Bandhan Dynamic Bond Fund - Direct Plan
An open ended dynamic debt scheme investing across duration. A scheme with relatively high interest rate risk and relatively low credit risk.
What is a Dynamic Bond Fund?
Dynamic Bond Funds are designed to adapt to changing market conditions, offering a flexible approach to capitalising on different interest rate cycles. By actively managing the portfolio, these funds switch between short-term and long-term securities, aiming to minimise risk while maximising potential returns. If you're seeking an investment that adjusts to market shifts, a dynamic bond fund could be a smart choice.
Dynamic bond funds are debt investment schemes that actively adjust their portfolios to capitalise on market cycles. They switch between short-term and long-term securities to reduce the impact of sudden interest rate changes.
Dynamic bond funds carry a moderate level of risk. While they aim to navigate interest rate cycles, they are still exposed to macroeconomic factors like fiscal deficits and government policies. Therefore, these funds are more suited for long-term investment. Dynamic bond funds offer exposure to debt and money market instruments, providing diversification while carrying moderate risk.
Dynamic bond funds are taxed like other debt funds. Units held for less than three years are subject to Short-Term Capital Gains (STCG) tax based on the investor's income slab, while units held for over three years are taxed at 20% as Long-Term Capital Gains (LTCG), with indexation benefits.
- Min Investment 1,000
- Min SIP Amount 100
- Exit LoadNil (w.e.f. 17th October 2016)
Scheme is suitable as 'Satellite' debt allocation and is recommended for a minimum investment horizon of more than 3 years
Tier 1 Benchmark : NIFTY Composite Debt Index A-III (w.e.f. 1st April 2022)Alternate Benchmark : CRISIL 10 Year Gilt Index
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Performance as on 30th September 2024
| Scheme Names | CAGR Returns (%) | Current value of Investment of 10,000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 year | 3 year | 5 year | 10 year | 03/12/2008 Since inception | 1 year | 3 year | 5 year | 10 year | 03/12/2008 Since inception | |
| Bandhan Dynamic Bond Fund - Regular Plan - Growth | 12.08 | 5.96 | 6.71 | 8.00 | 7.83 | 11,215 | 11,897 | 13,839 | 21,612 | 32,980 |
| 8.15 | 5.52 | 6.67 | 7.82 | 7.87 | 10,817 | 11,752 | 13,817 | 21,242 | 32,963 | |
| 10.32 | 5.37 | 5.64 | 7.15 | 5.98 | 11,035 | 11,702 | 13,162 | 19,955 | 25,104 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Suyash Choudhary (w.e.f 15/10/2010)
View fund performance of other funds managed by Mr. Suyash Choudhary
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 Dynamic Bond Fund
(Scheme Risk-o-meter)
NIFTY Composite Debt Index A-III (w.e.f. 1st April 2022)
(Tier 1 Benchmark Risk-o-meter)
This product is suitable for investors who are seeking* :
- To generate long term optimal returns by active management.
- Investments in money market & debt instruments including G-Sec across duration
Who Should Invest in a Dynamic Bond Fund?
Dynamic debt funds are moderately risky and suitable for investors with a higher risk tolerance. While they aim to minimise interest rate risk through portfolio adjustments, they are still exposed to macroeconomic risks like government policies, making them less suitable for risk-averse investors.
These funds invest in money market instruments and debt securities, including G-secs, aiming for long-term returns, making them ideal for investors with a long-term horizon.
Investors looking for active management to capitalise on interest rate changes may benefit from dynamic bond funds, which adjust between short and long-term securities.
As with all debt funds, dynamic bond funds are taxed under standard debt fund taxation rules, making them unsuitable for investors seeking tax-saving options.
FAQs on Dynamic Bond Funds
What is a dynamic bond fund?
A dynamic bond fund is a type of debt fund that invests in debt and money market securities. These funds attempt to capitalise on interest rate fluctuations by switching between short-term and long-term securities.
Is there a lock-in period for dynamic bond funds?
No, Bandhan Dynamic Bond Fund does not have a lock-in period
How does a dynamic bond fund work?
Dynamic bond funds invest in debt and money market securities and try to benefit from fluctuations in interest rates. When interest rates may show signs of falling, the asset allocation may be changed to encompass long-term bonds. When interest rates may show signs of rising, the fund’s portfolio may be changed to include short-term bonds, thus potentially gaining benefits from fluctuations in the market.
Is dynamic bond fund safe?
Dynamic bond funds may potentially mitigate interest rate risk by switching securities on the basis of interest rate fluctuations. However, all mutual funds are subject to risks. Similar to other debt funds, dynamic debt funds may be subject to inflation risk and risks arising from macroeconomic factors such as government policies.
Why do bond prices fall when interest rates rise?
The value of existing bonds paying lower interest may become less attractive when interest rate rises. Consequently, their price drops when the interest rates rise.
What is the meaning of bond yield?
The meaning of a bond's yield is the returns an investor expects to receive each year till the bond has reached maturity. For an investor, bond yield is the overall return that they will receive.
What is the difference between balanced funds and dynamic bond funds?
Balanced funds invest in equity and debt instruments, whereas dynamic bond funds invest primarily in debt and money market instruments. Balanced funds have a higher risk associated with them.