Bandhan Corporate Bond Fund - Direct Plan
An open ended debt scheme predominantly investing in AA+ and above rated corporate bonds. A scheme with relatively high interest rate risk and relatively low credit risk.
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What is a Corporate Bond Fund?
A corporate bond fund is like lending money to a friend’s business with the hope of getting interest payments in return. These funds invest in corporate bonds issued by companies to raise money, providing investors with regular interest income and the return of the principal amount at maturity.
A corporate bond fund is a debt fund that must invest at least 80% of its assets in corporate bonds. Companies issue these bonds to raise capital as an alternative to bank loans. With corporate debt funds, investors receive regular interest payments (coupons) and the principal amount at maturity.
Corporate bond funds invest in various debt instruments, including bonds, commercial papers, and structured obligations. The risk profile and maturity dates of these instruments vary.
Corporate bond mutual funds offer high liquidity and can be invested in or redeemed at any time, making them suitable for mid to long-term investment horizons.
While corporate bond funds are generally low risk, they are not risk-free. Risks include credit, interest rate, and market risks. Additionally, some corporate mutual funds may be called for redemption by the issuer. In such a scenario, the principal is repaid before the maturity period.
Types of Corporate Bond Funds in India
Corporate bond funds in India generally fall into two categories:
1. Funds that invest in top-rated companies with high CRISIL ratings, including public sector companies and banks.
2. Funds that invest in companies with lower credit ratings, such as AA-.
- Min Investment 1,000
- Min SIP Amount 100
- Exit LoadNil
Scheme is suitable as 'Core' debt allocation and is recommended for a minimum investment horizon of 3 years
Tier 1 Benchmark : NIFTY Corporate Bond Index A-IIAlternate Benchmark : CRISIL 10 Year Gilt Index
Tier 2 Benchmark : NIFTY AAA Short Duration Bond Index
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Performance as on 31st October 2024
| Scheme Names | CAGR Returns (%) | Current value of Investment of 10,000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 year | 3 year | 5 year | 10 year | 12/01/2016 Since inception | 1 year | 3 year | 5 year | 10 year | 12/01/2016 Since inception | |
| Bandhan Corporate Bond Fund - Regular Plan - Growth | 7.64 | 5.48 | 6.37 | N.A. | 7.03 | 10,766 | 11,741 | 13,623 | N.A. | 18,193 |
| 7.81 | 5.78 | 6.36 | 7.29 | 7.11 | 10,784 | 11,837 | 13,618 | 20,228 | 18,316 | |
| 7.75 | 5.66 | 6.47 | 7.11 | 7.20 | 10,777 | 11,801 | 13,687 | 19,883 | 18,452 | |
| 10.67 | 5.60 | 5.44 | 6.91 | 6.50 | 11,070 | 11,777 | 13,037 | 19,512 | 17,411 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Suyash Choudhary (w.e.f 28/07/2021) & Mr. Gautam Kaul (w.e.f 01/12/2021)
View fund performance of other funds managed by Mr. Suyash Choudhary, Mr. Gautam Kaul
Past performance may or may not be sustained in future.
Regular and Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
Taxation:
For taxation, please refer the link : https://bit.ly/46xQzi1
Bandhan Corporate Bond Fund
(Scheme Risk-o-meter)
NIFTY Corporate Bond Index A-II
(Tier 1 Benchmark Risk-o-meter)
NIFTY AAA Short Duration Bond Index
(Tier 2 Benchmark Risk-o-meter)
This product is suitable for investors who are seeking* :
- To generate medium to long term optimal returns.
- Investments predominantly in high quality corporate bonds.
Who Should Invest in Corporate Bonds?
Corporate bond funds, being low-risk investments, are suitable for investors with a mid- to long-term horizon seeking relatively stable returns.
Moreover, corporate bond funds are highly liquid, making them a good option for investors seeking liquidity and portfolio diversification.
FAQs on Corporate Bond Funds
What are Corporate Bond Funds?
Corporate Bond Funds are a type of a debt fund which invests 80% of its assets in high-rated bonds issued by corporations or companies. They are issued by companies to raise money for their expenses, as an alternative to banks. Corporate debt bonds work by borrowing money from the investor and repaying the principal amount at the end of the maturity period.
Who should invest in Corporate Bonds?
Corporate Bonds are characterised as a low-risk investment option. They are suitable for investors who are risk aversive and are seeking mid to long-term investment opportunities.
Is a Corporate Bond Fund tax free?
No, Corporate Bond Mutual Funds are not tax free. They are subject to short and long term capital gain tax. Corporate bonds held for less than three years are subject to short-term capital gains tax. Over three years, corporate bond mutual funds are subject to long term capital gains tax at 20% under Section 50 AA of the Indian Income Tax Act, 1961.
What are the risks of Corporate Bonds?
Corporate Bond Funds are usually a low risk investment option, however they are subject to certain risks including market risk, credit rate risk and interest rate risk. These funds can also be called for redemption by the issuer which can lead to the principal being repaid before the maturity date.
What is the maturity of a Corporate Bond?
The maturity date of Corporate Bonds can differ depending on the type of fund. There are short-term (less than three years), mid-term (four to ten years) and long-term corporate bond mutual funds(over ten years). An investor may choose a fund suited to their investment horizon and future goals.
What is the benefit of Corporate Bonds?
One of the main benefits of Corporate Bonds is their low-risk nature. They are less susceptible to market volatility, although they are subject to interest rate risk. Moreover, corporate bonds may potentially generate higher returns.
Who issues Corporate Bonds?
Corporate debt bonds are issued by corporations to meet their financial expenses. Investors get a fixed interest from the corporation and at the end of the maturity period.
How to invest in Corporate Bonds?
Investment in Corporate Bonds can be done through corporate bond mutual funds, a broker, banker or bond trader.