Need help choosing a Debt fund from the following for SIP portfolio

POSTED BY shyam menon ON December 6, 2012 6:42 pm COMMENTS (5)

Hi All,

         Will be great to get a view on a debt fund to hold in the SIP porfolio for the long term (15-20 years). I have been looking at the following three –

1) SBI Dynamic Fund

2) Canara Robeco Income

3) Birla Sun Life GSF Long term

I do have Large Cap, Mid and Small cap and Hybrid funds selected for the SIP and would love to know if there is value in holding a debt fund such as one of the ones above in the SIP as well.

Thank you so much,


5 replies on this article “Need help choosing a Debt fund from the following for SIP portfolio”

  1. Vikas Vyas says:


    In context of above, can we consider HDFC Prudence as Balance Fund?

    Also, debt funds invite 10% tax with indexation or 20% without indexation where as Balance Funds is termed as Equities so there is no Tax after one year. Lot of Balanced funds are doing better than pure debt funds. Ofcourse balance funds does have enough exposure to equities unlike debt funds, but chances of huge loss is minimized with debt also playing part in them.

    Hence, if one wants to invest in Debt Fund long term, investing in Balanced Funds should be a smarter choice right? Am I missing something here??



  2. TheZionView says:

    If you are investing in Equity MF only then dont think you dont have debt in your portfolio

    If your employed EPF is Debt product calc that amount also as part of your investment or PPF.If nothing else is there you can think of having a debt fund part but you may wanna prefer to go with a Balanced fund for long term investment in debt part

  3. shyam menon says:

    Hi Rinks,
    Thank you so much for such a detailed response. I really appreciate it.
    Here is my SIP distribution – please do let me know what you think –

    – Quantum Long Term Equity,

    Mid Cap
    – IDFC Premier Equity,
    – HDFC Midcap

    Large Cap
    – ICICI Pru Focussed Bluechip

    – HDFC Balanced

    SBI Dynamic Bond

  4. Rinks says:

    Hello Shyam,

    Though debt funds are safest across mutual fund but as per my mind they are not mint for long term investment the way you’re thinking. Long term DEBT mutual funds means 2-3 years of holding.
    Logically DEBT funds are useful in case you’re sure that you would require money in short to medium time like year to 2 years.For that only park your money from Equity to DEBT mutual funds and have safety of return. Equity MF is for a person who can hold investment atleast for 3 year. If you dont want to put in money for 3 years in Equity MF then either switch to DEBT or do direct exposure in Equity stocks as you would have better returns.

    For longer period you might also think of MIPs like Reliance MIP or HDFC MIP which could deliver returns of 12-16% in case equity market us performing well or 8-12% in case equity is not good and DEBT is performing well.

    But for sure returns, I better choose pure DEBT funds without considering returns on them but funds you chose have consistence performance.

    for more than 3 years, put money only in Equity with more exposure to Mid cap funds. I know all analyst are saying that you shud money in Large caps and less in mid caps. But do analysis own your own and see in last 5-7 years Large caps did well or mid caps. Mid caps will do always better then Large caps. But put in money where large exposure given to Small caps.

    Following are my personal Equity Funds in which i am doing investments since 2-3 years and will do investment for 5-7 years depending on my requirements.
    – HDFC Mid Cap (Mid Cap)
    – SBI Emerging Fund (Mid Cap)
    – ICICI Prud Discovery (Mid Cap)
    – Quantum LT Fund (Multi Cap)

    For 2-3 years holding, i m investing in
    – JM Money Manager (Short Term Debt)
    – ICICI Pru Blended – Plan A (Equity Arbitrage for more than 1 year – As returns will be tax FREE and giving around 8-9% return)
    – SBI Dynamic Bond

    For my retirements
    – HDFC Balanced Fund

  5. Ramesh says:

    Why not Templeton Income Builder or Income Opportunities fund ?

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