10 Best Long Term Bond Funds in India 2024
Government Institutions, towns, and corporations issue long term bonds. These are basically loans with terms often exceeding ten years. They raise capital for major initiatives or to fund ongoing operations by offering an alternative to traditional investment methods like stocks and real estate. They allow you to look at alternatives to traditional investment options like stocks and gold. This article delves into the intricacies of some of the best long term bond funds, highlighting their benefits and examining some of the top options for investors seeking stability and potential returns over extended periods.
Top 5 Best Long Term Bond Funds
ICICI Prudential Long Term Bond Fund (Erstwhile ICICI Prudential Income Plan):
- Objective: To invest in safe debt and money market tools for profit.
- Launch Date: November 25th, 1999.
- Risk Level: Moderate.
- Annualised Return: Around 8.3%.
- 2023 Return: Approximately 6.8%.
- Ranking: 32nd in the medium to long term category.
IDFC Bond Fund Long Term Plan (Erstwhile IDFC Super Saver Income Fund - Investment Plan):
- Objective: Aimed at steady profits through safe fixed-income assets.
- Launch Date: July 14th, 2000.
- Risk Level: Moderate.
- Annualised Return: About 7.8%.
- 2023 Return: Around 6.0%.
HDFC Income Fund:
- Objective: Maximising profits while balancing safety and returns.
- Launch Date: September 11th, 2000.
- Risk Level: Moderate.
- Annualised Return: About 7.3%.
- 2023 Return: Approximately 6.1%.
- Ranking: 29th in the medium to long term category.
UTI Bond Fund (Erstwhile UTI - Bond Fund):
- Objective: Investing in debt and money market tools with flexible portfolio adjustments.
- Launch Date: May 4th, 1998.
- Risk Level: Moderate.
- Annualised Return: Approximately 7.6%.
- 2023 Return: Around 6.4%.
- Ranking: 11th in the medium to long term category.
Kotak Bond Fund (Erstwhile Kotak Bond Regular Plan Growth):
- Objective: Building a diversified collection of debt and money market tools.
- Launch Date: November 25th, 1999.
- Risk Level: Moderate.
- Annualised Return: About 8.3%.
- 2023 Return: Approximately 6.8%.
Ranking: 32nd in the medium to long term category.
Understanding Long Duration Funds
Long term bond funds are investment vehicles. Like mutual funds, they pool money from various investors to make a variety of investments. Debt funds, also known as long duration funds, offer money to reputable businesses for a minimum of four to seven years. Due to the loan's duration, the investment is intrinsically riskier than other debt funds because it is essentially exposed to the entire economic cycle.
These schemes are best when you expect interest rates to stay the same or go down for a while. They're a bit riskier but usually give similar returns to bank fixed deposits in the same time frame.
Investing in long term bonds and Investing in Mutual funds: Know the difference
| Parameter | Long Term Bonds | Mutual Funds |
| Focus of Investment | Bond funds primarily concentrate on fixed-income securities, offering stability and preserving capital. | Mutual funds encompass various asset classes, providing diversification and potential for growth. |
| Investment Options | Bond funds lend for predetermined lengths of time and focus on fixed-income assets.
| Using mutual funds to invest in a larger variety of stocks, bonds, and other securities will increase diversity.
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| Investor Preferences | Bond funds are favoured by risk-averse investors seeking steady income and capital preservation. | These funds aim for growth and income generation. They offer promising potential returns to investors. |
Conclusion
Long term bond funds provide enhanced diversification. Skilled professionals with affordable minimum investment requirements manage these. They ensure investor protection and confidence in investment decisions by providing convenient liquidity and being overseen by regulatory bodies. Like any other investment, making well-informed decisions needs considerable thought. AUM, CAGR, expense ratio and exit load are essential factors to consider when rating bond funds. These factors determine trust, cost, and potential fees, which are crucial for informed investing decisions. Make wise investing and guidance decisions by using INDmoney.
What are long term bond funds, and why are they considered a wise investment choice?
The goal of long term bond funds is to generate profits over an extended period of time by investing in secure debt and money market securities. They are appropriate for investors looking to balance risk and earn consistent returns.
What part do knowledgeable fund managers play in investing in bond funds?
Skilled fund managers who perform in-depth investment analysis oversee these long term funds. These specialists make investment judgements based on market research, fund objectives, and economic conditions.
What is the bond fund's liquidity component, and how does it help investors?
Bond funds give investors simple access to liquidity, enabling them to purchase or sell units on business days at their net asset value (NAV). Because of its flexibility, investors can access their money as needed, giving them liquidity that other investment options with fewer trading chances might not offer.
How is investor safety in bond fund investments ensured by regulatory supervision?
Government authorities keep a tight eye on bond funds to make sure that investors are treated fairly, laws and regulations are followed, and openness is maintained. By enhancing the integrity of the bond fund industry, this regulatory control offers investors a certain degree of security and protection.
What are the advantages for investors using SIPs to invest in mutual funds?
Using SIPs to invest in mutual funds has a number of advantages. It facilitates long term wealth growth, offers the benefit of rupee cost averaging, and makes investing simple and disciplined.