sun Life Corporate Bond Fund and HDFC Corporate Bond Fund emerged as the top performers, each delivering an excess return of 0.55% and 0.54%, respectively. Other notable performers include ICICI Prudential Corporate Bond Fund, Kotak Corporate Bond Fund, and Nippon India Corporate Bond Fund.
This category had only two funds that managed to beat their benchmarks. ICICI Prudential Short Term Fund topped the list with an alpha of 0.19%, closely followed by HDFC Short Term Debt Fund, which generated an excess return of 0.18%.
In the low-duration fund category, ICICI Prudential Savings Fund distinguished itself as the only fund to outperform, delivering an alpha of 0.38% over its benchmark.
The ultra-short duration funds category struggled, with no fund managing to beat its benchmark. Aditya Birla Sun Life Savings Fund and Mirae Asset Ultra Short Duration Fund had the least underperformance, trailing their benchmarks by 0.14% and 0.21%, respectively.
Out of the 30 schemes in the overnight fund category, only Quant Overnight Fund managed to outperform, achieving an alpha of 0.35%.
In this category, 4 out of 21 schemes succeeded in outperforming their benchmarks. ICICI Prudential Banking & PSU Debt Fund and DSP Banking & PSU Debt Fund were the top performers, delivering excess returns of 0.40% and 0.34%, respectively. Invesco India Banking and PSU Fund and Kotak Banking and PSU Debt Fund followed with marginal outperformance.
The floater funds category was a rare bright spot, with 9 out of 13 schemes surpassing their benchmarks. DSP Floater Fund and SBI Floating Rate Debt Fund led with impressive outperformance of 1.20% and 1.04%, respectively. HDFC Floating Rate Debt Fund and Baroda BNP Paribas Floater Fund also delivered solid returns, outperforming by 0.68% and 0.59%, respectively.
In the gilt fund category, 5 out of 23 schemes managed to outperform their benchmarks. Bandhan GSF Investment Fund topped the list with a significant outperformance of 1.80%, followed by DSP Gilt Fund with 0.93%. Axis Gilt Fund, Invesco India Gilt Fund, and Edelweiss Government Securities Fund also delivered positive results, with outperformance of 0.69%, 0.66%, and 0.46%, respectively.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Aug 27, 2024, 4:50 PM IST
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