Debt Mutual Fund Rankings: What Changed in July 2026?
We refreshed our debt mutual fund rankings, while keeping our framework constant. Amid falling interest rates and continued volatility, our top ranked funds stayed broadly the same.
1. Key Takeaways & Observations
Since our last rankings in April 2026, the 10-year government bond yields have fallen by ~30bps after peaking around mid-May. However, uncertainty around the ongoing geo-political conflict continued to play throughout the quarter, easing off towards the end. RBI has kept the repo rates unchanged.
We continue to use the same scoring methodology as our previous iterations. While the market backdrop changed slightly, we have summarized how our top ranked funds behaved below:
Increase in Overall Scores: The post March recovery and falling government bond rates meant an overall improvement in performance of debt funds, resulting in an increase in average composite score from 2.823 in April 2026 to 2.943 in July 2026. The improvement was more prominent in categories where fund managers have freedom to play the interest rate cycles (with limited duration restrictions) like Banking & PSU, Corporate Bond, Dynamic Bond, etc.
One Notable Entry in Top 3: Franklin Corporate Bond Fund moved to the top of the category, from its 5th position in the April 2026 rankings. This was mainly driven by relative outperformance, improvement in the risk-reward metrics as well as the management tenure.
Broadly Stable Top 5: For most categories, the Top 5 funds were broadly unchanged (although their order changed internally). Some exceptions were:
Franklin India Bank & PSU Fund – Entered the ranking universe for the first time as it crossed our minimum AUM criteria, and now holds 2nd position in the category. The remaining Top 5 funds in this category were broadly the same.
Canara Robeco Liquid Fund – Entered the ranking universe for the first time as it crossed our minimum AUM criteria, and now holds 1st position in the category. The remaining Top 5 funds in this category were broadly the same.
Franklin India Overnight Fund – Moved up from 7th position to 5th position mainly due to outperformance.
Further, none of the top-5 positions in April 2026 have since dropped outside the top 10.
New Entrants: The current review cycle introduces 9 new fund entrants across categories and 1 reduction (due to AUM dropping below threshold). This means more funds fell within our minimum operating history and AUM criteria.
Throughout this blog, we cover the key changes in our rankings since April 2026. We talk about our debt ranking framework in greater detail here: Our Debt Mutual Fund Ranking Framework
2. Universe Overview
3. Top 3 Funds by Category – July 2026 vs April 2026
The table below presents the top 3 ranked funds in select categories as of the July 2026 review.
4. New Fund Entrants
Nine funds entered the ranking universe for the first time in the July 2026 cycle – as they fell within our AUM or minimum operational period criteria. One fund fell out of the rankings due to its AUM dropping below our minimum threshold.
If you want to see the detailed fund-level scores and category-by-category rankings, explore Creso's mutual fund ranking tool at creso.in, where the full July 2026 data is published alongside our methodology.
If you are looking for a platform that brings rankings, client management, and portfolio reporting into one place, take a look at what Creso offers for MFDs.
FAQs
Q: How often does Creso update its mutual fund rankings?
A: Rankings are updated quarterly. The most recent cycle compared April 2026 and July 2026 data across 178 debt mutual funds in 13 categories.
Q: Should I switch my clients out of funds that fell sharply in the rankings this quarter?
A: Not automatically. A single-quarter rank movement is one data point. Look at multi-quarter trends and assess whether the decline reflects a systematic issue (fund manager change, strategy drift) or a market-cycle response before acting. There are also tax, risk profile and other considerations that need to be kept in mind.
Disclaimer
The debt mutual fund rankings are based on a proprietary, rule-based methodology using data sourced from Morningstar and our predefined quantitative parameters. The rankings are intended solely for educational and informational purposes and should not be construed as investment advice, a recommendation, or an opinion on the suitability of any mutual fund scheme.
Mutual fund investments are subject to market risks, including the possible loss of principal. Past performance and ranking outcomes do not guarantee future results. The methodology does not account for individual investor objectives, risk tolerance, financial situation, or tax considerations.
Rankings are derived from historical data and may change over time due to market conditions, portfolio changes, or methodology updates. Investors and distributors are advised to exercise independent judgment, conduct their own analysis, and consult appropriate financial or tax advisors before making any investment decisions.
The use of fund rankings should be only one of several inputs in the investment decision-making process and not the sole basis for selection.
