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Aditya Birla Capital LimitedAditya Birla Capital Limited (“ABCL”) is a listed systemically important non-deposit taking Non-Banking Financial Company (NBFC) and the holding company of the financial services businesses. ABCL and its subsidiaries/JVs provides a comprehensive suite of financial solutions across Loans, Investments, Insurance, and Payments to serve the diverse needs of customers across their lifecycles. Powered by over 61,600 employees, the businesses of ABCL have a nationwide reach with over 1,690 branches and more than 200,000 agents/channel partners along with several bank partners.
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INR 1.65 Lakh CrABCL
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Long Duration Mutual Funds
- Average returns - Dynamic
- Number of funds - (Static)
What is a Long Duration Fund?
A Long Duration Fund is a debt mutual fund that invests in debt instruments having a long-term investment horizon. The Macaulay duration of the fund is 7 years and above.
Advantages of Long Duration Fund
Good returns
These funds invest in long-term debt instruments with a good return rate. As such, you can earn attractive returns on investment.
Long-term goals
Fulfil your long-term financial goals with these funds by steadily building a stable corpus.
Diversified portfolio
You get an actively managed, diversified portfolio that invests in high-quality bonds and debt instruments for attractive returns.
Explore Long Duration Fund
Most Popular
AUM: 23427(Cr)
Risk: Very High
- MIN. INVESTMENT 500
- 5 YRS RETURNS 33.32%
- Invest (Per Month) ₹10000
- Get (30 Yrs) ₹24,850*
*Projections/estimations is backtested using historical data.
Most Popular
- AUM: 23427(Cr)
- Risk: High
- MIN. INVESTMENT 1000
- 5 YRS RETURNS 33.32%
- Invest (Per Month) ₹15000
- Get (30 Yrs) ₹34,850*
*Projections/estimations is backtested using historical data.
Long Duration Fund Returns Calculator
REGULAR INVESTMENT
SIP
Invest systematically in regular amounts and build a corpus with a disciplined investing habit.
START SIPONE TIME INVESTMENT
Lump sum
Invest once with the facility of lump sum investing and save at your will. Time the market correctly and earn good returns.
INVEST LUMPSUMTotal Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
Total Amount Invested
₹ 0
after 30 years you will get a return of
₹ 0
Disclaimer: Projections/estimations is backtested using historical data.
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Understanding Long Duration Funds
Table of Contents
What are Long Duration Funds?
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A type of open-ended debt mutual fund, Long Duration Funds invest in corporate bonds and government securities with a high residual maturity. The Macaulay duration of the portfolio is 7 years and above. These funds are suitable for long-term financial planning.
What are the features of long duration mutual funds?
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Offers stable returns on investment
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There’s no capping on the maximum investment amount
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Returns from these funds can go up to 10% p.a.
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You can get better returns compared to fixed deposits
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The funds aim to grow the portfolio through interest earned and also through the rise in the price of the underlying securities
Things to keep in mind when investing in Long Duration Funds
Invest in these schemes only if you have a long-term saving horizon
Check the expense ratio of such schemes. A high ratio eats into the fund’s returns and should be avoided
Compare Long Duration Funds on their returns. A fund with the highest return is better
These funds face high interest rate risks since they invest in long-term debt securities which might fall in value if interest rates are cut.
What are the types of risks that Long Duration Funds face?
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Credit risk
Risk of default on the debt instrument
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Interest rate risk
Risk of rising interest rates, which reduces the value of debt instruments
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Inflation risk
Risk of inflation reducing the returns from the debt fund
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Liquidity risk
Risk of not being able to trade in debt instruments
What is the tax implication of Long Duration Funds?
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Returns earned are taxed at your income tax slab rates
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Dividends earned, if any, are taxed at your income tax slab rates
What are the payout options?
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Dividend option
Earn dividends on your investment at regular intervals
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Growth option
Accumulate the returns over the investment tenure and get a lump sum amount on redemption
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FAQs On Long Duration Funds
Long Duration Funds are debt mutual funds that invest in long-term fixed-income securities. They invest in high-quality companies for 5+ years and are exposed to a higher risk than shorter duration funds as they weather entire economic cycles.
The ideal investment horizon for Long Duration Funds is at least 7 years.
Long Duration Funds invest in debt securities and money market instruments to stay invested longer.
If you have long-term financial goals spanning 7+ years and are prepared for higher risks than shorter duration funds and fixed deposits, you should go for Long Duration Funds.
The benefits of Long Duration Funds include suitability for long-term goals, higher risk-return ratio, and stability against stock market volatility.
Yes, Long Duration Funds are riskier than short duration or medium duration funds, with a higher return potential as well.
In a falling market rate situation, you can expect better return potential than FDs on Long Duration Funds.
Yes, Long Duration Funds have the potential for a better rate of return than FDs (subject to risks) and shorter duration funds as well.
You will be taxed on Long Duration Fund redemption as per capital gains tax rules, depending on the investment period.
Considering the risk factor, Long Duration Funds offer better return potential than FDs at a certain risk, which FDs do not carry.
Long Duration Funds are not typically suitable for investment goals of less than a year due to their higher sensitivity to interest rate changes, which can lead to volatility and potential losses over shorter periods.
Long duration mutual funds tend to perform poorly in a falling interest rate scenario as their longer bond maturities result in greater price declines, offsetting the benefits of higher yields.
The biggest advantage of Long Duration Funds is their potential to offer higher returns compared to shorter-duration funds during periods of declining interest rates, as they benefit from capital appreciation.
The main disadvantage of Long Duration Funds is their higher sensitivity to interest rate changes, which can result in significant fluctuations in the fund's NAV and potential losses, especially in a rising interest rate environment.
Long Duration Funds can typically be sold at any time, but investors should be aware of potential liquidity issues, especially during periods of market stress or volatility.
Yes, Long Duration Funds can lose money, especially during periods of rising interest rates when bond prices decline, leading to capital losses for investors.
The primary difference between Long Duration Funds and gilt funds lies in their investment objectives and portfolio composition. Long Duration Funds typically invest in bonds with longer maturities, aiming for higher returns, while gilt funds invest primarily in government securities (gilts), offering relatively lower returns but greater safety and stability.
Types of Debt Mutual Funds
Funds Based On Duration
Funds Based On Portfolio Allocation
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Passively-managed mutual funds tracking a particular index
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