The below table shows a list Of the Best Dynamic Bond Fund – Dynamic Bond Fund Based on AUM, NAV and minimum SIP.
| Name | AUM (Cr) | NAV (Rs) | Minimum SIP (Rs) |
| ICICI Pru All Seasons Bond Fund | 12666.98 | 36.96 | 500 |
| SBI Dynamic Bond Fund | 3146.36 | 36.53 | 3000 |
| Kotak Dynamic Bond Fund | 2560.49 | 38.20 | 100 |
| Bandhan Dynamic Bond Fund | 2448.60 | 35.82 | 100 |
| Axis Dynamic Bond Fund | 1685.23 | 30.27 | 1000 |
| DSP Strategic Bond Fund | 1169.42 | 3372.93 | 100 |
| 360 ONE Dynamic Bond Fund | 781.60 | 22.04 | 1500 |
| HDFC Dynamic Debt Fund | 721.17 | 92.67 | 100 |
| UTI Dynamic Bond Fund | 465.51 | 31.29 | 1500 |
| PGIM India Dynamic Bond Fund | 108.48 | 2784.14 | 1000 |
Introduction to Dynamic Bond Fund
ICICI Prudential All Seasons Bond Fund
ICICI Prudential All Seasons Bond Fund is a Dynamic Bond mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
ICICI Prudential All Seasons Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹12,666.98 crores, a 5-year CAGR of 8.10%, an exit load of 0.25% and an expense ratio of 0.59%. The SEBI risk category is Moderately High. Its asset allocation includes 56.38% in Government Securities, 38.18% in Corporate Debt, 0.56% in Cash & Equivalents and 4.62% in Others.
SBI Dynamic Bond Fund
SBI Dynamic Bond Fund is a Dynamic Bond mutual fund scheme from SBI Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
SBI Dynamic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹3,146.36 crores, a 5-year CAGR of 7.29%, an exit load of 0.25% and an expense ratio of 0.62%. The SEBI risk category is Moderate. Its asset allocation includes 88.76% in Government Securities, 8.25% in Corporate Debt, 2.74% in Cash & Equivalents and 0.25% in Others.
Kotak Dynamic Bond Fund
Kotak Dynamic Bond Fund is a Dynamic Bond mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
Kotak Dynamic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹2,560.49 crores, a 5-year CAGR of 7.49%, an exit load of 0% and an expense ratio of 0.56%. The SEBI risk category is Moderately High. Its asset allocation includes 73.19% in Government Securities, 17.89% in Corporate Debt, 2.17% in Cash & Equivalents and 6.75% in Others.
Bandhan Dynamic Bond Fund
Bandhan Dynamic Bond Fund is a Dynamic Bond mutual fund scheme from Bandhan Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
Bandhan Dynamic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹2,448.60 crores, a 5-year CAGR of 7.31%, an exit load of 0% and an expense ratio of 0.75%. The SEBI risk category is Moderate. Its asset allocation includes 98.45% in Government Securities, 1.32% in Cash & Equivalents and 0.23% in Others.
Axis Dynamic Bond Fund
Axis Dynamic Bond Fund is a Dynamic Bond mutual fund scheme from Axis Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
Axis Dynamic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹1,685.23 crores, a 5-year CAGR of 7.10%, an exit load of 0% and an expense ratio of 0.26%. The SEBI risk category is Moderate. Its asset allocation includes 77.00% in Government Securities, 19.33% in Corporate Debt, 3.40% in Cash & Equivalents and 0.27% in Others.
DSP Strategic Bond Fund
DSP Strategic Bond Fund is a Dynamic Bond mutual fund scheme from DSP Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
DSP Strategic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹1,169.42 crores, a 5-year CAGR of 7.94%, an exit load of 0% and an expense ratio of 0.53%. The SEBI risk category is Moderate. Its asset allocation includes 77.75% in Government Securities, 12.85% in Corporate Debt, 9.24% in Cash & Equivalents and 0.17% in Others.
360 ONE Dynamic Bond Fund
360 ONE Dynamic Bond Fund is a Dynamic Bond mutual fund scheme from 360 ONE Mutual Fund. This fund has been operational for 11 years and 3 months, having been launched on June 6, 2013.
