Top 10 Debt Mutual Funds That Delivered Highest Return In 2021 On Lump Sum Investment, Details Inside

Mutual funds that invest in a variety of debt-related products such as treasury bills, corporate bonds, government securities, non-convertible debentures, state development loans, certificate of deposit, and commercial paper are Debt Mutual Fund. These funds' yield-to-maturity is influenced by the yield of the underlying securities, which in turn depends on the maturity and credit quality of those securities.

Earning a consistent interest income and capital growth is the main goal of investing in debt funds. The issuers of debt instruments determine the interest rate and duration of the debt instruments. They are also referred to as "fixed-income" securities as a result.

Debt Mutual Funds

The Indian mutual fund market provides access to a wide range of debt funds that meet the various risk-return profiles and investor needs. As a result, when choosing funds, one should take their risk appetite into account as well as their investment horizon and acceptable level of risk.

Here in this article, we have listed the top 10 Debt Mutual Funds that have delivered the highest return on Lump-Sum Investment in 2021. Check out the fund's risk level, fund category and stars given to the fund by Value Research, an investment advisor and mutual fund rating agency.

 

Here are the top 10 Debt Mutual Funds with the highest return in 2021

S.No.	Fund	Category	2021 Returns (in %)	Risk level	Rated
1	Baroda BNP Paribas Credit Risk Fund	Credit Risk	20.07%	Moderately High	5 Star
2	IDBI Short Term Bond Fund	Short Duration	12.55%	Low to Moderate	4 Star
3	Sundaram Low Duration Fund	Low Duration	11.60%	Moderate	5 Star
4	Sundaram Short Duration Fund	Short Duration	10.86%	Low To Moderate	5 Star
5	UTI Bond Fund	Medium to Long Duration	9.85%	Moderate	5 Star
6	UTI Treasury Advantage Fund	Low Duration	9.08%	Low To Moderate	5 Star
7	UTI Short Term Income Fund	Short Duration	9.04%	Moderate	5 Star
8	HDFC Dynamic Debt Fund	Dynamic Bond	8.16%	Moderate	5 Star
9	Aditya Birla Sun Life Medium Term Plan	Medium Duration	7.69%	Moderately High	5 Star
10	HDFC Credit Risk Debt Fund	Credit Risk	7.58%	Moderately High	4 Star

Source- Valueresearchonline.com

Why should you invest in Debt Funds?

The majority of Debt investors prefer FD when it comes to safe and secure investment. The maturity sum for a bank deposit is known at the time of investment, also, you are fully aware of the amount you will receive at any given time. Whereas, this is not true of debt mutual funds, whose success is determined by market prices that change in response to changing interest rate scenarios.

When actively managed, mutual funds have the potential to produce returns that are higher than those provided by bank deposits. Depending on how he perceives the macroeconomic environment, the fund manager can deliberately lengthen the term and/or take on credit risk, positioning his fund to profit from the realisation of his expectations, whether through changes in interest rates or credit spreads.