Debt funds are Mutual Fund schemes that invest in fixed-income securities such as government and corporate bonds, money market instruments, and corporate debt. These funds aim to provide capital appreciation and steady income, making them a suitable option for risk-averse investors. Known for their relatively stable returns, debt funds are less volatile compared to equity funds. In this article, we explore the performance of debt funds in 2024, based on 1-yr absolute returns.
| Name | AUM (₹ in crore) | Expense Ratio (%) | Absolute Returns – 1Y (%) |
| HDFC Long Duration Debt Fund | 5,483.07 | 0.3 | 13.58 |
| SBI Long Duration Fund | 2,668.85 | 0.23 | 13.38 |
| Bandhan G-Sec-Invest | 3,684.50 | 0.52 | 12.80 |
| Nippon India Nivesh Lakshya Fund | 9,114.67 | 0.3 | 12.77 |
| Bandhan Dynamic Bond Fund | 3,055.31 | 0.71 | 12.43 |
| DSP Gilt Fund | 1,538.68 | 0.57 | 12.34 |
| Invesco India Gilt Fund | 1,354.70 | 0.46 | 12.15 |
| DSP Strategic Bond Fund | 1,717.47 | 0.53 | 12.01 |
| Edelweiss CRISIL IBX 50:50 Gilt Plus SDL April 2037 Index Fund | 1,065.03 | 0.2 | 11.96 |
| Aditya Birla SL Medium Term Plan | 1,981.28 | 0.85 | 11.90 |
Note: The debt mutual funds list provided here is as of December 11, 2024. The funds are selected with an AUM of more than ₹1,000 crore and sorted based on the 1-year absolute returns. The returns are from Dec 11, 2023 to Dec 11, 2024.
HDFC Long Duration Debt Fund is managed by HDFC Asset Management Company and was launched on January 20, 2023. The minimum investment required is ₹100. The fund tracks the Nifty Long Duration Debt Fund Index – A-III as its benchmark. The 1year benchmark returns were 11.82%. As of September 30, 2024, since its inception, the fund delivered returns of 10.87%. As of December 10, 2024, its NAV is ₹11.96.
SBI Mutual Fund launched the SBI Long Duration Fund on December 21, 2022. The minimum investment required is ₹5,000. The fund tracks the CRISIL Long Duration Debt A-III Index as its benchmark. The 1year benchmark returns were 10.41%. Since its inception, the fund delivered returns of 9.42%. As of December 10, 2024, its NAV is ₹11.99.
Managed by Bandhan Mutual Fund, the fund was launched on March 9, 2003. The minimum investment required is ₹1,000. The fund tracks the CRISIL Dynamic Gilt Index as its benchmark. The 1year benchmark returns were 10.69%. As of November 30, 2024, since its inception, the fund delivered returns of 7.95%. As of December 10, 2024, its NAV is ₹34.23.
Nippon India Mutual Fund manages the Nippon India Nivesh Lakshya Fund. The fund was launched on July 6, 2018. The minimum investment required is ₹5,000. The fund tracks the CRISIL Long Duration Debt A-III Index as its benchmark. The 1year benchmark returns were 10.41%. As of November 30, 2024, since its inception, the fund delivered returns of 8.74%. As of December 10, 2024, its NAV is ₹17.21.
Bandhan Dynamic Bond Fund is from Bandhan Mutual Fund. The fund was launched on June 25, 2002. The minimum investment required is ₹1,000. The fund tracks the NIFTY Composite Debt Index A-III as its benchmark. The 1year benchmark returns were 8.98%. As of November 30, 2024, since its inception, the fund delivered returns of 7.71%. As of December 10, 2024, its NAV is ₹33.02.
A key driver of the performance of the debt funds in 2024 was India’s inclusion in global bond indices, which enhanced demand-supply dynamics for government bonds. This development, combined with expectations of interest rate cuts, created a favourable environment for long-duration funds, which delivered returns exceeding 10%.
In November 2024, the assets of income/debt-oriented schemes surged to an all-time high of ₹16.86 lakh crore.
October marked another milestone, with income/debt-oriented schemes achieving an all-time high AUM of ₹16.64 lakh crore. The category witnessed inflows of ₹1.57 lakh crore, the second-highest for the year. Notably, 86% of these inflows were concentrated in liquid, overnight, and money market funds, which collectively garnered ₹1.35 lakh crore, reflecting a preference for short-term instruments.
The year 2024 proved to be a pivotal one for debt mutual funds, with significant growth in assets and performance across categories. Debt funds closed fiscal 2024 with an AUM of ₹12.62 lakh crore, marking a 7% increase from the previous fiscal, a notable recovery after consecutive contractions of 2% in FY 2022 and 9% in FY 2023.
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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.
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