Bandhan Floating Rate Fund - Direct Plan
Bandhan Floating Rate Fund - Direct Plan
An Open-ended Debt Scheme predominantly investing in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/derivatives). A scheme with moderate interest rate risk and moderate credit risk.
What is the Meaning of a Floating Rate Fund?
A floating rate fund is a debt instrument that invests in financial instruments that pay a variable or floating interest rate. These funds are mandated to invest 65% of total assets in floating rate instruments. Each of these instruments follow specific benchmarks and the yield of floating rate instruments changes with a change in benchmark rates.
Floater rate funds are relatively less sensitive to changes in interest rates. The lack of sensitivity to interest rates makes floating rate funds a low to moderately risky investment option. However, the fluctuating market rate may have an impact on potential returns generated through floating rate funds. Floating rate funds are vulnerable to risks such as interest rate risk and credit risk.
Floating rate mutual funds are subject to long or short-term capital gains tax. For units held for less than 3 years, STCG is applicable on the basis of the investor’s income tax slab. LTCG is levied at 20% for units held for more than 3 years.
Floating rate funds enable investors to diversify their fixed-income investments. Investors may potentially acquire a diversified portfolio of floating rate instruments with low risk.
- Min Investment 1,000
- Min SIP Amount 100
- Exit Load
Nil
Allocation to Satellite bucket with a minimum investment horizon of 6 months
Tier 1 Benchmark : NIFTY Short Duration Debt Index A-IIAlternate Benchmark : CRISIL 10 Year Gilt Index
- Performance
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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 | 18/02/2021 Since inception | 1 year | 3 year | 5 year | 10 year | 18/02/2021 Since inception | |
| Bandhan Floating Rate Fund - Regular Plan - Growth | 7.02 | 5.03 | N.A. | N.A. | 4.94 | 10,704 | 11,590 | N.A. | N.A. | 11,616 |
| 7.44 | 5.26 | N.A. | N.A. | 5.26 | 10,740 | 11,658 | 13,629 | 11,728 | ||
| 8.57 | 4.22 | 6.11 | 7.09 | 4.27 | 10,859 | 11,320 | 13,458 | 19,852 | 11,388 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Brijesh Shah (w.e.f 14/03/2024) & Mr. Debraj Lahiri (w.e.f 14/03/2024)
View fund performance of other funds managed by Mr. Brijesh Shah, Mr. Debraj Lahiri
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 Floating Rate Fund
(Scheme Risk-o-meter)
NIFTY Short Duration Debt Index A-II
(Tier 1 Benchmark Risk-o-meter)
This product is suitable for investors who are seeking* :
- To generate short-term optimal returns.
- To invest predominantly in floating rate instruments
Who Should Invest in Floating Rate Mutual Funds?
Floating rate mutual funds invest in floating rate instruments. They are categorised as a low to moderate risk investment option. Floater rate funds are suitable for a short investment horizon, and they may be suitable for investors with a low-risk appetite looking to potentially generate short-term reasonable returns. Nevertheless, they may also be subject to credit risk and interest rate risk.
Floating rate funds may be suitable for investors with a conservative investment strategy seeking flexibility via an open-ended fund. Floater mutual debt funds are a suitable option for diversification of fixed-income assets.
FAQs on Floating Rate Funds
What are floater funds?
The meaning of floater funds is that it is an open-ended scheme that invests at least 65% of their total assets in floating rate instruments. These may include debt or money market instruments.
What is the benefit of floating rate funds?
Floating rate funds are less sensitive to changes in interest rates and are a liquid investment option. Floating rate funds may be suitable for investors seeking to liquidate their investments. Floating mutual funds may also help investors diversify their portfolios.
How do floating rates work?
Floating rates in India are determined every quarter. The rate of interest is subject to revision by the RBI on the basis of various factors.
What is meant by a floating interest rate?
A floating interest rate changes according to market conditions. Contrarily, fixed interest rates remain the same for the entire tenure of the investment or loan. Investors may potentially benefit by investing in floating rate funds when interest rates are moving up.
What are the disadvantages of floating rate mutual funds?
Floating rate funds may be unpredictable. The floating rate may increase the monthly payments and make budgeting cash flow difficult.
Are floater funds risky?
Floating rate debt funds are categorised as a low to moderate risk investment option. However, as they invest in debt instruments, these funds may be subject to some risk including interest rate risk or credit risk.
What are floater funds linked to?
The corpus of floating rate mutual funds is invested in floating rate instruments. Floater funds are linked to benchmark indices from the market. A change in the benchmark may potentially cause a change in the yield from floating rate funds.