Debt funds are basically categorized based on their maturity, and medium-duration funds similarly fall under debt funds. Medium duration mutual funds are open-ended debt mutual funds mandated to invest in securities with a maturity period of 3 to 4 years. These funds carry the inherent risks of debt funds but are also known to provide better returns than low-duration funds.
You can find some of the best medium duration debt funds in 2023 in the table provided below.
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| Fund Name | Category | Risk | 1Y Returns | Rating | Fund Size(in Cr) |
|---|---|---|---|---|---|
Aditya Birla Sun Life Medium Term Plan Fund | Debt | Moderately High | 7.0% | 5 | ₹1,892 |
Aditya Birla Sun Life Medium Term Fund | Debt | Moderately High | 7.3% | 5 | ₹1,892 |
Nippon India Strategic Debt Fund | Debt | Moderate | 7.1% | 5 | ₹122 |
Tata Medium Term Fund | Debt | Moderate | 3.6% | 4 | ₹77 |
ICICI Prudential Medium Term Bond Fund | Debt | Moderately High | 7.2% | 4 | ₹6,452 |
Axis Strategic Bond Fund | Debt | Moderately High | 7.3% | 4 | ₹1,924 |
HSBC Medium Duration Fund | Debt | Moderate | 7.1% | 4 | ₹689 |
Kotak Medium Term Fund | Debt | Moderately High | 6.6% | 3 | ₹1,882 |
HDFC Medium Term Debt Fund | Debt | Moderate | 7.0% | 3 | ₹4,236 |
UTI Medium Duration Fund | Debt | Moderately High | 6.3% | 3 | ₹43 |
SBI Magnum Medium Duration Fund | Debt | Moderately High | 7.3% | 3 | ₹6,970 |
DSP Bond Fund | Debt | Moderate | 6.7% | 2 | ₹347 |
Baroda BNP Paribas Medium Duration Fund | Debt | Moderate | 6.8% | 2 | ₹36 |
Bandhan Bond Fund | Debt | Moderate | 6.0% | 2 | ₹1,702 |
Union Medium Duration Fund | Debt | Moderate | 6.1% | 2 | ₹126 |
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These funds are found to be the most suitable to:
These funds come with risks attached to them, but interest and credit risks are present by default in any mutual fund. These funds somehow hold a moderate or medium risk factor associated with them, which can suit investors who seek to be vulnerable to medium risks.
Investors who want to stay invested for a medium duration (from 3 to 5 years) can easily invest in these funds and also benefit from them. Although the returns are not guaranteed, they are known to be least affected by market movements and provide predictable returns during this duration.
The major factors you will have to look into before finding and investing in the best medium duration debt funds are:
The risks that come along with this fund are:
Medium duration funds are the ones ranging from a period of 3 to 4 years. Therefore, only the investors who can invest for this period can find these funds suitable.
These funds can be a suitable form of investment for investors who can stay invested for at least 3-5 years and also have a moderate risk tolerance.
These funds are best suited for investors who can stay invested for a little over three years. They hold moderate risks and also provide much better returns than a bank deposit.
The most crucial risks of these funds are interest rate risks (provided that it is an investment of more than a year, it is subject to interest rate fluctuations) and credit risks (this is a default risk by the issuer).
Medium-duration funds come under the category of debt funds, whose underlying assets fall under securities, bonds, and more.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Here are some notable advantages of investing in the best medium duration mutual funds –
Low-risk option: Medium duration funds involve less risk than pure equity schemes and equity-oriented MFs. Thus, they are suitable to dilute the concentrated stake in a portfolio and hedge against market volatility.
Suitable for long-term investors: Best medium duration mutual funds suit a mid-to-long-term approach. They can be an ideal choice if you are searching for an investment option with higher returns than bank deposits and less risk than equity funds.
Mode of investments: You can invest in a medium duration mutual fund scheme of choice via SIP or lump sum method. In SIP or Systematic Investment Plans, you need to pay a specified amount at regular intervals. It can be a monthly, half-yearly, or quarterly system, depending on your preference. As for the lump-sum method, it is self-explanatory. The amount for both approaches can vary from one scheme to another. In most cases, the minimum SIP amount is Rs.500, and the lump-sum amount is Rs.1000.
