Medium Duration Mutual Funds in India
Updated June 2026 · 28 active funds · data from AMFI NAVs
Medium Duration funds run a portfolio Macaulay duration of 3 to 4 years under SEBI's rules. They invest across corporate bonds, government securities and money-market instruments to hold that band, taking on noticeably more interest-rate risk than short-duration categories in pursuit of higher yield. Credit quality is not restricted, so several funds in this space have historically reached for yield via lower-rated paper, meaning credit risk can be material alongside duration risk. The natural role is a three-to-four-year horizon for investors comfortable with meaningful NAV movement in exchange for higher expected return than short-duration funds. They suit a medium-term debt allocation when you have conviction on the rate cycle or simply want more carry, but they are more volatile and more exposed to both rate shifts and credit events. The default benchmark on FindMF is the NIFTY Medium Duration Debt Index. We compute trailing returns and risk metrics for all 28 Medium Duration funds from AMFI-published daily NAVs using a disclosed methodology, so you can weigh extra yield against the realised volatility, drawdown and downside each fund has shown.
Who it suits: Investors with a three-to-four-year horizon who accept higher rate and credit risk for more yield than short-duration funds.
86% of the 14 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 | Aditya Birla Sun Life Medium Term Aditya Birla Sun Life | +8.62% | +10.43% | +12.59% | 0.69 | -1.0% | 0.81% | ₹3.0K Cr |
| 2 | Kotak Medium Term Fund Kotak Mahindra | +6.81% | +8.75% | +7.39% | 0.08 | -1.5% | 0.67% | ₹2.0K Cr |
| 3 | Nippon India Medium Duration Fund Nippon India | +8.07% | +8.26% | +9.48% | 0.33 | -1.6% | 0.50% | ₹139 Cr |
| 4 | ICICI Prudential Medium Term Bond Fund ICICI Prudential | +6.88% | +8.26% | +7.27% | 0.02 | -1.2% | 0.73% | ₹5.7K Cr |
| 5 | Axis Strategic Bond Fund Axis | +6.27% | +8.22% | +7.29% | 0.01 | -1.2% | 0.71% | ₹2.1K Cr |
| 6 | HSBC Medium Duration Fund HSBC | +5.39% | +7.84% | - | 0.38 | -0.6% | 0.41% | ₹760 Cr |
| 7 | HDFC Medium Term Debt Fund HDFC | +5.91% | +7.73% | +6.72% | -0.29 | -1.9% | 0.69% | ₹3.8K Cr |
| 8 | SBI MEDIUM DURATION FUND SBI | +5.65% | +7.57% | +6.70% | -0.39 | -1.7% | 0.72% | ₹6.8K Cr |
| 9 | DSP Bond Fund DSP | +4.48% | +7.25% | +6.14% | -0.68 | -1.8% | 0.76% | ₹309 Cr |
| 10 | Bandhan Medium Duration Fund Bandhan | +4.96% | +7.17% | +5.87% | -0.72 | -3.2% | 0.70% | ₹1.4K Cr |
| 11 | Invesco India Medium Duration Fund Invesco | +4.29% | +7.08% | - | -0.66 | -2.3% | 0.38% | ₹174 Cr |
| 12 | UTI Medium Duration Fund UTI | +4.45% | +6.94% | +6.64% | -0.32 | -1.7% | 0.84% | ₹39 Cr |
| 13 | Sundaram Medium Duration Fund (Formerly Known as Sundaram Medium Term Bond Fund) Sundaram | +3.51% | +5.96% | +4.89% | -1.32 | -2.5% | 1.17% | ₹35 Cr |
| 14 | Sundaram Medium Duration Fund (Formerly Known as Sundaram Medium Term Bond Fund) Institutional Sundaram | +6.47% | +4.17% | - | -1.95 | -2.6% | 1.17% | - |
| 15 | Tata Medium Term Fund Tata | +2.59% | - | - | -1.41 | -2.0% | - | - |
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 Medium Duration 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.
Why are Medium Duration funds sometimes seen as higher-risk than the name suggests?
Two reasons: a 3-4 year duration means meaningful sensitivity to rate moves, and the category does not cap credit quality, so some funds hold lower-rated bonds. Both rate shocks and credit events have hit funds here historically. Review credit quality and check FindMF's drawdown figures.
What expense ratio is reasonable, and how do I compare funds?
Direct-plan ratios often run around 0.50-1.00%. With varied credit and duration strategies, compare expense ratio alongside net trailing returns, volatility and max drawdown on FindMF, all from AMFI NAVs.
Who should avoid this category?
Investors needing stable capital over short horizons, or those uncomfortable with credit risk, may prefer short-duration, money-market or liquid funds. FindMF's volatility and downside metrics, from AMFI NAVs, make the trade-off explicit.