Bandhan Bond Fund Income Plan - Direct Plan
Bandhan Bond Fund Income Plan - Direct Plan
An open ended medium term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 4 years and 7 years. A scheme with relatively high interest rate risk and relatively low credit risk.
What is a Bond Income Fund?
A bond fund is a mutual fund scheme that invests in bonds. These bonds may include government bonds, municipal bonds, corporate bonds, convertible bonds etc. Bandhan Bond Fund Income Plan is a medium to long-term bond fund that invests in instruments with a Macaulay duration between 4 to 7 years. These instruments have a relatively high-interest rate risk and relatively low credit risk and focus on potentially generating income for investors rather than wealth creation.
Bandhan Bond Fund Income Plan is associated with a moderate level of risk as it primarily invests in debt and money market instruments. These securities may include:
● Securities issued, created or supported by the Government: Coupon-bearing bonds, zero coupon bonds, treasury bills etc.
● Debt instruments issued by companies owned or controlled by the government.
● Debt securities issued by banks, companies, financial institutions and other bodies bonds, debentures, notes, strips etc.
● Certificates of Deposit (CDs), Commercial Papers (CPs), Bills and other Money Market Instruments.
These securities must have a maturity period of 4 to 7 years. Consequently, this bond income fund can be categorised as a medium to long-term bond fund.
Bond income funds are fundamentally a debt scheme and may not diversify their holdings across asset classes. This may increase the level of risk in the fund and potentially impact returns. As Bandhan Bond Fund Income Plan invests in instruments with a relatively high interest rate risk, this fund may be impacted by fluctuating interest rates. Bond income funds may also be vulnerable to re-investment risk, spread risk, default risk and liquidity risk. Debt income funds may also be affected by market risks which may be a result of government policies, global socio-political climate etc.
Bond funds are a type of debt scheme and are taxed accordingly. Units held for more than three years are subject to LTCG tax at 20% with indexation benefits. Units of debt bond funds redeemed before three years are taxed under STCG. Returns earned are added to the investor's income and taxed according to their income tax slab.
- Min Investment 1,000
- Min SIP Amount 100
- Exit LoadIf redeemed/switched out within 365 days from the date of allotment: For 10% ofinvestment : Nil, For remaining investment : 1%If redeemed/switched out after 365 days from thedate of allotment: Nil
Scheme is suitable as 'Satellite' debt allocation and is recommended for a minimum investment horizon of more than 3 years
Tier 1 Benchmark : NIFTY Medium to Long Duration Debt Index A- III (w.e.f. 1st April 2022)Alternate Benchmark : CRISIL 10 Year Gilt Index
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Performance as on 28th March 2024
| Scheme Names | CAGR Returns (%) | Current value of Investment of 10,000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 year | 3 year | 5 year | 10 year | 14/07/2000 Since inception | 1 year | 3 year | 5 year | 10 year | 14/07/2000 Since inception | |
| Bandhan Bond Fund - Income Plan - Regular Plan - Growth | 7.07 | 4.12 | 6.03 | 7.31 | 7.82 | 10,709 | 11,291 | 13,408 | 20,255 | 59,662 |
| 8.18 | 5.29 | 7.31 | 7.96 | N.A. | 10,814 | 11,670 | 14,236 | 21,501 | 22,425 | |
| 8.57 | 4.22 | 6.11 | 7.09 | N.A. | 10,859 | 11,320 | 13,458 | 19,852 | N.A. | |
| ^ 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/3spfzbo
Bandhan Bond Fund Income Plan
(Scheme Risk-o-meter)
NIFTY Medium to Long Duration 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 optimal returns over long term.
- Investments in Debt & Money Market securities such that the Macaulay duration of the portfolio is between 4 years and 7 years
Who Should Invest in Bandhan Bond Fund Income Plan?
Bandhan Bond Fund Income Plan invests in bonds with a maturity period of 4 to 7 years. This is a medium to long-term bond fund, suitable for investors with a medium to long-term investment horizon. The longer maturity period of the securities may potentially help investors achieve their long-term goals.
Investors with a low-risk tolerance or investors seeking high-risk, high-return investments may not be suitable for this scheme. Bandhan Bond Fund Income Plan is categorised as a moderately risky investment option and may be suitable for investors seeking to potentially generate optimal returns in the long run.
This debt income fund may be suitable for investors seeking investments in bonds, debt and money market instruments. This scheme may not be suitable for investors seeking to diversify their holdings across various asset classes.
Investors seeking a tax-saving investment scheme may not benefit by investing in Bandhan Bond Fund Income Plan. STCG tax is levied according to the investor's income tax slab and LTCG tax is levied at 20% with indexation benefits.
FAQs on Bond Funds Income Plan
What are Income Funds in India?
Income Funds in India invest in bonds, debt and money market securities. They aim to potentially generate income for the investor rather than creating wealth.
Is Bandhan Bond Fund Income Plan risky?
Bandhan Bond Fund Income Plan is categorised as a moderately risky investment option as it invests in securities with high-interest rate risk. Moreover, this fund does not diversify its holdings across asset classes and primarily invests in debt.
Are Bond Funds suitable for achieving long-term goals?
Bond Funds invest in securities with various maturity periods. Based on the investment strategy and plan, bond funds may be a suitable option for a medium to long-term investment. Bandhan Bond Fund Income Plan is a medium to long-term bond fund that invests in securities with a maturity period between 4-7 years and may potentially be suitable for achieving long-term goals.
What do Bond Funds in India invest in?
Bond Funds in India invest in government, corporate, municipal and convertible bonds. They may also invest in other debt and money market securities.
What are the disadvantages of Bond Income Funds?
Income Funds aim to potentially generate income for the investor and do not necessarily aid wealth creation. Moreover, bond funds may be a moderately risky investment and can be vulnerable to interest rate risk, liquidity risk and other market risks.
Is an Income Fund’s NAV history important to consider before investing?
Analysing the historical performance of a fund is important. However, historical performance does not guarantee future performance and investors must read all scheme-related documents carefully before investing.