Corporate Bond Mutual Funds

Corporate Bond Mutual Funds invest mainly in highly rated corporate bonds in India, aiming to offer stable returns with relatively low credit risk. These funds are often considered by investors looking for comparatively predictable income and capital preservation. A Corporate Bond Fund can be a useful option for meeting medium- to long-term financial goals, especially when seeking a balance between risk and return.

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List of Corporate Bond Mutual Funds

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Search Result - 21 Mutual Funds

Fund Name	Fund Size (Cr.)	3Y Returns	5Y Returns
AXIS Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	9,872	8.35%	6.75%	Invest
Franklin India Corporate Debt Fund-Direct Growth Debt Corporate Bond Fund	1,290	8.35%	6.58%	Invest
Nippon India Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	10,732	8.31%	6.93%	Invest
Baroda BNP Paribas Corporate Bond Fund-Dir Growth Debt Corporate Bond Fund	437	8.31%	5.89%	Invest
ICICI Pru Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	34,630	8.16%	6.72%	Invest
Kotak Corporate Bond Fund-DirGrowth Debt Corporate Bond Fund	18,909	8.10%	6.47%	Invest
Tata Corporate Bond Fund - Dir Growth Debt Corporate Bond Fund	4,240	8.09%	-	Invest
HDFC Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	36,134	8.06%	6.41%	Invest
Aditya Birla SL Corporate Bond Fund-Dir Growth Debt Corporate Bond Fund	30,131	8.02%	6.49%	Invest
PGIM India Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	88	8.02%	6.48%	Invest

Fund Name	1Y Returns	Rating	Fund Size (Cr.)
AXIS Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	8.88% Fund Size (Cr.) - 9,872 Invest
Franklin India Corporate Debt Fund-Direct Growth Debt Corporate Bond Fund	9.70% Fund Size (Cr.) - 1,290 Invest
Nippon India Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	8.57% Fund Size (Cr.) - 10,732 Invest
Baroda BNP Paribas Corporate Bond Fund-Dir Growth Debt Corporate Bond Fund	8.84% Fund Size (Cr.) - 437 Invest
ICICI Pru Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	8.43% Fund Size (Cr.) - 34,630 Invest
Kotak Corporate Bond Fund-DirGrowth Debt Corporate Bond Fund	8.47% Fund Size (Cr.) - 18,909 Invest
Tata Corporate Bond Fund - Dir Growth Debt Corporate Bond Fund	7.94% Fund Size (Cr.) - 4,240 Invest
HDFC Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	7.90% Fund Size (Cr.) - 36,134 Invest
Aditya Birla SL Corporate Bond Fund-Dir Growth Debt Corporate Bond Fund	7.87% Fund Size (Cr.) - 30,131 Invest
PGIM India Corporate Bond Fund - Direct Growth Debt Corporate Bond Fund	8.46% Fund Size (Cr.) - 88 Invest

What are Corporate Bond Mutual Funds?

A Corporate Bond Fund is a type of debt mutual fund that invests at least 80% of its assets in high-rated bonds issued by companies. These bonds carry credit ratings, with AAA being the highest, indicating strong repayment capacity. They offer higher returns compared to traditional fixed deposits while keeping credit risk relatively low.

By investing in financially sound businesses, these funds aim to provide steady income and preserve capital, making them suitable for investors with a low to moderate risk appetite.

How do Corporate Bond Mutual Funds Work?

A Corporate Bond Mutual Fund primarily invests in high-rated debt instruments issued by companies with strong creditworthiness, typically those rated AA+ and above. These funds are designed to deliver stable returns by lending to financially sound businesses that have a lower likelihood of default.

The Net Asset Value (NAV) of the fund fluctuates based on the market value of the bonds it holds, thereby reflecting the fund’s overall performance. Returns from corporate bond funds are generated through a combination of interest income and potential capital gains. Due to their focus on high-quality issuers, these funds generally carry lower credit risk compared to other types of debt mutual funds.

Features of Corporate Bond Funds

1. High-Quality Investments: A Corporate Bond Fund mainly invests in AAA-rated corporate bonds, reflecting strong creditworthiness and low default risk.
2. Security: These funds prioritise safety by focusing on top-rated issuers, making them suitable for conservative investors seeking capital preservation.
3. Dynamic Maturity Management: Fund managers adjust portfolio maturity based on interest rate expectations to optimise returns.
4. Liquidity: Investments in actively traded bonds ensure that Corporate Bond Mutual Funds offer easy redemption with minimal market impact.
5. Stable Returns: Returns are earned through regular interest payments and occasional capital gains from bond price movements.

