Top Debt Mutual Funds to invest in 2016 in India

Top Debt Mutual Funds to invest in India in 2016Top Debt Mutual Funds to invest in 2016 in India


We have seen that RBI continues to cut rates and banks would continue to reduce FD interest rates. If you are planning to invest in fixed income schemes, but want to get higher returns than bank FD’s, best way is to invest in top debt mutual funds. I have analyzed best debt funds to invest in, which have been giving good returns in last 5 years. Which are the top debt mutual funds to invest in 2016 in India? Which are the best debt funds to invest in, which are  good for short term and long term?

Also Read: Best Sector Mutual Funds to invest in 2016

Parameters on how picked up Top Debt Mutual Funds to invest


These debt mutual fund schemes have been analyzed and shortlisted based on some of the important parameters.

  • These are picked based on highest returns received in the last 5 years.
  • These debt mutual fund schemes which are rated as 5-Star (5/5), 4-Star (4/5) and 3-Star (3/5) by value research online.
  • Funds, which are rated by Crisil as Rank-1, Rank-2, Rank-3 and Rank-4 which indicates top performance across various market cycles. Two funds have not been rated by Crisil, however, I have picked the same based on other parameters.
  • AUM (Assets under management) > Rs 100 Crores. This proves investor confidence among these top 10 mutual funds. As an exception, I have considered one good fund, which has an AUM of Rs 97 Crores.
  • Some of the funds might be a repetition from my earlier recommendation.

Top Debt Mutual Funds to invest in 2016 in India


I have segregated them in under various heads like the ultra short term, income funds and gilt mutual funds.

1) Ultra Short Term Debt funds


Ultra short-term funds invest in fixed-income instruments which are generally liquid and have short term maturities within 90 days. These short term funds offer investors good protection against interest rate risk compared to other funds. An investor who is willing to invest for 3-9 months can invest in these ultra short term mutual funds. I advise you to invest in these debt mutual fund schemes for at least for 3-9 months to get good returns.

2) Debt – Income funds


Debt income funds invest in various fixed income options, maturing between medium term to long term. If you are willing to park your money for medium term to long term of 1 to 5 years, you can invest in these income funds. Note that these funds does not limit to investing in Govt bonds, but invests in corporate bonds too.

3) Gilt-Medium/Long Term


Gilt Funds are those funds that invest only in government securities. They debt mutual fund schemes are preferred to conservative investors who wish to invest in indirectly in government bonds. Since gilt funds invest only in government bonds, investors are protected from credit risk.

Also Read: Top Mid-cap Mutual Funds to invest in India

List of Top Debt Mutual Funds to invest in 2016 in India

Conclusion: I believe in investing in these debt mutual funds which gives higher returns compared to bank FD interest rates. If you can invest for at least 36 months in income/gilt mutual funds, you can get indexation benefit and tax on such debt funds would be very low.

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Suresh
Top Debt Mutual Funds to invest in 2016 in India

39 Comments

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  1. Is it good time to come out of hdfc top 200, idfc premier equity regular fund(G), dsp BR top 100?

     

    All are laggards for quite some time now…

    1. 100% agree with you. You can investt in better funds.

  2. Dear sir, 

     

    I want to invest Rs. 200000 in first week of October as my FD is getting mature in some Debt fund for 1 year.

     

    Can you please suggest which Debt Category should I opt ? Will it be safer than FD as per current market scenario? I want to devide the amount in 4-5 parts.

     

    Also, suggest some good funds in the suggested category?

    Thankyou

    1. You can invest in 3-4 debt mutual funds like ICICI Pru income opps fund, HDFC Midterm opps fund and L&T Gilt fund

  3. Hi Suresh,  I have received some money from p. F.  For last job.  Could you suggest me the best mutual fund for investment and also I will plan to start 5—10 thousand for SIP, can you suggest the fund name.  I m 36 years old one,, 13 years daughter. Regards

    1. Hi Mukesh, You can invest your lumpsum in debt funds and then STP (monthly transfer the amount) through SIP to equity funds. You can invest in Large cap funds to start with like Birla SL Frontline equity fund, ICICI Focussed blue chip fund, ICICI Pru Top 100 equity fund etc.,

      1. Thanks Suresh for response could you share me the good portfolio ratio for equity, debt, gold fund accord to my age 37, 13 year daughter. 

        Regards 

         

         

  4. Respected sir, i m 38 yr old, totally unknown about term plans, should i go through LIC (big amt of premuum) or private insurance companies (affordable premium) ? Is pvt co are making loss ? Is it safer than LIC ? what should i do ? Kindly suggest please..

    1. You can consider private insurance companies which has high claim settlement ratios like ICICI Pru life and HDFC Pru life

      1. Thank u very much sir

  5. Hi Suresh

    I want to invest Rs. 60000 in first week of September as my FD is getting mature in some Debt fund for 1 year.

    Can you please suggest which Debt Category should I opt ? Will it be safer than FD as per current market scenario?

    Also, suggest some good funds in the suggested category?

    1. Hi Mohit, For 1 year, go for short term debt funds

      1. Hi Suresh.

        I was thinking to divide 50-50% in any two of the below 3.

        1) Birla Sun Life Short Term Opportunities Fund – Retail Plan (G)    – (Credit Opp fund)
        2) Birla Sun Life Short Term Fund – Direct Plan (G)  (Debt Short Term Fund)
        3) Birla Sun Life Treasury Optimizer Fund

        Can you please suggest if selection is fine or a chnage is required?

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