360 ONE Dynamic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹781.60 crores, a 5-year CAGR of 7.05%, an exit load of 0% and an expense ratio of 0.27%. The SEBI risk category is Moderately High. Its asset allocation includes 51.85% in Government Securities, 36.22% in Corporate Debt, 3.15% in Cash & Equivalents and 8.78% in Others.
HDFC Dynamic Debt Fund
HDFC Dynamic Debt Fund is a Dynamic Bond mutual fund scheme from HDFC Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
HDFC Dynamic Debt Fund falls under the Dynamic Bond Fund category with an AUM of ₹721.17 crores, a 5-year CAGR of 7.64%, an exit load of 0% and an expense ratio of 0.74%. The SEBI risk category is Moderately High. Its asset allocation includes 82.49% in Government Securities, 8.95% in Corporate Debt, 2.05% in Cash & Equivalents and 6.51% in Others.
UTI Dynamic Bond Fund
UTI Dynamic Bond Fund is a Dynamic Bond mutual fund scheme from UTI Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
UTI Dynamic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹465.51 crores, a 5-year CAGR of 8.57%, an exit load of 0% and an expense ratio of 0.70%. The SEBI risk category is Moderate. Its asset allocation includes 85.02% in Government Securities, 10.00% in Corporate Debt, 4.71% in Cash & Equivalents and 0.27% in Others.
PGIM India Dynamic Bond Fund
PGIM India Dynamic Bond Fund is a Dynamic Bond mutual fund scheme from PGIM India Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.
PGIM India Dynamic Bond Fund falls under the Dynamic Bond Fund category with an AUM of ₹108.48 crores, a 5-year CAGR of 6.90%, an exit load of 0% and an expense ratio of 0.35%. The SEBI risk category is Moderate. Its asset allocation includes 86.05% in Government Securities, 7.75% in Corporate Debt, 5.88% in Cash & Equivalents and 0.32% in Others.
Dynamic Mutual Funds Meaning
Dynamic Bond Funds are a type of debt mutual fund that allows fund managers to actively adjust the portfolio’s duration and asset allocation based on their interest rate outlook. These funds aim to optimize returns by investing across various debt instruments with different maturities.
Dynamic Bond Funds have the flexibility to invest in both short-term and long-term debt securities. Fund managers can shift the portfolio’s focus between government securities, corporate bonds and other debt instruments based on market conditions.
These funds are designed to adapt to changing interest rate environments, potentially benefiting from both rising and falling interest rate scenarios. They offer a balanced approach to debt investing, aiming to maximize returns while managing interest rate risk.
Features of Best Dynamic Bond Funds India
The main features of Best Dynamic Bond Funds in India include flexible duration management, active portfolio allocation, potential for higher returns, professional fund management and adaptability to changing market conditions.
- Flexible Duration: Dynamic Bond Funds can adjust their portfolio duration based on interest rate expectations, potentially minimizing interest rate risk.
- Active Allocation: Fund managers actively allocate assets across various debt instruments, aiming to capitalize on market opportunities.
- Return Potential: By adapting to market conditions, these funds aim to generate higher returns compared to traditional bond funds.
- Professional Management: Experienced fund managers use their expertise to navigate complex bond markets and make informed investment decisions.
- Market Adaptability: These funds can potentially perform well in various market scenarios by adjusting their strategy based on economic and market conditions.
Top Dynamic Bond Funds Based on Expense Ratio
The table below shows the Dynamic Bond Funds Based on Expense Ratio.
| Name | Expense Ratio (%) | Minimum SIP (Rs) |
| Axis Dynamic Bond Fund | 0.26 | 1000 |
| 360 ONE Dynamic Bond Fund | 0.27 | 1500 |
| PGIM India Dynamic Bond Fund | 0.35 | 1000 |
| DSP Strategic Bond Fund | 0.53 | 100 |
| Kotak Dynamic Bond Fund | 0.56 | 100 |
| ICICI Pru All Seasons Bond Fund | 0.59 | 500 |
| SBI Dynamic Bond Fund | 0.62 | 3000 |
| UTI Dynamic Bond Fund | 0.7 | 1500 |
| HDFC Dynamic Debt Fund | 0.74 | 100 |
| Bandhan Dynamic Bond Fund | 0.75 | 100 |
Best Dynamic Bond Funds In India Based on 3Y CAGR
The table below shows Dynamic Bond Funds In India Based on 3Y CAGR.