Who Should Invest in Corporate Bond Mutual Funds?

1. Conservative Investors: Those who prioritise safety and steady income over aggressive growth.
2. For Capital Preservation Goals: Ideal for investors seeking to protect their principal while earning from high-quality debt instruments.
3. Investors Who Want to Diversify: A good choice for adding balance to an equity-heavy portfolio.
4. For Medium to Long-Term Planning: Suitable for financial goals that require a mix of predictability and low volatility.
5. For Liquidity Needs: Those who want access to their funds without facing high exit costs or lock-ins.

How to Invest in Corporate Bond Funds

Here is a quick guide to help you invest in corporate bonds easily with the 5paisa app:

1. Go to the 5paisa website and select "Open Account".
2. Provide your mobile number and click on the "Open Demat Account" button.
3. Complete the KYC by submitting your personal information.
4. Upload the necessary documents for identity and address proof.
5. Verify your details digitally and begin investing in corporate bonds in India. With 5paisa, your investment process is smooth and hassle-free.

Benefits and Risks of Investing in Corporate Bond Mutual Funds

Benefits of Corporate Bond Funds

1. Steady Income: Corporate Bond Funds aim to deliver regular income by investing in interest-paying corporate debt instruments which makes them appealing for income-focused investors.
2. Diversified Exposure: Spreading investments across various issuers helps reduce the impact of a single company’s performance on the overall fund.
3. Expert Oversight: Professional fund managers select bonds based on ratings and market trends, aiming to balance safety and returns.
4. Better Returns Than FDs: While relatively safe, these funds often yield more than traditional fixed deposits over similar timeframes.

Risks of Corporate Bond Funds

Credit Risk: There is always the possibility that a company may delay or default on repayment, which in turn may affect returns.
Interest Rate Risk: An increase in interest rates may lower the market value of existing bonds held by the fund.
Reinvestment Risk: Future interest payments may be reinvested at lower rates, which could reduce overall income.
Limited Growth Potential: Since these are debt-oriented products, they offer modest capital appreciation, sometimes seen as a disadvantage of corporate bond funds compared to equity investments.

Factors to Consider While Investing in Corporate Bond Funds

1. Credit Quality: Choose funds that invest in highly rated (AA+ or above) bonds. These indicate stronger repayment capacity, reducing credit risk and enhancing portfolio safety.
2. Interest Rate Sensitivity: Bond values move with interest rate changes. If you're planning to buy corporate bonds online, check how sensitive the fund is to rate movements, especially in changing rate environments.
3. Investment Horizon: Align your time frame with the fund’s average maturity. Corporate Bond Mutual Funds are best suited for medium- to long-term investors seeking stability and regular income.
4. Expense Ratio: A lower expense ratio helps maximise your returns, especially for debt investments where margins can be modest. Always compare costs before choosing a fund.
5. Liquidity Needs: Ensure the fund allows easy exit when required. If liquidity is a priority, pick funds with minimal exit loads and high tradability for smooth corporate bonds investment.

Tax Rules For Corporate Bond Mutual Funds

Knowing how Corporate Bond Mutual Funds are taxed can help you plan your returns better after taxes. As per the latest tax rules, gains from Corporate Bond Mutual Funds are taxed as per the investor’s income slab. This is applicable for bonds purchased after March 31, 2023.

For investments made before March 31, 2023, long-term capital gains are taxed at 12.5% if the funds are held for more than 24 months.

Popular Corporate Bond Mutual Funds

Fund Name
Min Investment Amt
AUM
3Y Returns

AXIS Corporate Bond Fund - Direct Growth

₹ 1000

₹ 9,8720

8.35%

Min SIP Investment Amt

₹ ₹ 1000

AUM (Cr.)

₹ 9,872

3Y Return

8.35%

Franklin India Corporate Debt Fund-Direct Growth

₹ 500

₹ 1,2900

8.35%

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 1,290

3Y Return

8.35%

Nippon India Corporate Bond Fund - Direct Growth

₹ 100

₹ 10,7320

8.31%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 10,732

3Y Return

8.31%

Baroda BNP Paribas Corporate Bond Fund-Dir Growth

₹ 500

₹ 4370

8.31%

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 437

3Y Return

8.31%

ICICI Pru Corporate Bond Fund - Direct Growth

₹ 100

₹ 34,6300

8.16%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 34,630

3Y Return

8.16%

Kotak Corporate Bond Fund-DirGrowth

₹ 100

₹ 18,9090

8.10%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 18,909

3Y Return

8.10%

Tata Corporate Bond Fund - Dir Growth

₹ 150

₹ 4,2400

8.09%

Min SIP Investment Amt

₹ ₹ 150

AUM (Cr.)

