7 Best Corporate Bonds To Buy In 2024
“We are hoping that down the line, it will be a case of ‘My name is Bond, Indian Bond.’
Madhabi Puri Buch, the SEBI Chairperson at the CII Global Economic Policy Forum 2023, said this iconic line. It highlights the efforts of government and regulatory bodies to attract investors to the Indian corporate bond market.
Overview Of The Corporate Bond Market In India
India’s bond market plays a vital role in the economy's structure. According to the CRISIL Report, the corporate bond market registered an excellent CAGR of ~9% in the last five years1. Now anticipating even more robust growth, CRISIL expects the outstanding size of the market to more than double by 2030, crossing the INR 100-120 lakh crore mark in the next seven years.
The positive outlook makes learning about the best corporate bonds even more critical. While bonds offer fixed-income opportunities, bond funds offer diversification and professional management. As per SEBI guidelines, corporate bond funds are debt funds with 80% of investment in the highest-rated bonds2. This blog lists the best corporate bond funds to buy in 2024.
7 Best Corporate Bond Funds To Buy In 2024
1. ICICI Prudential Corporate Bond Fund
It is an open-ended debt scheme. It invests in corporate bonds that have a rating of AA+ or more.
Overview
- Annualised returns (1Y | 3Y | 5Y) (as of 20th Dec ’23): 7.69% | 5.66% | 7.59%
- Expense ratio: 0.32%
- AUM of fund: INR 24,467 Cr
- CRISIL rank: *****
- Exit load: 0%
Returns Trend For Investment Of INR 10,000
| Invested On | Year | Latest Value (INR) NAV as of 22-Dec-23 |
| 22-Dec-22 | 1st | 10772.80 |
| 22-Dec-21 | 2nd | 11285.50 |
| 22-Dec-20 | 3rd | 11800.80 |
| 21-Dec-18 | 5th | 14418.20 |
| 02-Jan-13 | Since Inception | 23714.40 |
2. Axis Corporate Debt Fund
The objective of this scheme is to provide stable income and capital appreciation.
Overview
- Annualised returns (1Y | 3Y | 5Y) (as of 20th Dec ’23): 7.39% | 5.42% | 7.07%
- Expense ratio: 0.29%
- AUM of fund: INR 4828 Cr
- CRISIL rank: *****
- Exit load: 0%
Returns Trend For Investment Of INR 10,000
| Invested On | Year | Latest Value (INR) NAV as of 22-Dec-23 |
| 22-Dec-22 | 1st | 10743.30 |
| 22-Dec-21 | 2nd | 11219.20 |
| 22-Dec-20 | 3rd | 11712.60 |
| 21-Dec-18 | 5th | 14078.50 |
| 18-July-17 | Since Inception | 15755.50 |
3. Nippon India Corporate Bond Fund
The objective is to generate income by investing in debt instruments of various maturities.
Overview
- Annualised returns (1Y | 3Y | 5Y) (as of 22nd Dec ’23): 7.48? | 5.80% | 7.10%
- Expense ratio: 0.34%
- AUM of fund: INR 2388 Cr
- CRISIL rank: ****
- Exit load: 0%
Returns Trend For Investment Of INR 10,000
| Invested On | Year | Latest Value (INR) NAV as of 22-Dec-23 |
| 22-Dec-22 | 1st | 10752.00 |
| 22-Dec-21 | 2nd | 11258.40 |
| 22-Dec-20 | 3rd | 11840.00 |
| 22-Dec-18 | 5th | 14085.00 |
| 01-Jan-13 | Since Inception | 23032.90 |
4. Franklin India Corporate Debt Fund - Plan A
Launched on 1st Jan 2013, this open-ended scheme aims to achieve regular income and capital appreciation for its investors.
Overview
- Annualised returns (1Y | 3Y | 5Y) as of 20th Dec ’23: 7.09% | 5.04% | 6.90%
- Expense ratio: 0.2%
- AUM of fund: INR 767 Cr
- CRISIL rank: ****
- Exit load: 0%
Returns Trend For Investment Of INR 10,000
| Invested On | Year | Latest Value (INR) NAV as of 22-Dec-23 |
| 22-Dec-22 | 1st | 10712.20 |
| 22-Dec-21 | 2nd | 11109.50 |
| 22-Dec-20 | 3rd | 11599.00 |
| 21-Dec-18 | 5th | 13865.30 |
| 01-Jan-13 | Since Inception | 24138.90 |
5. Aditya Birla Sun Life Corporate Bond Fund
The scheme's objective is to generate optimal returns with high liquidity. This fund was launched on 02 Jan 2013.