| Name | CAGR 3Y (Cr) | Minimum SIP (Rs) |
| UTI Dynamic Bond Fund | 11.61 | 1500 |
| SBI Dynamic Bond Fund | 7.15 | 3000 |
| ICICI Pru All Seasons Bond Fund | 7.14 | 500 |
| DSP Strategic Bond Fund | 6.86 | 100 |
| Kotak Dynamic Bond Fund | 6.83 | 100 |
| PGIM India Dynamic Bond Fund | 6.69 | 1000 |
| Bandhan Dynamic Bond Fund | 6.51 | 100 |
| 360 ONE Dynamic Bond Fund | 6.46 | 1500 |
| HDFC Dynamic Debt Fund | 6.19 | 100 |
| Axis Dynamic Bond Fund | 6.02 | 1000 |
Best Dynamic Bond Fund To Invest Based on Exit Load
The table below shows Dynamic Bond Fund To Invest Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.
| Name | AMC | Exit Load (%) |
| UTI Dynamic Bond Fund | UTI Asset Management Company Private Limited | 0 |
| DSP Strategic Bond Fund | DSP Investment Managers Private Limited | 0 |
| Kotak Dynamic Bond Fund | Kotak Mahindra Asset Management Company Limited | 0 |
| PGIM India Dynamic Bond Fund | PGIM India Asset Management Private Limited | 0 |
| Bandhan Dynamic Bond Fund | Bandhan AMC Limited | 0 |
| 360 ONE Dynamic Bond Fund | 360 ONE Asset Management Limited | 0 |
| HDFC Dynamic Debt Fund | HDFC Asset Management Company Limited | 0 |
| Axis Dynamic Bond Fund | Axis Asset Management Company Ltd. | 0 |
| SBI Dynamic Bond Fund | SBI Funds Management Limited | 0.25 |
| ICICI Pru All Seasons Bond Fund | ICICI Prudential Asset Management Company Limited | 0.25 |
Dynamic Bond Fund returns
The table below shows Dynamic Bond Fund returns based on 1Y return.
| Name | Absolute Returns – 1Y (%) | Minimum SIP (Rs) |
| Bandhan Dynamic Bond Fund | 11.58 | 100 |
| Kotak Dynamic Bond Fund | 10.40 | 100 |
| PGIM India Dynamic Bond Fund | 10.15 | 1000 |
| DSP Strategic Bond Fund | 10.12 | 100 |
| SBI Dynamic Bond Fund | 9.61 | 3000 |
| HDFC Dynamic Debt Fund | 9.41 | 100 |
| 360 ONE Dynamic Bond Fund | 9.29 | 1500 |
| UTI Dynamic Bond Fund | 9.13 | 1500 |
| ICICI Pru All Seasons Bond Fund | 8.90 | 500 |
| Axis Dynamic Bond Fund | 8.63 | 1000 |
Historical Performance of Dynamic Bond Mutual Funds
The table below shows the Historical Performance of Dynamic Bond Mutual Funds Based on 5Y return.
| Name | CAGR 5Y (Cr) | Minimum SIP (Rs) |
| UTI Dynamic Bond Fund | 8.57 | 1500 |
| ICICI Pru All Seasons Bond Fund | 8.10 | 500 |
| DSP Strategic Bond Fund | 7.94 | 100 |
| HDFC Dynamic Debt Fund | 7.64 | 100 |
| Kotak Dynamic Bond Fund | 7.49 | 100 |
| Bandhan Dynamic Bond Fund | 7.31 | 100 |
| SBI Dynamic Bond Fund | 7.29 | 3000 |
| Axis Dynamic Bond Fund | 7.10 | 1000 |
| 360 ONE Dynamic Bond Fund | 7.05 | 1500 |
| PGIM India Dynamic Bond Fund | 6.90 | 1000 |
Factors to Consider When Investing in Dynamic Bond Funds
When investing in Dynamic Bond Funds, consider the fund manager’s expertise, historical performance, expense ratio, portfolio composition and the fund’s ability to adapt to changing interest rate scenarios. These factors can significantly impact the fund’s performance and suitability for your investment portfolio.
