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Best Corporate Bonds to Invest in 2023
Corporate bonds are an attractive investment option, offering investors the potential to earn high returns while diversifying their portfolios. Investing in corporate bonds can reduce the risk associated with equities and provide a steady income stream over time.
Nikhil Aggarwal, founder and CEO of Grip, says, “Corporate bonds are yet another opportunity for investors to generate attractive returns as these are secured and rated financial instruments, listed on the stock exchanges, and offer inflation-beating returns with lesser volatility, compared to equity markets."
Experts predict the corporate bond market will regain its potential in 2023 as the yield curve has initiated flattening by the end of 2022. With such an opportunity in the market, investors should learn more about corporate bonds and consider investing in some of the best options available.
Here we have listed the best corporate bonds to invest in during 2023 and what factors should be considered when making investment decisions.
Top Performing Corporate Bonds In 2023
1. ICICI Prudential Corporate Bond Fund
ICICI Prudential Corporate Bond Fund is an open-ended income fund suitable for investors looking to achieve goals like regular income and short-term savings. Since the bond fund invests in companies with AA+ ratings or higher, they do not experience the equity market's volatility.
| Yield to Maturity (YTM) | 7.9% |
| Listed/Unlisted | Listed |
5 Years Growth Trends for Investment of INR 10,000
| 23 Feb 2022 | INR 10,538 |
| 23 Feb 2021 | INR 11,060 |
| 20 Feb 2020 | INR 12,034 |
| 23 Feb 2018 | INR 14,290 |
| Since Inception | INR 22,240 |
2. SBI Corporate Bond Fund Direct Growth
SBI Corporate Bond Fund Direct Growth is an open-ended scheme that helps investors maintain moderate liquidity in their portfolio. It predominantly invests in high-quality corporate bonds rated AA+ and above to minimise credit risk.
| Yield to Maturity (YTM) | 7.78% |
| Listed/Unlisted | Listed |
3 Years Growth Trends for Investment of INR 10,000
| 24 Feb 2022 | INR 10,375 |
| 24 Feb 2021 | INR 10,885 |
| 24 Feb 2020 | INR 11,743 |
| Since Inception | INR 13,204 |
3. Aditya Birla Sun Life Corporate Bond Fund
Aditya Birla Sun Life Corporate Bond Fund is an open-ended debt fund. It aims at generating long-term capital growth by investing 100% of the fund’s corpus in a debt and equity-based diversified portfolio. The scheme is ideal for investors with a long-term investment horizon.
| Yield to Maturity (YTM) | 7.78% |
| Listed/Unlisted | Listed |
5 Years Growth Trends for Investment of INR 10,000
| 24 Feb 2022 | INR 10,454 |
| 24 Feb 2021 | INR 11,019 |
| 24 Feb 2020 | INR 12,053 |
| 23 Feb 2018 | INR 14,353 |
| Since Inception | INR 22,279 |
4. Kotak Corporate Bond Fund Standard
The Kotak Corporate Bond Fund Standard seeks to generate income and capital appreciation in the short-term. The debt bond invests largely in corporate debt securities. It is moderately low risk as the corpus is invested in corporate bonds with AA+ and higher ratings.
| Yield to Maturity (YTM) | 7.87% |
| Listed/Unlisted | Listed |
5 Years Growth Trends for Investment of INR 10,000
| 24 Feb 2022 | INR 10,411 |
| 24 Feb 2021 | INR 10,973 |
| 24 Feb 2020 | INR 11,804 |
| 23 Feb 2018 | INR 14,088 |
| Since Inception | INR 21,725 |
5. Nippon India Prime Debt Fund
A moderately low risk debt instrument, Nippon India Prime Debt Fund has a primary objective to generate income through debt investments. The scheme is ideal for investing money for a long duration. It is suitable for investors looking for less riskier assets compared to equity funds.
| Yield to Maturity (YTM) | 7.77% |
| Listed/Unlisted | Listed |
5 Years Growth Trends for Investment of INR 10,000
| 24 Feb 2022 | INR 10,466 |
| 24 Feb 2021 | INR 11,099 |
| 24 Feb 2020 | INR 11,958 |
| 23 Feb 2018 | INR 14,037 |
| Since Inception | INR 21,625 |
6. HDFC Corporate Bond Fund
The HDFC Corporate Bond Fund scheme aims to generate capital growth in the long-term. It is a moderately-low risk bond fund investing predominantly in AA+ and above-rated companies.
