SBI Dynamic Bond Fund

The Fund portfolio includes 27.36% investment in sovereign GOI bonds, 62.69% in cash and cash equivalents and the balance in corporate debt securities issued by various companies. The target of the Fund is to provide attractive returns to investors through an aggressive investment strategy. The Fund managers manage the portfolio actively by investing in top-grade debt securities with varying maturities.

SBI Dynamic Bond Fund is available in the form of 4 Schemes as follows:

• Growth - Direct
• IDCW as and when - Direct
• Growth - Regular
• IDCW as and when - Regular

Direct plans are when investors have direct access to the Fund House to purchase mutual fund units. Regular plans are those in which investors purchase mutual fund units through the distributor network. 

Investment Details

Fund Summary

1. SBI Dynamic Bond Fund Direct Plan-Growth

   • Risk level-Average
   • NAV-Rs. 29.4594 as of 24.05.2021
   • Expense Ratio-0.87%
   • Fund Started-01.01.2013

2. SBI Dynamic Bond Fund Direct Plan IDCW 

   • Risk level-Average
   • NAV-Rs. 16.4549 as of 24.05.2021
   • Expense Ratio-0.87%
   • Fund Started-01.01.2013

3. SBI Dynamic Bond Fund Regular Plan-Growth

   • Risk level-Average
   • NAV-Rs. 27.8160 as of 24.05.2021
   • Expense Ratio-1.64%
   • Fund Started-09.02.2004

4. SBI Dynamic Bond Fund Regular Plan IDCW 

   • Risk level-Average
   • NAV-Rs. 14.5826 as of 24.05.2021
   • Expense Ratio-1.64%
   • Fund Started-09.02.2004

   Fund Manager

   • Mr Dinesh Ahuja (since January 2011)

Fund Returns Summary

SBI Dynamic Bond Fund Direct Plan-Growth - Returns Summary

SBI Dynamic Bond Fund Direct Plan IDCW Quarterly - Returns Summary

SBI Dynamic Bond Fund Regular Plan-Growth - Returns Summary

SBI Dynamic Bond Fund Regular Plan IDCW Quarterly - Returns Summary

Summative Pros and Cons Table

Benefits of SBI Dynamic Bond Fund

Investment in SBI Dynamic Bond Fund provides the following advantages to the investors.

1. Dynamic Investment Allocation

    Dynamic bond funds have the freedom to invest in debt securities across both short duration and long duration securities without any restrictions. When interest rates are falling, these funds can invest in long-duration securities and invest in short duration securities when interest rates are rising. Unlike other debt funds, they don’t need to follow any rigid investment mandates, and their flexible investment allocation assists them in benefitting from interest rate movements. 

2. Positive Track Record

    SBI Mutual Fund has a proven track record of delivering value to its investors over 30 years. The experienced debt fund managers of SBI Mutual Fund have been investing in rated papers of sovereign and corporates with a robust background, clean management quality and sound business and financial strength.

3. Indexation Benefit

   To attain optimum benefits, it is advisable to invest in dynamic bond funds for the tenure of 3-5 years. By investing for more than three years, one can take advantage of the indexation benefit available under income tax laws. The gains from the sale of dynamic bond funds are taxed at 20% after the indexation benefit. Investors paying tax at the highest tax rate and wanting to invest in debt instruments will benefit from this aspect.

Who Should Invest in SBI Dynamic Bond Fund?

While SBI Dynamic Bond Fund is ideal for an investment horizon of 3-5 years, such funds don't suit all investors. This Fund is not meant for investors who wish to earn fixed returns with low volatility. A dynamic bond fund’s return depends on interest rate movements, and they carry moderately high levels of risk. Funds such as SBI Dynamic Bond Fund are suitable for investors who wish to invest in the bond market but are not competent to make any decisions on interest rate movements. 

Conservative investors, who are loathed to witnessing volatile price movements, are advised to stay away from dynamic bond funds. Although Dynamic Bond funds do not have restrictions on the duration and credit quality of securities, they have to withstand interest rate risk and credit risk. Hence, the broad portfolio of the Dynamic Bond fund may impact the Fund's performance when the interest rates move against the fund manager’s forecast. Only investors who have sufficient money to withstand the inherent risk in these funds may look at investing in them for 3-5 year tenure.

Conclusion

Before investing, it is essential to study the past performance of the Fund. SBI Dynamic Bond Fund’s annualized returns for the last five years have been better than the NIFTY Composite Debt Index benchmark. Investors with a target investment period of 3-5 years in debt instruments may consider investing in SBI Dynamic Bond Fund.

FAQ's