In the past few months, market volatility has made investors jittery. While equity fund returns have been deep in the red, fixed income markets saw the credit crisis deepen.
Given the turbulent times, investors are looking for investment options that could protect their downside. And one of the solutions has been good quality corporate bond funds. Data on Value Research shows that corporate bond funds delivered a CAGR of over 11% in the last one year with little volatility.
Corporate bond funds mostly invest in high quality debt papers, government bonds and money market instruments. As a result, they provide adequate liquidity, low volatility and high credit quality.
Moreover, corporate bond funds offer superior returns as compared to traditional saving instruments like FD with minimum risk.
If you are looking for a corporate bond fund, Aditya Birla Sun Life Corporate Bond Fund is a good choice. Staying true to its label, the fund invests in high quality and credit worthy bonds. In fact, currently it holds around 98% in diversified AAA, sovereign bonds and cash.
This fund is the largest corporate bond fund in the industry. It has outperformed its benchmark in 1-year, 2-year, 3-year, 5-year and 10-year time. In fact, it has delivered double-digit returns in the last two years even as the fixed income market went through one of its toughest phases.
Further, the current market scenario also augurs well for ABSL Corporate Bond Fund. There are concerns over India’s growth. And this could prompt the RBI to announce further rate cuts. Therefore, locking the current yield levels with an investment avenue like ABSL Corporate Bond Fund seems a sensible option.
You can use this fund as an investment vehicle to park money for 6 months to 3 years. You can also recommend it to your clients who seek regular income.
