Medium to Long Duration Funds
Last Updated on 11 May 2026
3 Year Average Returns
5.78%
Funds on Anand Rathi
45
Medium to Long Duration Funds to Invest in 2026
| Fund Name | |||
|---|---|---|---|
| UTI-Medium to Long Duration Fund (IDCW-A) | 1.83% | 5.71% | 7.99% |
| UTI-Medium to Long Duration Fund (IDCW-Q) | 1.83% | 5.71% | 7.99% |
| UTI-Medium to Long Duration Fund (Flexi) | 1.83% | 5.71% | 7.99% |
| UTI-Medium to Long Duration Fund (G) | 1.83% | 5.71% | 7.99% |
| UTI-Medium to Long Duration Fund (IDCW-H) | 1.83% | 5.71% | 7.73% |
| ICICI Pru Bond Fund - Regular (IDCW-Q) | 2.98% | 6.69% | 5.92% |
| ICICI Pru Bond Fund - Regular (G) | 2.98% | 6.69% | 5.75% |
| ICICI Pru Bond Fund - Regular (IDCW-H) | 2.98% | 6.69% | 5.75% |
| SBI Medium to Long Duration Fund-Reg (IDCW) | 2.60% | 6.11% | 5.54% |
| SBI Medium to Long Duration Fund-Reg Bonus Option | 2.60% | 6.11% | 5.54% |
| SBI Medium to Long Duration Fund-Reg (G) | 2.60% | 6.11% | 5.54% |
| SBI Medium to Long Duration Fund-Reg (IDCW-Q) | 2.60% | 6.11% | 5.54% |
| ICICI Pru Bond Fund - Regular (IDCW-M) | 2.98% | 6.35% | 5.38% |
| LIC MF Medium to Long Duration Fund-Reg (IDCW) | 2.55% | 6.17% | 5.27% |
| LIC MF Medium to Long Duration Fund-Reg (G) | 2.55% | 6.17% | 5.27% |
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What Are Medium To Long Duration Fund?
A medium to long duration fund is a type of debt mutual fund that invests in bonds and fixed-income instruments with an average portfolio duration of 4 to 7 years.
These funds primarily invest in Government securities, Corporate bonds, and Long-term fixed income papers, with maturity typically between 4 and 7 years.
These medium to long duration funds bridge the gap between medium-duration and long-duration funds, catering to investors' financial needs. This duration makes them more sensitive to interest rate movements compared to short duration funds, which means portfolio value can fluctuate more. But they also have the potential to deliver better yields when interest rates fall.
Top Features Of Medium To Long Duration Fund
Let's explore the top features of medium to long duration funds, compared to other options:
1. Interest Rate Sensitive
The prime feature of a medium to long duration fund is that it benefits when interest rates fall. Usually, bond prices and interest rates move in opposite directions. So if RBI cuts rates, these funds can generate capital appreciation.
2. Higher Potential Than Short-Term Debt Funds
Because they invest in longer maturity bonds, they may potentially offer higher yields than short duration fund or low duration funds. But remember, higher potential comes with higher volatility.
3. Suitable For 3–5+ Year Horizon
A medium to long duration fund makes sense when you can stay invested for at least 3–5 years or more. These are not parking funds. If you are investing for 6 months, it may not be a suitable option for you.
4. Diversified Bond Portfolio
Fund managers allocate across government securities and corporate bonds, depending on the interest rate outlook. So it's professionally managed. You don't have to pick bonds yourself.
How Does a Medium To Long Duration Fund Work?
With the pooled funds, the fund manager invests in bonds with maturities ranging from 4 to 7 years (as prescribed under SEBI guidelines). As interest rates fall, the bond prices rise with a similar hike in the fund's NAV value.
Returns in a medium to long duration fund primarily rely on: Interest income (coupon payments), Capital appreciation (when bond prices rise), and Portfolio rebalancing by a fund manager.
So, if your medium to long duration fund is holding bonds with longer maturity, their value may increase more sharply compared to short-term bonds. This creates capital appreciation in the NAV. But if interest rates rise further, the NAV may fall in the short term. That's why timing and holding period matter.
Who Should Invest In Medium To Long Duration Fund?
It is especially useful for moderate risk investors who don't want pure equity exposure but want smarter debt allocation. It can play a crucial role in planning for child's education, down payment planning, portfolio diversification beyond equity, or strategic allocation during the rate cycle.
- Have an investment horizon of 3–5 years or more
- Comfortable with moderate fluctuations
- Enough understanding of interest rate cycles
How To Invest In Medium To Long Duration Fund With Anand Rathi?
Planning To Invest In Medium To Long Duration Fund with us? Investing in a debt duration funds with Anand Rathi is – Simple, Smooth, and Fully Online. Just follow these easy steps:
Step 1: Create Or Log In To Your Account
Visit the Anand Rathi website or open the ARInvest app. Open your demat account if you're new, or simply log in if you already have one.
Step 2: Filter The Right Category
Go to the "Invest" section. Select Debt Funds → Medium To Long Duration Fund to explore available options.
Step 3: Choose Your Investment Mode
Decide how you want to invest: Lump Sum Investment (one-time investment) or SIP Investment (invest systematically at regular intervals). Choose what suits your cash flow and financial plan.
Step 4: Enter Investment Details
Mention the amount you want to invest. If selecting a SIP investment, choose your preferred frequency (monthly, quarterly, etc.).
Step 5: Confirm & Track
Review your details and confirm the transaction. Once invested, you can monitor your medium to long duration fund anytime through your dashboard.
Factors To Consider Before Investing In Medium To Long Duration Fund
Before investing in medium to long duration debt fund, pause and think on:
1. Interest Rate Outlook
Debt funds are more volatile to interest rates. If rates are expected to fall, medium to long duration fund can benefit. If rates may rise further, short-term volatility is possible.
2. Your Holding Period
For any investment, considering your holding period matters a lot. If you can stay invested for 3–5 years minimum, proceed with these funds. If not, avoid.
3. Credit Quality Of Portfolio
Check if the fund invests in high-quality bonds or takes credit risk for higher yields. Higher yield sometimes means higher risk.
4. Expense Ratio
Lower expense ratio can give better maturity value over the long term, so compare with other available funds.
5. Your Overall Asset Allocation
Avoid putting all debt allocation into one category. Medium to long duration fund should be part of a diversified debt strategy, not the only player.
Taxation Rules On Medium To Long Duration Fund
The tax rules for SEBI-listed Medium to long duration debt funds will depend on their purchase and redemption dates.
Bought Before April 1, 2023, but sold after July 23, 2024: LTCG (12.5% - without indexation), STCG (slab rate).
Bought On or after April 1, 2023: Taxed as STCG (Short term capital gains), irrespective of holding period - at the Individual's slab rate.
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