Corporate bond funds have offered an average return of around 6.73% in 2023, an analysis by ETMutualFunds showed. There were around 20 schemes in the corporate bond category. Top four schemes in the category offered over 7%.
ICICI Prudential Corporate Bond Fund, the topper in the category, offered 7.60% in 2023. Aditya Birla Sun Life Corporate Bond Fund offered 7.29%. HDFC Corporate Bond Fund gave 7.20%. Nippon India Corporate Bond Fund gave 7.15%.
The category had investments of around 60.99% in AAA papers and 34.15% in sovereign rated papers. The category had around 3.59% in cash and cash equivalents. Around 0.15% was invested in AA rated papers. The corporate bond category had invested around 0.99% in A1 rated papers. Around 0.14% was invested in unrated papers that included alternative investment fund.
The corporate bond category had an allocation of around 44.71% in papers that had maturity between one to three years. The category had an allocation of 20.91% in papers that had maturity above five years. Around 20.89% was invested in papers with maturity between three to five years. Around 9.43% was invested in papers that had a maturity of 12 months. Around 4.06% was invested in papers that did not had maturity.
According to the Amfi data, the corporate bond category in 2023 witnessed a total inflow of Rs 15,486.14 crore.
The asset under management of the corporate bond category as on November 30, 2023 stands at Rs 1.39 lakh crore. The asset under management of the corporate bond category has surged by 22.51% in 2023, from Rs 1.13 lakh crore in January to Rs 1.39 lakh crore in November.
Note, the above exercise is not a recommendation. The exercise was to capture the performance of the category in 2023. One should not make investment or redemption decisions based on the above exercise.
If you are looking for recommendations, see:
Best corporate bond mutual funds to invest in 2023
Corporate bond schemes are mandated to invest at least 80% of their corpus in the highest-rated companies. This makes them relatively safer than other debt schemes such as credit risk funds. They are also safer than gilt funds and long term debt funds that are highly sensitive to interest rate changes in the economy.
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| Scheme Name | Plan | 1Y |
|---|
| HDFC Corporate Bond Fund - Direct Plan - Growth | Direct Plan | 7.52% |
| HSBC Corporate Bond Fund - Direct Plan - Growth | Direct Plan | 6.34% |
| Tata Corporate Bond Fund - Direct Plan - Growth | Direct Plan | 7.31% |
| SBI Corporate Bond Fund - Direct Plan - Growth | Direct Plan | 7.00% |
19 more rowsOur picks at a glance
| Fund | Yield | Net expense ratio |
|---|
| American Century High Income Fund Investor Class (AHIVX) | 6.9% | 0.78% |
| Fidelity Capital & Income Fund (fa*gIX) | 6.1% | 0.93% |
| BrandywineGLOBAL – High Yield Fund Class A (BGHAX) | 6.8% | 0.92% |
| Principal High Yield Fund Class A (CPHYX) | 7.1% | 0.94% |
5 more rowsMay 20, 2024
Corporate Bond Fund : The fund has 94.49% investment in Debt, of which 26% in Government securities, 68.5% is in Low Risk securities. Suitable For : Investors who want to invest money for longer duration but prefer less riskier assets compared to equity funds.
What are corporate bonds paying now? ›
Moody's Seasoned Aaa Corporate Bond Yield is at 5.32%, compared to 5.24% the previous market day and 4.77% last year. This is lower than the long term average of 6.46%. The Moody's Seasoned Aaa Corporate Bond Yield measures the yield on corporate bonds that are rated Aaa.
What is the best corporate bond to invest in? ›
Here are the best Corporate Bond funds
- SPDR® Portfolio Corporate Bond ETF.
- iShares Broad USD Invm Grd Corp Bd ETF.
- SPDR® Portfolio Interm Term Corp Bd ETF.
- iShares 5-10 Year invmt Grd Corp Bd ETF.
- Goldman Sachs Acss Invmt Grd Corp Bd ETF.
- iShares ESG USD Corporate Bond ETF.
- iShares iBoxx $ Invmt Grade Corp Bd ETF.
