• Investment
  • Car
  • Bike
  • Taxi
  • Term Life
  • Health
  • Travel

HDFC Corporate Bond Fund

(Erstwhile HDFC Medium Term Opportunities Fund)

HDFC Medium Term Opportunities Funds is currently known as HDFC Corporate Bond Fund and is an income generation scheme with a suggested investment period of 6-12 months.

The fund falls under moderately low-risk type that aims at income generation through investment in debt (including govt. securities) and money market securities with maturities not exceeding 60 months.

The fund's portfolio has a modified duration of 2.99 years and average maturity of 4.08 years.

The return since inception of the fund is 8.84%, making it one of the top-performing funds in the category.

Overview of HDFC Corporate Bond Fund

The scheme HDFC Medium Term Opportunities Fund was launched on June 29th, 2010. However, on May 2018, the scheme got merged with two other funds namely the HDFC Floating Rate Income Fund–Long Term Plan and the HDFC Gilt Fund–Short Term Plan, to become HDFC Corporate Bond Fund.

It is an open-ended debt scheme that primarily invests debt securities of corporates and governments with ratings AA+ and above. The investment objective of the fund is:

To generate income/capital appreciation through investments predominantly in AA+ and above rated corporate bonds.

The fund is suitable for those who are looking for:

  • Income over short to medium term.
  • Capital appreciation through investing primarily in AA+ and above rated corporate debt securities.

Features of HDFC Corporate Bond Fund

  • The fund's benchmark index is CRISIL Composite Bond Fund Index.
  • The fund's Entry Load and Exit Load is both NIL.
  • The minimum application amount for the fund is Rs. 5,000.
  • The minimum amount for Additional Purchase or SIP amount is Rs. 1,000 and any amount thereafter.
  • The minimum normal withdrawal and minimum SWP withdrawal amount is Rs. 500.
  • The scheme is offered in both Regular Plan and Direct Plan.
  • Under the normal Dividend Payout option, dividends are distributed quarterly and are subject to availability of surplus.

Statistics of HDFC Corporate Bond Fund

Following are key ratios and metrics of HDFC Corporate Bond Fund:

Asset Under ManagementRs. 12,910 (As on Aug 31, 2019)
Expense Ratio (Regular Option)0.45
Expense Ratio (Direct Option0.30
Alpha1.43
Beta0.71
Sortino1.41

Portfolio Characteristics

ParametresFund52w High52w LowCategory
Modified Duration2.99 years3.04 years1.46 years2.45 years
Average Maturity4.08 years4.21 years1.73 years3.19 years
Yield to Maturity7.268.877.267.37
No. of Securities11914611756

Fund Performance of HDFC Corporate Bond Fund

This fund is one of the top-ranked funds in the category and has consistently outperformed its benchmark and the category since inception.

Click here to know more about the Returns in Both Regular and Direct Option

Top Holdings of HDFC Corporate Bond Fund

Asset Allocation Breakup

Click here to know about Asset Allocation Breakup HDFC Corporate Bond Fund

Why Invest in HDFC Corporate Bond Fund?

HDFC Corporate Bond Fund belongs to a leading asset management company of India, which is known for its disciplined style of investing and generating above-average returns in both equity and debt category of mutual funds.

HDFC Corporate Bond Fund is no different and is constantly ranked top 5 in the fixed income group of mutual funds. Since its launch in June 2010, the fund has continuously outperformed its category and benchmark by healthy margins, even beating returns of some good equity mutual funds in the short term.

The fund has a moderate risk profile which offers a safer bet for investors with short to medium-term outlook. The fund is the second-largest mutual fund in the corporate bond fund category.

Some positive of the fund:

  • The fund invests in high-rated (AA+ and above) debt instruments of both corporates and government, making it highly secure.
  • 90% of the fund's asset has the highest credit rating.
  • Lower expense ratio in its category of funds translating in higher returns for investors.
  • Has constantly beaten its benchmark and category in the last five years.
  • Standard Deviation of 2.08, Sharpe Ratio of 0.79 indicating low volatility and least deviations in returns.
  • Modified Duration of 2.99 years and Average Maturity of 4.08 years indicates a low-interest rate risk for the fund.
  • The Alpha of 1.43 indicating the return of the fund is outperforming with respect to its benchmark is adjusted for risk.
  • The fund's beta of 0.71 indicates the returns are not fully aligned with the benchmark, which helps it to outperform in the category.

With the falling interest rate scenario currently prevailing in the economy, the HDFC Corporate Bond Fund provides a good opportunity to earn higher returns while investing in a moderately risked debt fund.

The fund's low-risk ratios combined with a low operating cost makes it an ideal option for short to medium-term investment.

Documents Required for HDFC Medium Term Opportunities Fund

You can apply to invest in HDFC Corporate Bond Fund either through online or offline modes.

Online Mode

The online process is very easy and quick and an investor can generate higher returns by investing in the Direct Option of mutual funds. Following are the steps involved to invest online:

  1. Create an account with HDFC MF online portal or any third-party apps offering mutual fund investments.
  2. Fulfil the e-KYC procedure for which you have to furnish the details of your PAN Card and Aadhaar Card. After successful verification of the e-KYC process, you can start investing. e-KYC or KYC verification is a one-time process and an investor can continue with his/her investing plans if it's done earlier.
  3. Then, select the fund you want to invest in and completely fill out the application form and link your bank account to successfully make the investment.

Offline Mode

Under this mode, an investor needs to approach the investor services centre of HDFC mutual fund or any registered financial advisor. You need to submit the following documents to start with your investments:

  • Duly filled and signed in Application Form.
  • Signed copy of PAN Card.
  • Signed copy of Aadhaar Card.
  • Bank Account Statement.
  • A Cheque leaf with the investment amount.
  • Cancelled Cheque in case of SIP investment.

Cash investment in the mutual fund is allowed up to Rs. 50,000 per investor per financial year as per SEBI guidelines.