Long Duration Mutual Funds

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.

Long Duration Fund Returns Calculator

REGULAR INVESTMENT

SIP

Invest systematically in regular amounts and build a corpus with a disciplined investing habit.

START SIP

ONE 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 LUMPSUM

INVEST AMOUNT

PERIOD

RETURNS

Total Amount Invested

₹ 0

after 30 years you will get a return of

₹ 0

Disclaimer: Projections/estimations is backtested using historical data.

TARGETED RETURN VALUE

INVESTMENT PERIOD

RETURNS

Total Amount Invested

₹ 0

after 30 years you will get a return of

₹ 0

Disclaimer: Projections/estimations is backtested using historical data.

ABCD - One app to build a diversified

Invest in mutual funds online with the ABCD app and build your portfolio one click at a time.

A choice of different types of mutual fund schemes
Online investments with a fully integrated digital platform
Facility to switch, redeem and invest more from a single platform

Download our mobile app now

PLAY STORE

APP STORE

Scan the QR code to download our Mobile App

Download our mobile app now

PLAY STORE

APP STORE

Understanding Long Duration Funds

Table of Contents

What are Long Duration Funds?What are the features of long duration mutual funds?Things to keep in mind when investing in Long Duration Funds What are the types of risks that Long Duration Funds face?What is the tax implication of Long Duration Funds?What are the payout options?

What are Long Duration Funds?

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?

Offers stable returns on investment
There’s no capping on the maximum investment amount
Returns from these funds can go up to 10% p.a.
You can get better returns compared to fixed deposits
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?

Credit risk

Risk of default on the debt instrument
Interest rate risk

Risk of rising interest rates, which reduces the value of debt instruments
Inflation risk

Risk of inflation reducing the returns from the debt fund
Liquidity risk

Risk of not being able to trade in debt instruments

What is the tax implication of Long Duration Funds?

Returns earned are taxed at your income tax slab rates
Dividends earned, if any, are taxed at your income tax slab rates

What are the payout options?

Dividend option

Earn dividends on your investment at regular intervals
Growth option

Accumulate the returns over the investment tenure and get a lump sum amount on redemption

Portfolio Track

Consolidate with Portfolio Track

Consolidate assets, liabilities
Track portfolio at fingertips

Know more

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.