| Yield to Maturity (YTM) | 7.66% |
| Listed/Unlisted | Listed |
5 Years Growth Trends for Investment of INR 10,000
| 24 Feb 2022 | INR 10,390 |
| 24 Feb 2021 | INR 10,971 |
| 24 Feb 2020 | INR 11,934 |
| 23 Feb 2018 | INR 14,285 |
| Since Inception | INR 21,993 |
7. Sundaram Corporate Bond Fund
The Sundaram Corporate Bond Fund scheme is suitable for investors seeking stable returns. It is a moderately risky bond fund that offers capital gains over a medium to long-term investment horizon.
| Yield to Maturity (YTM) | 7.29% |
| Listed/Unlisted | Listed |
5 Years Growth Trends for Investment of INR 10,000
| 24 Feb 2022 | INR 10,395 |
| 24 Feb 2021 | INR 10,897 |
| 24 Feb 2020 | INR 11,766 |
| 23 Feb 2018 | INR 14,052 |
| Since Inception | INR 33,757 |
8. Canara Robeco Corporate Bond Fund
Canara Robeco Corporate Bond Fund is a moderate-risk bond fund launched quite recently. It offers capital appreciation for investors looking for stable returns within a medium investment duration of 1 year or more.
| Yield to Maturity (YTM) | 7.45% |
| Listed/Unlisted | Listed |
5 Years Growth Trends for Investment of INR 10,000
| 24 Feb 2022 | INR 10,367 |
| 24 Feb 2021 | INR 10,872 |
| 24 Feb 2020 | INR 11,690 |
| 23 Feb 2018 | INR 13,870 |
| Since Inception | INR 19,492 |
9. InCred Financial Services Ltd Senior Secured Bond
InCred Financial Services Ltd Senior Secured Bond is an A+ rated fixed income bond offering stable returns. It is a capital-protected bond issued by InCred Financial Services Ltd. The issuer is backed by renowned investors and institutions.
| Yield to Maturity (YTM) | 10% |
| Listed/Unlisted | Listed |
10. Five Star Business Finance Limited Senior Secured Bond
Five Star Business Finance Limited is a senior secured bond issued by the collateralized business loans provider Five Star. It is an A+ rated bond that assures stable returns owing to the demonstrated financial competence of the issuer.
| Yield to Maturity (YTM) | 8.4% |
| Listed/Unlisted | Listed |
Conclusion
Corporate bonds are low-risk investments that offer investors a fixed return with a guarantee to pay back the investor at a predetermined interest rate and maturity date. They are considered safe investments because they offer protection against inflation, lack of liquidity in stock markets, and credit risk associated with individual stocks. These factors make corporate bonds attractive options for conservative investors who want to maintain their capital while earning steady returns over time.
Furthermore, investing in corporate bonds can provide important diversification benefits as part of an overall portfolio strategy. The stability offered by these investments protects against fluctuations in other assets within the portfolio, such as stocks or commodities.
Grip provides an easy-to-use digital platform for investing in corporate bonds. It offers an array of investment opportunities from various issuers offering attractive returns. Moreover, it simplifies the investment process to save valuable time while helping investors get the most out of their investments.
Frequently Asked Questions
- Which bonds to invest in 2023?
Investors must consider the expected return on their investment and the risks associated with a bond before investing. Fixed-income investments such as corporate bonds and government securities offer varying levels of security, returns, and liquidity. Investors’ choice of bonds should depend on their risk appetite and financial goals. However, corporate bonds are a great option for earning a stable income by taking moderate to low levels of risk.
- Where to invest in 2023?
With the global economy continuing to experience uncertainty, it is important for investors to make informed decisions about where to put their hard-earned money. From stocks and bonds to mutual funds, real estate investments, and digital assets like cryptocurrency, you can pick any instrument based on your financial goals and risk appetite. Corporate bonds are a great option if you are looking for assured returns with minimal to moderate risk on your investments.
- Which corporate bonds are best to buy?
The best corporate bonds to buy depend on the investor's individual goals and risk tolerance. For low-risk investments, high-rated bonds with good credit ratings are the best. While for higher returns, investing in lower-rated debt instruments may be more suitable though the risk is higher.
