Crisil 10-year Gilt Index was up by 3.41% and the Nifty 10 yr Benchmark G-Sec was up by 3.17%. The muted returns could be attributed to monetary tightening by the central banks across the globe, including the Reserve Bank of India, to contain inflationary pressures in the economy. Central banks abroad has been saying that they may continue to raise rates as inflation continues to be a major threat to economic stability. In India, it seems, the RBI May hike rates this week by 25 basis points. However, it may pause afterwards, say money market participants.
Source: ACE MF, Absolute returns for the period starting April 1,2022 to March 31,2023
Reflecting the firm interest rates, long term funds were under pressure in the last financial year. Short duration funds fared better.
The liquid fund category offered the highest returns in the financial year 2022-23, followed by overnight funds. The liquid fund category offered 5.52% returns in the last financial year. Baroda BNP Paribas Liquid Fund offered the highest returns in the category of around 5.71%.
Overnight funds category offered an average return of around 5.35%. Bank of India Overnight Fund offered the highest return of around 5.48%. Indiabulls Overnight Fund offered around 5.17%, the lowest among the 28 schemes in the category.
Money market fund offered an average return of around 5.22% in the last financial year. Nippon India Money Market Fund, the topper in the category, offered 5.75% return. The lowest returns in the category was offered by Edelweiss Money Market Fund. The scheme offered 4.27%. Ultra short duration fund offered around 5.02% return in the last financial year. Baroda BNP Paribas Ultra Short Duration Fund offered the highest return of around 5.68%.
The floating rate fund category offered 4.89% in the financial year 2022-23. ICICI Prudential Floating Interest Fund was the topper in the category and ot offered 5.55% return.
Low duration fund category offered around 4.81% in the last financial year. ICICI Prudential Savings Fund, the topper in the category, offered 5.57% return and Baroda BNP Paribas Low Duration Fund offered the lowest return of around 4.44%.
Medium duration funds delivered an average return of around 4.57% in the financial year 2022-23. Aditya Birla Sun Life Medium Term Plan, the only scheme to offer double-digit return, offered 21.14% return. Sundaram Medium Term Bond Fund offered the lowest return of around 1.80%.
The credit risk fund managed to offer 4.46% return in the financial year 2022-23. Aditya Birla Sun Life Credit Risk Fund offered the highest return of around 7.48% and Kotak Credit Risk Fund offered the lowest return of around 0.75%.
Short duration fund category offered 4.24% return in the last financial year. Bank of India Short Term Income Fund was the topper in the category and offered 11.23% return. LIC MF Short-Term Debt Fund offered the lowest return of around 2.95%.
The dynamic bond fund category offered 4.23% returns in the financial year 2022-2023. UTI Dynamic Bond Fund was the topper in the category and offered 12.08% return. Mirae Asset Dynamic Bond Fund offered the lowest return of around 1.88%.
The banking and PSU Fund category offered 4.07% return in the financial year 2022-23. UTI Banking & PSU Debt Fund was the only scheme that offered a double-digit return. The scheme offered 11.04%. Invesco India Banking & PSU Debt Fund offered the lowest return of around 2.05%.
Long duration category offered around 4.05% in the last financial year. The category has only two schemes that have been there since the start of the financial year 2022-23. Nippon India Nivesh Lakshya Fund delivered 4.59% returns and ICICI Prudential Long Term Bond Fund offered 3.51% return.
Medium to long duration funds offered 4% returns in the last financial year. UTI Bond Fund was the only scheme that managed to offer double- digit returns. Bandhan Bond Fund offered the lowest return in the financial year 2022-23. The scheme offered 1.72% return.
