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What’s in a Name

Debt mutual funds are not designed for retail investors at all. Instead, this variety attracts institutional investors the most

Fixed income fund was supposed to be the simple choice for risk-averse investor: decide on the term of investment and put your money in the appropriate kind. But, is it really that simple given the huge variety of debt funds available with not much to separate when it comes to their investment mandate? To be fair, barring basic schemes such as dynamic bond funds, plain income funds, ultra short-term and short-term funds, debt mutual funds are not designed for retail investors at all. Instead, this variety attracts institutional investors the most as they are actually the biggest investors in debt funds. Simply put, don’t commit your money to something which you don’t understand. Gather complete information and invest only if it suits your investment goal. Below are different debt schemes run by 2 AMCs and see for yourself how different they are from one another.

Birla Sun Life Mutual Fund
Income Funds
BSL Dynamic Bond Fund manages assets worth Rs 14,710 crore and tries to limit its modified duration at 3.5 years
BSL Short Term Fund manages assets worth Rs 4,271 crore and limits the modified duration to go beyond moderate levels of 1.5 years
BSL Income Plus Fund manages Rs 3,927 crore and has the flexibility to vary maturity over wide range
BSL Medium Term Fund manages Rs 580 crore and limits the average maturity from exceeding 2-2.5 yrs

Liquid Funds
BSL Cash Plus Fund manages Rs 7,737 crore and holds a mix of money market instruments that have up to 60 days maturity.
BSL Floating Rate Short Term fund manages Rs 1,094 crore and takes no duration risk compared to the Long Term option

Ultra Short Term Funds
BSL Saving Fund manages Rs 5,222 crore and its average maturity hasn't exceeded 1 year from mid-2007
BSL Cash Manager Fund manages assets worth Rs 2,366 crore and takes lower duration calls compared to savings fund
BSL Floating Rate Long Term Fund manages Rs 2,123 crore and holds a mix of CP/ CD/ Bonds with less than 1 year maturity
BSL Ultra Short Term Fund manages Rs 505 crore and invests in securities with less than 1 yr maturity
BSL Short Term Opportunities Fund manages assets worth Rs 438 crore and invests in AA and lower rated papers, with maturity of 1-1.5 years

Gilt: Medium Long Term Funds BSL GSF Long Term Fund manages assets worth Rs 516 crore. The fund has greater flexibility in duration calls compared to Gilt Plus fund
BSL Gilt Plus Regular Fund manages Rs 89 crore and maintains 10 year average maturity
BSL Gilt Plus PF Fund manages Rs 27 crore and offers Provident fund option of Gilt Plus plan

Gilt: Short Term
BSL Gilt Plus Liquid Fund manages Rs 10 crore and invests in G-secs of shorter maturity
BSL GSF Short Term manages Rs 1cr and invests in G-secs of shorter maturity

Franklin Templeton Mutual Fund
Income Funds
Templeton India Corporate Bond Opportunities Fund manages assets worth Rs 3,812 crore and has a stated maturity limit of 36 months
Templeton India Income Opportunities manages Rs 3,020 crore and invests mostly in debentures and structured obligations
Templeton India Income Builder Fund manages assets worth Rs 1,028 crore and holds securities with an average maturity ranging between 1-21 years
Templeton India Income manages Rs 534 crore and its average maturity has largely remained under 5-6 years

Liquid Funds
Templeton India TMA Super Inst manages assets worth Rs 1,575 crore and invests in short-term and money market instruments.
Templeton India Cash Mgmt Account Fund manages Rs 276 crore and it's the expensive liquid fund with 1.08 per cent expense ratio

Short Term Fund
Templeton India Short Term Income Retail Fund manages assets worth Rs 5,780 crore and invests in corporate bonds including PTCs

Ultra Short Term Funds
Templeton India Ultra Short Bond Super Institutional Fund manages Rs 3,469 crore and invests in short term debt and money market instruments
Templeton India Low Duration Fund manages Rs 2,273 crore and takes slightly higher maturity bets than Ultra Short Term Bond Fund
Templeton Floating Rate Ret Fund manages Rs 497 crore and invests primarily in floating and short term fixed rate debt

Gilt: Medium Long Term
Templeton India GSF Long-term Fund manages assets worth Rs 113 crore and invests in G-secs of longer maturity
Templeton India GSF Composite manages Rs 105 crore and invests in G-secs and has shown greater flexibility
Templeton India GSF PF manages assets worth Rs 105 crore and only allows investments from pension funds and trusts
Templeton India GSF Treasury Fund manages Rs 19 crore and invests in G-secs of short to moderate duration

Debt schemes of HDFC Mutual Fund, ICICI Mutual Fund and IDFC Mutual Fund will follow soon. Watch this space for next update.