₹ 4,240

3Y Return

8.09%

HDFC Corporate Bond Fund - Direct Growth

₹ 100

₹ 36,1340

8.06%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 36,134

3Y Return

8.06%

Aditya Birla SL Corporate Bond Fund-Dir Growth

₹ 100

₹ 30,1310

8.02%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 30,131

3Y Return

8.02%

PGIM India Corporate Bond Fund - Direct Growth

₹ 1000

₹ 880

8.02%

Min SIP Investment Amt

₹ ₹ 1000

AUM (Cr.)

₹ 88

3Y Return

8.02%

FAQs

Corporate Bond Mutual Funds

Kickstart your SIP journey with just ₹100!

List of Corporate Bond Mutual Funds

Category

Sub Category

Rating

What are Corporate Bond Mutual Funds?

How do Corporate Bond Mutual Funds Work?

Features of Corporate Bond Funds

Who Should Invest in Corporate Bond Mutual Funds?

How to Invest in Corporate Bond Funds

Benefits and Risks of Investing in Corporate Bond Mutual Funds

Benefits of Corporate Bond Funds

Risks of Corporate Bond Funds

Factors to Consider While Investing in Corporate Bond Funds

Tax Rules For Corporate Bond Mutual Funds

Popular Corporate Bond Mutual Funds

AXIS Corporate Bond Fund - Direct Growth

₹ 1000

₹ 9,8720

8.35%

Min SIP Investment Amt

₹ ₹ 1000

AUM (Cr.)

₹ 9,872

3Y Return

8.35%

Franklin India Corporate Debt Fund-Direct Growth

₹ 500

₹ 1,2900

8.35%

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 1,290

3Y Return

8.35%

Nippon India Corporate Bond Fund - Direct Growth

₹ 100

₹ 10,7320

8.31%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 10,732

3Y Return

8.31%

Baroda BNP Paribas Corporate Bond Fund-Dir Growth

₹ 500

₹ 4370

8.31%

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 437

3Y Return

8.31%

ICICI Pru Corporate Bond Fund - Direct Growth

₹ 100

₹ 34,6300

8.16%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 34,630

3Y Return

8.16%

Kotak Corporate Bond Fund-DirGrowth

₹ 100

₹ 18,9090

8.10%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 18,909

3Y Return

8.10%

Tata Corporate Bond Fund - Dir Growth

₹ 150

₹ 4,2400

8.09%

Min SIP Investment Amt

₹ ₹ 150

AUM (Cr.)

₹ 4,240

3Y Return

8.09%

HDFC Corporate Bond Fund - Direct Growth

₹ 100

₹ 36,1340

8.06%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 36,134

3Y Return

8.06%

Aditya Birla SL Corporate Bond Fund-Dir Growth

₹ 100

₹ 30,1310

8.02%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 30,131

3Y Return

8.02%

PGIM India Corporate Bond Fund - Direct Growth

₹ 1000

₹ 880

8.02%

Min SIP Investment Amt

₹ ₹ 1000

AUM (Cr.)

₹ 88

3Y Return

8.02%

Other Calculators

FAQs

How are Corporate Bond Mutual Funds Taxed?

What is the Lock-in Period of Corporate Bond Mutual Funds?

What is the Risk Rating of Corporate Bond Mutual Funds?

What is the difference between corporate bond funds and individual corporate bonds?

How do corporate bond funds compare to equity funds in terms of risk and return?

Can I lose money in a corporate bond fund?

Are Corporate Bonds Profitable?

What is the investment tenure of a corporate bond?

Open Free Demat Account

Corporate Bond Mutual Funds

Kickstart your SIP journey with just ₹100!

List of Corporate Bond Mutual Funds

Category

Sub Category

Rating

What are Corporate Bond Mutual Funds?

How do Corporate Bond Mutual Funds Work?

Features of Corporate Bond Funds

Who Should Invest in Corporate Bond Mutual Funds?