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The Aditya Birla Sun Life Medium Term Plan Fund has given 13.27% annualized returns in the past three years and 8.85% in the last 5 years. The Aditya Birla Sun Life Medium Term Plan Fund belongs to the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Medium Term Plan Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,892Cr |
| 1Y Returns | 7.0% |
Fund Performance: The Aditya Birla Sun Life Medium Term Fund has given 13.26% annualized returns in the past three years and 8.91% in the last 5 years. The Aditya Birla Sun Life Medium Term Fund belongs to the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Medium Term Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,892Cr |
| 1Y Returns | 7.3% |
Fund Performance: The Nippon India Strategic Debt Fund has given 9.26% annualized returns in the past three years and -0.43% in the last 5 years. The Nippon India Strategic Debt Fund belongs to the Debt category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Strategic Debt Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹122Cr |
| 1Y Returns | 7.1% |
Fund Performance: The Tata Medium Term Fund has given 7.51% annualized returns in the past three years and 3.35% in the last 5 years. The Tata Medium Term Fund belongs to the Debt category of Tata Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Tata Medium Term Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹77Cr |
| 1Y Returns | 3.6% |
Fund Performance: The ICICI Prudential Medium Term Bond Fund has given 6.12% annualized returns in the past three years and 7.91% in the last 5 years. The ICICI Prudential Medium Term Bond Fund belongs to the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Medium Term Bond Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹6,452Cr |
| 1Y Returns | 7.2% |
Fund Performance: The Axis Strategic Bond Fund has given 6.05% annualized returns in the past three years and 7.5% in the last 5 years. The Axis Strategic Bond Fund belongs to the Debt category of Axis Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Axis Strategic Bond Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹1,924Cr |
| 1Y Returns | 7.3% |
Fund Performance: The HSBC Medium Duration Fund has given 5.65% annualized returns in the past three years and 7.17% in the last 5 years. The HSBC Medium Duration Fund belongs to the Debt category of HSBC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HSBC Medium Duration Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹689Cr |
| 1Y Returns | 7.1% |
Fund Performance: The Kotak Medium Term Fund has given 5.57% annualized returns in the past three years and 6.9% in the last 5 years. The Kotak Medium Term Fund belongs to the Debt category of Kotak Mahindra Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Kotak Medium Term Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹1,882Cr |
| 1Y Returns | 6.6% |
Fund Performance: The HDFC Medium Term Debt Fund has given 5.53% annualized returns in the past three years and 7.54% in the last 5 years. The HDFC Medium Term Debt Fund belongs to the Debt category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Medium Term Debt Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹4,236Cr |
| 1Y Returns | 7.0% |
Fund Performance: The UTI Medium Duration Fund has given 5.5% annualized returns in the past three years and 4.89% in the last 5 years. The UTI Medium Duration Fund belongs to the Debt category of UTI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in UTI Medium Duration Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹43Cr |
| 1Y Returns | 6.3% |
Fund Performance: The SBI Magnum Medium Duration Fund has given 5.31% annualized returns in the past three years and 8.07% in the last 5 years. The SBI Magnum Medium Duration Fund belongs to the Debt category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI Magnum Medium Duration Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹6,970Cr |
| 1Y Returns | 7.3% |
Fund Performance: The DSP Bond Fund has given 4.71% annualized returns in the past three years and 5.4% in the last 5 years. The DSP Bond Fund belongs to the Debt category of DSP Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in DSP Bond Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹347Cr |
| 1Y Returns | 6.7% |
Fund Performance: The Baroda BNP Paribas Medium Duration Fund has given 4.34% annualized returns in the past three years and 3.84% in the last 5 years. The Baroda BNP Paribas Medium Duration Fund belongs to the Debt category of BNP Paribas Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Baroda BNP Paribas Medium Duration Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹36Cr |
| 1Y Returns | 6.8% |
Fund Performance: The Bandhan Bond Fund has given 3.85% annualized returns in the past three years and 6.63% in the last 5 years. The Bandhan Bond Fund belongs to the Debt category of IDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Bandhan Bond Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹1,702Cr |
| 1Y Returns | 6.0% |
Fund Performance: The Union Medium Duration Fund belongs to the Debt category of Union Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Union Medium Duration Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹126Cr |
| 1Y Returns | 6.1% |
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