Medium Duration Mutual Funds

Medium Duration Funds offer a compelling solution for investors aiming to balance risk and returns over a slightly longer horizon than low-duration debt options. As per SEBI's classification, these funds invest in debt instruments such that the Macaulay duration of the portfolio is between 3 and 4 years. This makes the best Medium Duration Funds moderately sensitive to interest rate changes, providing a sweet spot between short-term stability and medium-term growth.

These funds are generally ideal for those who are looking to stay invested for at least 3 years, benefit from the accrual and potential price appreciation, and are comfortable with moderate fluctuations in returns.
 

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List of Medium Duration Mutual Funds

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What is a Medium Duration Fund?

A medium-duration fund is a type of debt fund that typically invests in bonds and money market instruments with maturities aligned to maintain a Macaulay duration between 3 and 4 years. The goal is to optimise returns by combining interest income with moderate capital gains while keeping volatility within acceptable limits for medium-term investors.
 

Popular Medium Duration Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 2,627
  • 3Y Return
  • 15.70%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 100
  • 3Y Return
  • 8.90%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 1,942
  • 3Y Return
  • 8.88%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 1,901
  • 3Y Return
  • 8.81%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 655
  • 3Y Return
  • 8.68%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 5,701
  • 3Y Return
  • 8.64%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 6,506
  • 3Y Return
  • 8.41%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 3,871
  • 3Y Return
  • 8.41%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 315
  • 3Y Return
  • 8.22%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 169
  • 3Y Return
  • 8.08%

FAQs

Medium duration mutual funds are required to maintain a Macaulay duration between 3 and 4 years, placing them in the mid-range of interest rate sensitivity and return potential.

Yes, these funds are open-ended, which means you can redeem your investment at any time, although some may charge a small exit load if withdrawn within a few months.

Returns from Medium Duration Funds can vary based on market interest rates, credit quality of holdings, and fund manager strategy, offering a balance between income and potential capital gains.

Yes, SIPs can help you invest regularly and average out interest rate risks over time, making them suitable for building a medium-term debt portfolio with disciplined allocation.

Medium duration funds may offer better post-tax returns and higher flexibility than fixed deposits, but they also carry moderate risk, so suitability depends on your financial goals and risk tolerance.

No, Medium Duration Funds do not come with a lock-in period, offering high liquidity to investors; however, check for any applicable exit load before redeeming your units early.

These funds are moderately sensitive to interest rate movements, which means their NAV may experience short-term fluctuations, but they generally stabilise when held for the full investment horizon.

You should evaluate a fund’s performance based on historical returns, consistency across interest rate cycles, credit quality, portfolio composition, and how effectively the fund manager navigates macroeconomic changes.

Investors should ideally remain invested for at least 3 to 4 years to ride through interest rate cycles and allow the fund to deliver its intended balance of stability and growth.

Medium duration funds are suitable during periods of stable to declining interest rates or when you seek a mid-term option offering better returns than short-term funds with manageable risk.

Yes, these funds can serve as a valuable middle-ground addition to your debt portfolio, offering a mix of income and moderate growth while helping diversify across interest rate sensitivities.

Medium duration funds carry moderate risk. They are more sensitive to interest rate changes than short-term funds but less volatile than long-duration ones, making them suitable for balanced risk investors.

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