- Fund Manager Expertise: Assess the fund manager’s experience and track record in managing dynamic bond portfolios. Their skill in reading interest rate trends is crucial.
- Historical Performance: Evaluate the fund’s performance across different market cycles. Look for consistency in returns and the ability to manage downside risk.
- Expense Ratio: Compare expense ratios across different dynamic bond funds. Lower fees can have a substantial impact on long-term returns.
- Portfolio Composition: Examine the fund’s current allocation across different types of bonds and maturities. This can give insights into the fund’s strategy.
- Interest Rate Sensitivity: Assess how well the fund has navigated different interest rate environments in the past. This can indicate its potential future performance.
How to Invest in Top Dynamic Bond Funds?
To invest in top Dynamic Bond Funds, start by researching funds with strong long-term performance and experienced fund managers. Consider factors like expense ratios, historical returns and the fund’s ability to navigate different interest rate scenarios. Align the investment with your financial goals and risk tolerance.
Choose between lump sum investments or Systematic Investment Plans (SIPs) based on your financial situation. SIPs can be beneficial for averaging out the impact of market volatility over time.
Open an account with Alice Blue. Complete the necessary documentation, including KYC requirements and initiate your investment. Regularly review your portfolio, keeping an eye on interest rate trends and the fund’s performance relative to its benchmark.
Impact of Market Trends on Dynamic Bond Fund
Market trends significantly impact Dynamic Bond Funds. Interest rate movements, economic indicators, inflation rates, and monetary policy changes can all influence the performance of these funds. Fund managers adjust the portfolio based on these trends to optimize returns.
During periods of falling interest rates, dynamic bond funds may increase the duration to benefit from the price appreciation of longer-term bonds. Conversely, in rising rate scenarios, they might shift to shorter duration bonds to minimize interest rate risk.
How Dynamic Bond Funds Perform in Volatile Markets?
Dynamic Bond Funds are designed to adapt to volatile markets. In periods of market uncertainty, these funds can adjust their portfolio to manage risk while seeking opportunities. Their flexible mandate allows them to navigate changing market conditions more effectively than traditional bond funds.
During volatility, fund managers may shift to higher-quality bonds or adjust duration to protect the portfolio. They can also capitalize on market dislocations by investing in undervalued securities, potentially enhancing returns when markets stabilize.
Advantages of Investing in Dynamic Bond Mutual Funds
The main advantages of investing in Dynamic Bond Mutual Funds include flexibility in portfolio management, the potential for higher returns, professional fund management, the ability to adapt to changing interest rate scenarios and diversification within the debt market.
- Flexibility: Dynamic Bond Funds can adjust their portfolio based on market conditions, potentially optimizing returns across different interest rate environments.
- Return Potential: By actively managing duration and allocation, these funds aim to generate higher returns compared to traditional bond funds.
- Professional Management: Experienced fund managers use their expertise to navigate complex bond markets and make informed investment decisions.
- Interest Rate Adaptation: These funds can potentially perform well in both rising and falling interest rate scenarios by adjusting their strategy.
- Debt Market Diversification: Dynamic Bond Funds typically invest across various debt instruments, providing diversification within the fixed-income space.
Risks of Investing in Dynamic Bond Mutual Funds
The main risks of investing in Dynamic Bond Mutual Funds include interest rate risk, credit risk, liquidity risk, fund manager risk and potential for underperformance. Investors should be aware of these risks before allocating funds to dynamic bond strategies.
- Interest Rate Risk: Incorrect interest rate predictions by fund managers can lead to suboptimal portfolio positioning and potential losses.
- Credit Risk: Investments in corporate bonds carry the risk of default or credit rating downgrades, which can impact fund performance.
- Liquidity Risk: Some bonds in the portfolio may face liquidity issues, particularly during market stress, potentially affecting fund liquidity.