Basic Info. US Corporate AAA Effective Yield is at 5.05%, compared to 5.05% the previous market day and 4.68% last year.
What is the best bond to buy in 2024? ›
17 Best Bond Funds for Rebalancing in 2024
- iShares Core US Aggregate Bond ETF AGG.
- JPMorgan Core Bond JCBUX.
- JPMorgan Mortgage-Backed Securities JMBUX.
- Loomis Sayles Core Plus Bond NEFRX.
- PGIM Total Return Bond PTRQX.
- Vanguard Total Bond Market ETF BND.
- Vanguard Total Bond Market Index VBTIX.
Here are the best High Yield Bond funds
- iShares BB Rated Corporate Bond ETF.
- Xtrackers Low Beta High Yield Bond ETF.
- Xtrackers Short Duration High Yld Bd ETF.
- JPMorgan BetaBuilders $ HY Corp Bnd ETF.
- iShares Broad USD High Yield Corp Bd ETF.
- Xtrackers USD High Yield Corp Bd ETF.
- SPDR® Portfolio High Yield Bond ETF.
Corporate bonds
These debt securities allow companies to raise capital when they need it while providing a return to investors. Investments in corporate bonds carry more risk than Treasury bonds since they aren't backed by the U.S. government. Your return is dependent on the ability of the company to pay its debts.
What is the difference between corporate bonds and corporate bond funds? ›
Unlike individual bonds, which usually make semiannual interest payments, bond funds usually make monthly distributions that can be paid directly to the investor or reinvested into the fund to compound returns.
Similar to government bonds, corporate bonds are exposed to interest rate risk. In addition, corporate bonds also have credit or default risk - the risk that the borrower fails to repay the loan and defaults on its obligation. The level of default risk varies based on the underlying credit quality of the issuer.
What is the largest corporate bond mutual fund? ›
The largest active bond fund, the $131.6 billion Pimco Income PIMIX, gained 5.9% in the fourth quarter and 9.3% over the year—its best performance since 2012 and well above the 8.1% return on the average multisector bond fund.
Which bond gives the highest return? ›
Invest in safer portfolio without compromising returns.
| Bond name | Rating |
|---|
| 9.73% BANK OF BARODA INE028A08059 Unsecured | CRISIL AAA |
| 12.50% GUJARAT NRE co*kE LIMITED INE110D07093 Secured | CARE Suspended |
| 9.55% TATA MOTORS FINANCE LIMITED INE601U08192 Unsecured | ICRA A+ |
| 9.48% PNB HOUSING FINANCE LTD INE572E09239 Secured | CRISIL AA |
16 more rowsBond prices can fluctuate for a number of reasons, including: A decline in the issuer's rating: If a ratings firm downgrades a company, its bonds may decline in value.
Are corporate bonds better than fixed deposit? ›
Bonds typically offer higher returns, albeit with accompanying risks such as credit or interest rate risk, which vary depending on the specific bonds chosen. Fixed deposits guarantee fixed returns, but the interest earned is taxable based on your tax slab.
Which bond has highest rate of return? ›
High Yield Bonds
| Bond Name | Coupon | Rating |
|---|
| SATYA MICROCAPITAL LIMITED | 13.8500 | CRISIL BBB+ |
| EARLYSALARY SERVICES PRIVATE LIMITED | 11.7500 | CARE BBB+ |
| SPANDANA SPHOORTY FINANCIAL LIMITED | 10.7500 | Ind-Ra A |
| JANA SMALL FINANCE BANK LIMITED | 13.8000 | ICRA A- |
5 more rowsInvestment-grade refers to bonds rated Baa3/BBB- or better. High-yield (also referred to as "non-investment-grade" or "junk" bonds) pertains to bonds rated Ba1/BB+ and lower.
What is the average return of a corporate bond? ›
Features of Corporate Bond Mutual Funds. These funds ensure significantly higher returns than other debt instruments in the market. Average yields of 8-10% can be expected from corporate debt instruments, while government-held bonds only provide approximately half of it.
