Floater Mutual Funds
Floater Mutual Funds invest primarily in floating-rate debt instruments like corporate bonds, government securities, and PSU paper, whose interest rates adjust with changing benchmarks (e.g., RBI repo rate or MIBOR). Because the interest payout fluctuates with prevailing rates, these funds offer better protection against rate hikes compared to fixed-rate debt schemes.
They are a good choice for investors seeking liquidity and resilience during uncertain economic cycles. Frequent repricing of securities helps maintain yield even in tightening environments. For a convenient way to get exposure to floating-rate bonds and manage interest-rate risks without picking individual papers yourself, floater funds are an excellent option to look at.
List of Floater Mutual Funds
| Fund Name | Fund Size (Cr.) | 3Y Returns | 5Y Returns |
|---|
| Fund Name | 1Y Returns | Rating | Fund Size (Cr.) |
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How Do Floater Funds Work?
Floater Mutual Funds are a category of debt funds that allocate a significant portion—typically around 65%—of their assets to floating-rate debt instruments. These instruments, which often include corporate bonds and other non-government securities, have interest rates that adjust periodically in line with market benchmarks such as the RBI's repo rate or the MIBOR (Mumbai Interbank Offered Rate).
The functioning of these funds is closely tied to movements in interest rates. When the Reserve Bank of India hikes the repo rate, the yields on floating-rate instruments rise correspondingly, boosting the fund’s income potential. On the other hand, a decline in the repo rate leads to lower interest payouts, though the impact is usually less severe compared to fixed-rate bond funds. This direct correlation makes floater funds especially attractive during periods when interest rates are expected to rise. Fund managers actively curate a portfolio with varying maturities and credit profiles to optimise returns while keeping risk in check.
Popular Floater Mutual Funds
- Franklin India Floating Rate Fund - Direct Growth
- ₹ 500
- ₹ 3050
- 8.47%
- Min SIP Investment Amt
- ₹ 500
- AUM (Cr.)
- ₹ 305
- 3Y Return
- 8.47%
- Min SIP Investment Amt
- ₹ 500
- AUM (Cr.)
- ₹ 305
- 3Y Return
- 8.47%
- ICICI Pru Floating Interest Fund-Direct Growth
- ₹ 100
- ₹ 7,2820
- 8.43%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 7,282
- 3Y Return
- 8.43%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 7,282
- 3Y Return
- 8.43%
- DSP Floater Fund - Direct Growth
- ₹ 100
- ₹ 4490
- 8.36%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 449
- 3Y Return
- 8.36%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 449
- 3Y Return
- 8.36%
- Kotak Floating Rate Fund - Direct Growth
- ₹ 100
- ₹ 3,3680
- 8.24%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 3,368
- 3Y Return
- 8.24%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 3,368
- 3Y Return
- 8.24%
- AXIS Floater Fund - Direct Growth
- ₹ 1000
- ₹ 1510
- 8.10%
- Min SIP Investment Amt
- ₹ 1000
- AUM (Cr.)
- ₹ 151
- 3Y Return
- 8.10%
- Min SIP Investment Amt
- ₹ 1000
- AUM (Cr.)
- ₹ 151
- 3Y Return
- 8.10%
- HDFC Floating Rate Debt Fund - Direct Growth
- ₹ 100
- ₹ 16,2240
- 8.09%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 16,224
- 3Y Return
- 8.09%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 16,224
- 3Y Return
- 8.09%
- Nippon India Floater Fund - Direct Growth
- ₹ 100
- ₹ 8,2020
- 7.95%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 8,202
- 3Y Return
- 7.95%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 8,202
- 3Y Return
- 7.95%
- Bandhan Floater Fund - Direct Growth
- ₹ 100
- ₹ 2980
- 7.86%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 298
- 3Y Return
- 7.86%
- Min SIP Investment Amt
- ₹ 100
- AUM (Cr.)
- ₹ 298
- 3Y Return
- 7.86%
- Aditya Birla SL Floating Rate Fund-Direct Growth
- ₹ 1000
- ₹ 13,4160
- 7.83%
- Min SIP Investment Amt
- ₹ 1000
- AUM (Cr.)
- ₹ 13,416
- 3Y Return
- 7.83%
- Min SIP Investment Amt
- ₹ 1000
- AUM (Cr.)
- ₹ 13,416
- 3Y Return
- 7.83%
- Tata Floating Rate Fund-Direct Growth
- ₹ 150
- ₹ 1360
- 7.83%
- Min SIP Investment Amt
- ₹ 150
- AUM (Cr.)
- ₹ 136
- 3Y Return
- 7.83%
- Min SIP Investment Amt
- ₹ 150
- AUM (Cr.)
- ₹ 136
- 3Y Return
- 7.83%