Best corporate bond funds to invest in 2021 – Economic Times




In the aftermath of the credit crisis in the debt mutual fund space, investors started maintaining their distance from some debt fund categories. On the other hand, some debt funds emerged to be safe havens in this time. Corporate bond funds were among the favourites of mutual fund investors and advisors alike, in the last one year. Here is the first list of our recommended corporate bond funds to invest in 2021.

Mutual fund advisors believe that if you are looking for a debt mutual fund scheme to invest for a medium term of three to five years and don’t want to take too much risk on your investment, you may think of investing in corporate bond funds.

First things first, Nippon India Corporate Bond Fund, earlier known as Nippon India Prime Debt Fund, one of our recommended schemes, has not made it to the list this year. The scheme had been in the last quartile for the last seven months.

Corporate bond funds are less volatile than credit-risk funds, long-term debt schemes and gilt schemes, say mutual fund advisors. Corporate bond funds category has offered 9.95% returns in the last one year.

As per Sebi norms, corporate bond funds have the mandate to invest at least 80% of their corpus in the highest-rated corporate bonds. That means these schemes would invest most of their corpus in corporate bonds that are rated AAA. This is a great plus point in the current market conditions, where there are no
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