Overview
- Annualised returns (1Y | 3Y | 5Y) as of 20th Dec ’23: 7.40% | 5.31% | 7.51%
- Expense ratio: 0.31%
- AUM of fund: INR 17698 Cr
- CRISIL rank: ***
- Exit load: 0%
Returns Trend For Investment Of INR 10,000
| Invested On | Year | Latest Value (INR) NAV as of 22-Dec-23 |
| 22-Dec-22 | 1st | 10737.70 |
| 22-Dec-21 | 2nd | 11196.30 |
| 22-Dec-20 | 3rd | 11680.70 |
| 21-Dec-18 | 5th | 14363.90 |
| 02-Jan-13 | Since Inception | 23696.50 |
6. Kotak Corporate Bond Fund
This goal is to generate income by investing across the yield curve. It also aims to maintain reasonable liquidity.
Overview
- Annualised returns (1Y | 3Y | 5Y) as of 20th Dec ’23: 7.13% | 5.10% | 7.04%
- Expense ratio: 0.34%
- AUM of fund: INR 10653 Cr
- CRISIL rank: ***
- Exit load: 0%
Returns Trend For Investment Of INR 10,000
| Invested On | Year | Latest Value (INR) NAV as of 22-Dec-23 |
| 22-Dec-22 | 1st | 10715.40 |
| 22-Dec-21 | 2nd | 11141.40 |
| 22-Dec-20 | 3rd | 11617.00 |
| 21-Dec-18 | 5th | 14052.20 |
| 14-Jan-13 | Since Inception | 23100.60 |
7. HDFC Corporate Bond Fund
The objective of the scheme is to generate regular income. It makes investments in debt securities with maturities of less than 60 months.
Overview
- Annualised returns (1Y | 3Y | 5Y) as of 20th Dec ’23: 7.37% | 5.09% | 6.90%
- Expense ratio: 0.35%
- AUM of fund: INR 26900 Cr
- CRISIL rank: ***
- Exit load: 0%
Returns Trend For Investment Of INR 10,000
| Invested On | Year | Latest Value (INR) NAV as of 22-Dec-23 |
| 22-Dec-22 | 1st | 10742.60 |
| 22-Dec-21 | 2nd | 11118.80 |
| 22-Dec-20 | 3rd | 11615.30 |
| 21-Dec-18 | 5th | 14370.80 |
| 01-Jan-13 | Since Inception | 23421.50 |
On a side note, if you want an alternative to corporate bond funds, you can explore BondX by Grip Invest. It helps you access a pool of corporate bonds and gives fixed returns. And the best part? It is an easily accessible, non-volatile, investment-grade, listed and regulated alternative investment.
Conclusion
Corporate bond performance in the debt market is thriving and driving the Indian marketplace. Investors looking for fixed-income, high-yield investment avenues must explore the potential of corporate bonds and corporate bond funds.
You can explore listed, rated, and regulated high-yield corporate bonds (giving up to 12% YTM) on Grip Invest in the pooled bonds product called BondX.
Frequently Asked Questions
1. What is AUM?
It refers to assets under management. Simply, it is the total market value of the investments managed by the fund. High AUM can mean better liquidity and credibility. However, AUM does not have any impact on returns.
2. What is the exit load?
It is a fee charged by funds if investors want to exit the investment before the specified time. Most funds do not charge any exit fees, increasing liquidity.
3. What is an open-ended scheme?
It means that you can buy or sell units anytime. There is no maturity date.
4. What is the expense ratio?
It is an annual maintenance fee charged by the fund. The lower the expense ratio, the better it is for investors.
References:
- CRISIL Ratings <https://bit.ly/4fSU1YY>
- Securities and Exchange Board of India (SEBI) <https://bit.ly/46WHfVf>
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