Floater Mutual Funds in India
Updated June 2026 · 26 active funds · data from AMFI NAVs
Floater funds must invest at least 65% of assets in floating-rate instruments, per SEBI - bonds whose coupons reset periodically with a reference rate rather than staying fixed. Because the coupon floats up as rates rise, these funds are structurally less sensitive to rising interest rates than fixed-coupon funds of similar maturity, making them a tool to hedge against a rising-rate environment. In practice many floaters use a mix of genuine floating-rate paper and fixed bonds swapped to floating, so effective duration and credit quality still vary by fund. The role is a debt allocation for investors who expect rates to rise or stay volatile and want to dampen the interest-rate hit - typically over a one-to-three-year horizon. Returns are usually steady, with the appeal being relative protection when rates climb. The default benchmark on FindMF is the NIFTY Low Duration Debt Index; as this composite debt index sits outside our ingested NSE equity feed, alpha and beta may be unavailable, while returns and risk metrics are fully computed. We derive trailing returns and risk metrics for all 26 Floater funds from AMFI-published daily NAVs using a disclosed methodology.
Who it suits: Investors with a one-to-three-year horizon who expect rising or volatile rates and want to soften the interest-rate hit.
92% of the 13 funds here with a computed alpha beat their benchmark over the measured window (positive alpha). Past performance is not indicative; this is analysis, not advice.
| # | Scheme | 1Y | 3Y | 5Y | Sharpe | Max DD | TER | AUM |
|---|---|---|---|---|---|---|---|---|
| 1 | Franklin India Floating Rate Fund Franklin Templeton | +6.03% | +8.30% | +7.08% | -0.22 | -0.5% | 0.28% | ₹306 Cr |
| 2 | ICICI Prudential Floating Interest Fund ICICI Prudential | +6.66% | +8.26% | +7.16% | -0.08 | -0.9% | 0.30% | ₹7.3K Cr |
| 3 | Axis Floater Fund Axis | +5.06% | +7.99% | - | -0.13 | -1.3% | 0.31% | ₹150 Cr |
| 4 | KOTAK FLOATING RATE FUND Kotak Mahindra | +6.06% | +7.97% | +6.71% | -0.45 | -1.1% | 0.26% | ₹3.4K Cr |
| 5 | DSP Floater Fund DSP | +5.09% | +7.93% | +6.58% | -0.56 | -0.5% | 0.46% | ₹409 Cr |
| 6 | HDFC Floating Rate Debt Fund HDFC | +5.98% | +7.87% | +6.83% | - | -0.5% | 0.27% | ₹16.6K Cr |
| 7 | SBI Floating Rate Debt Fund SBI | +6.15% | +7.81% | +6.68% | - | -0.6% | 0.28% | ₹716 Cr |
| 8 | BANDHAN FLOATER FUND Bandhan | +5.91% | +7.76% | +6.59% | -0.74 | -0.7% | 0.09% | ₹275 Cr |
| 9 | Nippon India Floater Fund Nippon India | +5.39% | +7.63% | +6.54% | -0.71 | -0.6% | 0.35% | ₹8.2K Cr |
| 10 | Tata Floating Rate Fund Tata | +5.80% | +7.58% | - | - | -0.6% | 0.31% | ₹129 Cr |
| 11 | Aditya Birla Sun Life Floating Rate Fund Aditya Birla Sun Life | +5.97% | +7.55% | +6.64% | - | -0.4% | 0.24% | ₹13.4K Cr |
| 12 | Aditya Birla Sun Life Floating Rate Fund - Retail Aditya Birla Sun Life | +5.76% | +7.32% | +6.41% | - | -0.4% | - | ₹46 Cr |
| 13 | UTI - Floater Fund UTI | +5.76% | +7.16% | +6.25% | - | -0.3% | 0.42% | ₹1.2K Cr |
Ranked by trailing return (3Y where available, else 1Y) on funds with at least one year of history. Returns, Sharpe, drawdown and TER are computed independently from AMFI NAVs - see methodology. No paid placement.
Frequently asked questions
How are Floater funds taxed?
As debt funds: for units bought on or after 1 April 2023, the entire gain is taxed at your income-tax slab rate regardless of holding period, with no indexation. Confirm with a tax professional.
How do floating-rate instruments reduce interest-rate risk?
Their coupons reset periodically with a reference rate, so income rises as rates rise - cushioning the price fall that hits fixed-coupon bonds. The protection is partial, not total, since funds mix floating and swapped fixed paper. FindMF shows realised volatility and drawdown from AMFI NAVs.
What expense ratio is reasonable, and how do I compare funds?
Direct-plan ratios commonly run around 0.20-0.60%. Because effective duration and credit quality differ, compare expense ratio with net trailing returns and volatility on FindMF, all from AMFI NAVs, rather than relying on the category label.
Does FindMF show alpha and beta for Floater funds?
Often not. The NIFTY Low Duration Debt benchmark is a composite debt index outside our ingested NSE equity feed, so benchmark-relative metrics may be flagged unavailable. Returns, volatility and drawdown are fully computed from AMFI NAVs.