- Fund Manager Risk: The fund’s performance heavily relies on the fund manager’s decisions and market predictions, which may not always be accurate.
- Underperformance Risk: In stable interest rate environments, dynamic bond funds may underperform more focused strategies due to higher costs and frequent portfolio changes.
Contribution of Dynamic Bond Fund to Portfolio Diversification
Dynamic Bond Funds can contribute to portfolio diversification by providing exposure to a wide range of debt securities and the potential to adapt to changing market conditions. These funds can complement equity investments and other fixed-income strategies in a diversified portfolio.
By adjusting duration and asset allocation, dynamic bond funds can potentially provide stability during equity market volatility while still offering the opportunity for reasonable returns. They can serve as a core fixed-income holding in a balanced investment portfolio.
Who Should Invest In Dynamic Bond Funds?
Dynamic Bond Funds are suitable for investors seeking exposure to debt markets but who prefer a more actively managed approach. These funds can be appropriate for those who want to benefit from potential interest rate movements but lack the expertise to make such decisions themselves.
Investors should have a medium to long-term investment horizon, typically 3-5 years or more. They should be comfortable with some degree of volatility in returns, as these funds may underperform in certain market conditions.
Impact of Fund Manager Expertise on Dynamic Bond Fund Performance
Fund manager expertise has a significant impact on Dynamic Bond Fund performance. The success of these funds largely depends on the manager’s ability to accurately predict interest rate trends and make timely portfolio adjustments.
Skilled managers can potentially enhance returns by correctly positioning the portfolio for interest rate changes, identifying attractive securities and managing risks effectively. Their expertise in credit analysis and market timing can be crucial in navigating different market cycles.
Dynamic Bond Fund Taxation
Taxation of Dynamic Bond Funds depends on the holding period. For holdings up to 3 years, gains are treated as short-term capital gains and taxed at the investor’s income tax slab rate. For holdings over 3 years, gains are treated as long-term capital gains and taxed at 20% with indexation benefits.
Dividends received from Dynamic Bond Funds are taxable in the hands of investors at their applicable income tax slab rates. It’s advisable to consult a tax professional for personalized advice based on your specific financial situation and the latest tax regulations.
FAQs – Best Dynamic Bond Fund In India
Dynamic bond funds in mutual funds are debt funds that actively manage interest rate changes by adjusting the portfolio’s duration. They invest in a mix of short-term and long-term bonds, aiming to provide optimal returns by shifting between various debt instruments based on market conditions.
Top 5 Dynamic Bond Mutual Funds #1: ICICI Pru All Seasons Bond Fund
Top 5 Dynamic Bond Mutual Funds #2: SBI Dynamic Bond Fund
Top 5 Dynamic Bond Mutual Funds #3: Kotak Dynamic Bond Fund
Top 5 Dynamic Bond Mutual Funds #4: Bandhan Dynamic Bond Fund
Top 5 Dynamic Bond Mutual Funds #5: Axis Dynamic Bond Fund
These funds are listed based on the Highest AUM.
The best dynamic bond mutual funds based on expense ratio are Axis Dynamic Bond Fund, 360 ONE Dynamic Bond Fund, PGIM India Dynamic Bond Fund, DSP Strategic Bond Fund and Kotak Dynamic Bond Fund. These funds offer a balanced approach to managing interest rate risks with competitive expenses.
Dynamic Bond Funds carry moderate risk. While they offer the potential for higher returns than traditional bond funds, they can be volatile. Assess your risk tolerance and investment goals before investing. Consider them as part of a diversified portfolio.
Exit loads for Dynamic Bond Funds vary by fund. Many funds have an exit load of 0.5-1% for redemptions within 3-12 months of investment. Some funds may have no exit load. Check the specific fund’s details before investing.
The dynamic bond mutual fund with the best returns over the last five years is UTI Dynamic Bond Fund. With its flexible investment strategy, it has delivered consistent performance, offering competitive returns to investors while managing interest rate changes effectively.
To invest in the best Dynamic Bond Mutual Fund, research funds with strong long-term returns and experienced managers. Open an account with Alice Blue, complete KYC requirements, and start investing through lump sum or SIP options.
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Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