How to Invest in Corporate Bond Funds

Benefits and Risks of Investing in Corporate Bond Mutual Funds

Benefits of Corporate Bond Funds

Risks of Corporate Bond Funds

Factors to Consider While Investing in Corporate Bond Funds

Tax Rules For Corporate Bond Mutual Funds

Popular Corporate Bond Mutual Funds

AXIS Corporate Bond Fund - Direct Growth ₹ 1000 ₹ 9,8720 8.35% Min SIP Investment Amt ₹ ₹ 1000 AUM (Cr.) ₹ 9,872 3Y Return 8.35%

Franklin India Corporate Debt Fund-Direct Growth ₹ 500 ₹ 1,2900 8.35% Min SIP Investment Amt ₹ ₹ 500 AUM (Cr.) ₹ 1,290 3Y Return 8.35%

Nippon India Corporate Bond Fund - Direct Growth ₹ 100 ₹ 10,7320 8.31% Min SIP Investment Amt ₹ ₹ 100 AUM (Cr.) ₹ 10,732 3Y Return 8.31%

Baroda BNP Paribas Corporate Bond Fund-Dir Growth ₹ 500 ₹ 4370 8.31% Min SIP Investment Amt ₹ ₹ 500 AUM (Cr.) ₹ 437 3Y Return 8.31%

ICICI Pru Corporate Bond Fund - Direct Growth ₹ 100 ₹ 34,6300 8.16% Min SIP Investment Amt ₹ ₹ 100 AUM (Cr.) ₹ 34,630 3Y Return 8.16%

Kotak Corporate Bond Fund-DirGrowth ₹ 100 ₹ 18,9090 8.10% Min SIP Investment Amt ₹ ₹ 100 AUM (Cr.) ₹ 18,909 3Y Return 8.10%

Tata Corporate Bond Fund - Dir Growth ₹ 150 ₹ 4,2400 8.09% Min SIP Investment Amt ₹ ₹ 150 AUM (Cr.) ₹ 4,240 3Y Return 8.09%

HDFC Corporate Bond Fund - Direct Growth ₹ 100 ₹ 36,1340 8.06% Min SIP Investment Amt ₹ ₹ 100 AUM (Cr.) ₹ 36,134 3Y Return 8.06%

Aditya Birla SL Corporate Bond Fund-Dir Growth ₹ 100 ₹ 30,1310 8.02% Min SIP Investment Amt ₹ ₹ 100 AUM (Cr.) ₹ 30,131 3Y Return 8.02%

PGIM India Corporate Bond Fund - Direct Growth ₹ 1000 ₹ 880 8.02% Min SIP Investment Amt ₹ ₹ 1000 AUM (Cr.) ₹ 88 3Y Return 8.02%

Other Calculators

FAQs

Open Free Demat Account

AXIS Corporate Bond Fund - Direct Growth

₹ 1000

₹ 9,8720

8.35%

Min SIP Investment Amt

₹ ₹ 1000

AUM (Cr.)

₹ 9,872

3Y Return

8.35%

Franklin India Corporate Debt Fund-Direct Growth

₹ 500

₹ 1,2900

8.35%

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 1,290

3Y Return

8.35%

Nippon India Corporate Bond Fund - Direct Growth

₹ 100

₹ 10,7320

8.31%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 10,732

3Y Return

8.31%

Baroda BNP Paribas Corporate Bond Fund-Dir Growth

₹ 500

₹ 4370

8.31%

Min SIP Investment Amt

₹ ₹ 500

AUM (Cr.)

₹ 437

3Y Return

8.31%

ICICI Pru Corporate Bond Fund - Direct Growth

₹ 100

₹ 34,6300

8.16%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 34,630

3Y Return

8.16%

Kotak Corporate Bond Fund-DirGrowth

₹ 100

₹ 18,9090

8.10%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 18,909

3Y Return

8.10%

Tata Corporate Bond Fund - Dir Growth

₹ 150

₹ 4,2400

8.09%

Min SIP Investment Amt

₹ ₹ 150

AUM (Cr.)

₹ 4,240

3Y Return

8.09%

HDFC Corporate Bond Fund - Direct Growth

₹ 100

₹ 36,1340

8.06%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 36,134

3Y Return

8.06%

Aditya Birla SL Corporate Bond Fund-Dir Growth

₹ 100

₹ 30,1310

8.02%

Min SIP Investment Amt

₹ ₹ 100

AUM (Cr.)

₹ 30,131

3Y Return

8.02%

PGIM India Corporate Bond Fund - Direct Growth

₹ 1000

₹ 880

8.02%

Min SIP Investment Amt

₹ ₹ 1000

AUM (Cr.)

₹ 88

3Y Return

8.02%