2025, Vol. 8, Issue 1

author(s)
R Arunachalam, R Amudha, S Ritika, NS Saraswathy and P Swathi

abstract
A mutual fund is a product that diversifies investing in a wide range of securities. It collects money from various investors to build a portfolio that includes equities, bonds, debentures, government securities, gold and other asset classes. Through diversified asset allocation, the underlying securities spread risk to address the diverse financial goals of investors; this approach has made mutual funds a preferred option for many investors. The modern financial landscape of today characterised by market volatility and shifting economic conditions drives investors to opt for those avenues that yield stable returns and less volatility. Debt mutual fund schemes, which are known for their ability to provide regular income, preserve capital and deliver expected returns, have attracted significant attention among conservative investors. Despite the importance of debt funds in investment portfolios, limited academic studies have been conducted about their performance measure. The study identifies six major Asset Management Companies (AMCs) based on their Average Assets Under Management (AAUM), and the study evaluates their debt scheme performance using key financial metrics over five years ending 31st March 2024. The study uses secondary data from the Association of Mutual Funds in India (AMFI) and identifies the “CRISIL Medium to Long Duration Debt A - III Index” as the benchmark index. The results indicate variations in scheme performance, with SBI Magnum Income Fund emerging as a balanced option, HDFC Income Fund indicating higher market sensitivity, Nippon India Income Fund offering stability, and ICICI Prudential Bond Fund demonstrating superior risk-adjusted outcomes. Future studies are recommended to explore the impact of interest rate fluctuations, economic cycles, inflation and emerging ESG considerations on the performance dynamics of debt mutual fund schemes.