Top Corporate Bond Mutual Funds for Investment in December 2024
Corporate Bond Mutual Funds are a type of mutual fund that invests in bonds issued by companies. If you are planning to invest in a safe debt scheme for your short-term goal, in that case, you may invest in corporate bond funds.
These schemes invest 80% of their funds in securities of top-rated companies. Because of this reason, this fund is significantly safer than other debt schemes like credit risk funds. This fund is also safer than long-term debt funds and gilt funds, which are more affected by changes in interest rates in the economy.
Safety and interest rates are the two major factors to invest in corporate bond funds. Safety is one of the vital factors for investors who invest in debt funds after facing continuous failure and downgrades in the debt space almost three years ago.
The other factor, the change in interest rate, is particularly important at this point. Central banks are being very cautious because inflation is still a concern. They have warned investors that it might take time before they reduce interest rates. In India, the RBI is also keeping interest rates steady and has not decided on cutting them yet.
Corporate bond funds also involve risks. The AAA rating ensures higher safety, but you need to be aware that your fund manager is not facing any extra risk for making extra returns.
Here are the top corporate bond funds to invest in December 2024:
- HDFC Corporate Bond Fund
- Aditya Birla Sun Life Corporate Bond Fund
- ICICI Prudential Corporate Bond Fund
- Sundaram Corporate Bond Fund
Investors who have an investment time horizon of 2 to 3 years can consider investing in corporate bond mutual funds for higher returns. If you are keeping your corporate bond funds for less than 36 months, in that case, you need to pay short-term capital gain tax, which will be calculated as per the investor’s income tax slab.
