Should you invest in a debt index fund? + List of debt index funds in India Nov 2025

Published on / By M. Pattabiraman Twitter: @pattufreefincal

Published: November 2, 2025 at 6:00 am

We discuss whether you should invest in a debt index fund and also list debt index funds in India as of November 2025. There are two types of debt-based passive funds in India. (1) Target Maturity Funds, which would buy and hold an index portfolio and hold it until maturity, thereby reducing interest rate risk at the time of withdrawal. The credit risk in funds is also relatively low as they typically invest in gilts and state development loans. For more information, refer to FAQ: Target Maturity Debt Mutual Funds. After maturity, many of these funds are likley to become open-ended index funds.

(2) There are also open-ended passive debts – mostly ETFs, and some index funds.

But first, let us ask, should we invest in debt index funds? The answer depends on your needs.

If you are looking to add a passive debt fund to your long-term folio, then do you truly understand what it is to hold a long-term bond fund in your portfolio, especially a gilt fund? Are you ready to face years of poor returns? See: FAQ on gilt mutual funds: essentials investors should know.

Assuming you are a risk-aware investor, we recommend an index fund rather than an ETF, as ETFs can experience price deviations when not actively traded or during a market crisis.

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Typically, long-term bonds are used in a long-term portfolio, but the only index fund option is the newly launched JioBlackRock Nifty 8-13 yr G-Sec Index Fund.

Even though there is some fund manager risk in an actively managed gilt fund, I would prefer that to a long-term gilt index fund. In an active fund, the fund manager would adjust the portfolio’s average maturity in response to market demand and supply (which depend on the interest rate outlook). This will help with returns as interest rates keep rising or are about to rise.

General thumbrule: When interest rates keep increasing, the fund manager will buy longer duration bonds (average portfolio maturity increases). These will provide greater interest and greater capital gains if rates fall. When interest rates start falling, the average portfolio maturity decreases. This will reduce losses if the rates increase. For more details, see How to choose a gilt mutual fund.

If you “must” invest only in a passive debt fund, then choose Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund. This invests in bonds of 1-5 year durations. The volatility and drawdown will be lower, but it may not outperform a long-term gilt fund.

Since debt funds are taxed according to the slab, there is little incentive to take on market risk for short- or even medium-term goals. A simple RD or FD from a stable bank (not one that offers high rates to increase its market share) will get the job done.

List of debt index funds in India

When I compiled this list in September 2023, there was only one fund  – Edelweiss Short Duration Index Fund. Now we have a few more. They are listed in order of increasing average maturity.

  1. Aditya Birla SL CRISIL-IBX Financial Services 3 to 6 Months Debt Index Fund
  2. Axis CRISIL-IBX Financial Services 3-6 Months Debt Index Fund
  3. Bandhan CRISIL-IBX Financial Services 3-6 Months Debt Index Fund
  4. HDFC CRISIL-IBX Financial Services 3-6 Months Debt Index Fund
  5. ICICI Pru CRISIL-IBX Financial Services 3-6 Months Debt Index Fund
  6. Kotak CRISIL-IBX Financial Services 3-6 Months Debt Index Fund
  7. Aditya Birla SL CRISIL-IBX Financial Services 9-12 Months Debt Index Fund
  8. Kotak CRISIL-IBX Financial Services 9 to 12 Months Debt Index Fund
  9. Mirae Asset CRISIL-IBX Financial Services 9-12 Months Debt Index Fund
  10. Edelweiss CRISIL IBX 50:50 Gilt Plus SDL Short Duration Index Fund
  11. JioBlackRock Nifty 8-13 yr G-Sec Index Fund

List of debt ETFs in India

The target maturity ETFs are marked in bold.

  1. Aditya Birla SL CRISIL 10 Year Gilt ETF
  2. Aditya Birla SL CRISIL Broad-Based Gilt ETF
  3. Aditya Birla SL CRISIL Liquid Overnight ETF
  4. Aditya Birla SL Nifty G-Sec Jun 2027 ETF
  5. Angel One Nifty 1D Rate Liquid ETF(G)
  6. Axis Nifty AAA Bond Plus SDL Apr 2026 50:50 ETF
  7. Bajaj Finserv Nifty 1D Rate Liquid ETF(G)
  8. BHARAT Bond ETF – April 2030
  9. BHARAT Bond ETF – April 2031
  10. BHARAT Bond ETF – April 2032
  11. BHARAT Bond ETF – April 2033
  12. DSP BSE Liquid Rate ETF
  13. DSP NIFTY 1D Rate Liquid ETF
  14. Groww Nifty 1D Rate Liquid ETF
  15. HDFC Nifty 1D Rate Liquid ETF(G)
  16. ICICI Pru BSE Liquid Rate ETF(G)
  17. ICICI Pru BSE Liquid Rate ETF(IDCW)
  18. ICICI Pru Nifty 10 yr Benchmark G-Sec ETF
  19. ICICI Pru Nifty 5 yr Benchmark G-SEC ETF
  20. Kotak Nifty 1D Rate Liquid ETF
  21. LIC MF Nifty 8-13 yr G-Sec ETF
  22. Mirae Asset Nifty 1D Rate Liquid ETF(G)
  23. Mirae Asset Nifty 1D Rate Liquid ETF(IDCW)
  24. Mirae Asset Nifty 8-13 yr G-Sec ETF
  25. Motilal Oswal Nifty 5 Year Benchmark G-Sec ETF
  26. Nippon India ETF Nifty 1D Rate Liquid BeES
  27. Nippon India ETF Nifty 5 yr Benchmark G-Sec
  28. Nippon India ETF Nifty 8-13 yr G-Sec Long Term Gilt
  29. Nippon India ETF Nifty SDL Apr 2026 Top 20 Equal Weight
  30. Nippon India Nifty 1D Rate Liquid ETF(G)
  31. SBI Nifty 10 yr Benchmark G-Sec ETF
  32. SBI NIFTY 1D Rate Liquid ETF(G)
  33. SBI Nifty 1D Rate Liquid ETF(IDCW)
  34. Shriram Nifty 1D Rate Liquid ETF
  35. UTI Nifty 10 yr Benchmark G-Sec ETF
  36. UTI Nifty 5 yr Benchmark G-Sec ETF
  37. Zerodha Nifty 1D Rate Liquid ETF
  38. Zerodha Nifty 8-13 Yr G-Sec ETF

List of target maturity debt index funds in India

This is a big list of 90 funds. So it is best accessed via this text link.