Dynamic bond fund category has offered an average return of around 7.92% in 2023, an analysis of performance of the category by ETMutualFunds showed. There were around 22 schemes in the dynamic bond fund category. Top four dynamic bond funds offered over 7% in 2023.
DSP Strategic Bond Fund, the topper in the category, offered 7.92% in 2023. ICICI Prudential All Seasons Bond Fund gave 7.58%. Quantum Dynamic Bond Fund gave around 7.22%. SBI Dynamic Bond Fund gave 7.11%.
The dynamic bond fund category had an allocation of around 68.17% in sovereign rated papers. The category had an allocation of 12.5% in AAA rated papers. The category had an allocation of 11.05% in AA rated papers. The category had also invested 6.65% in cash and cash equivalents. The dynamic bond fund category had an allocation of 1% in A1 rated papers. The category had an allocation in others of around 0.41%. The dynamic bond fund category had an allocation of 0.19% in unrated papers and an allocation of 0.04% in BBB rated papers.
The dynamic bond fund category had an allocation of around 67.29% in papers that had maturity of more than five years. The category had an allocation of 10.94% in papers that had maturity between one to three years. Around 10.20% was invested in papers with maturity between three to five years. Around 8.32% was invested in papers that had no maturity. Around 3.24% was invested in papers that had maturity up to 12 months.
According to the Amfi data, the dynamic bond fund category in 2023 witnessed a total inflow of Rs 6,275.17 crore.
The asset under management of the dynamic bond fund category as on November 30, 2023 stands at Rs 30,698.15 crore. The asset under management of the dynamic bond fund category has surged by 34.45% in 2023, from Rs 22,832.70 crore in January to Rs 30,698.15 crore in November.
Note, the above exercise is not a recommendation. The exercise was done to analyse how the dynamic bond fund category fared in 2023. One should not make investment or redemption decisions based on the above exercise.
If you are looking for recommendations, see:
Best dynamic bond funds to invest in 2023
Dynamic bond schemes have the freedom to invest across securities and maturities depending on the outlook of the fund manager. So, when the rates go up, the fund manager might bet on short term securities as a rate hike will marginally impact them. When rates start falling, he will invest in long-term instruments to make money. These schemes are ideal for investors who want to leave the job of taking a call on interest rate movements to their fund managers. Investors can invest in these schemes with a horizon of at least three years.
