Bandhan Corporate Bond Fund - Direct Plan
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.
What is a Corporate Bond Fund?
A corporate bond fund is a type of debt fund which is required to invest minimum 80% of its assets in corporate bonds. Corporate funds are issued by companies to raise money for their expenses as an alternative to bank loans. When an investor invests in a corporate debt fund, they are lending money to the corporation. The investor receives an interest known as a coupon. The principal amount will be repaid at the end of the maturity period.
Corporate bond funds are fundamentally debt funds, as they invest in debt papers. Debt papers are issued by companies which include bonds, commercial papers and structured obligations. The risk profile and maturity date may differ depending on the debt paper.
Corporate bond mutual funds are characterised by high liquidity. They are used by businesses to meet their financial needs, and are consequently a mid to long-term investment option. They have no lock-in period and can be invested in or redeemed by the investor whenever required.
Although corporate bond funds are largely characterised as a low-risk investment option, they are not risk-free. Certain risks related to corporate bond funds may include credit rate risk, interest rate risk and market risk. Some corporate mutual funds may be called for redemption by the issuer. In such a scenario, the principal is repaid prior to the maturity period.
Types of Corporate Bond Funds in India
Corp bond funds can broadly be divided into two categories:
1. One type of corporate bond funds invest in top-rated companies with high CRISIL ratings. These may include public sector companies, banks and units
2. The second type of corporate bond funds invest in companies with a relatively lower credit rating of 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 28th March 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 | 7.10 | 4.98 | 6.45 | N.A. | 6.95 | 10,712 | 11,575 | 13,670 | N.A. | 17,368 |
| 7.39 | 5.19 | 6.65 | 7.47 | 7.06 | 10,735 | 11,637 | 13,802 | 20,550 | 17,515 | |
| 7.32 | 5.13 | 6.81 | 7.31 | 7.16 | 10,728 | 11,615 | 13,905 | 20,257 | 17,647 | |
| 8.57 | 4.22 | 6.11 | 7.09 | 6.30 | 10,859 | 11,320 | 13,458 | 19,852 | 16,518 | |
| ^ 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/3spfzbo
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?
As corporate bond funds invest in debt securities, they are categorised as a low-risk investment option. They may be suitable for investors with a mid to long-term investment horizon, and who may be looking to earn reasonable returns.
Moreover, corporate bond funds are a liquid investment, and are suitable for investors seeking liquidity. They are suitable for investors looking to diversify their portfolio to include liquid investments.
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.