CRISIL Short-Term Bond Fund Index

The CRISIL Short-Term Bond Fund Index is a fixed income benchmark published by CRISIL Research (a division of CRISIL Limited, majority-owned by S&P Global) that represents the performance of a blended portfolio of government securities and investment-grade corporate bonds with residual maturities broadly in the 1-3 year range. It serves as the standard benchmark for SEBI-categorised short-duration debt mutual fund schemes, which are required to maintain a Macaulay duration of 1-3 years.

Publisher

CRISIL Limited, established in 1987, is India’s premier credit rating and analytical services company. CRISIL Research administers the CRISIL fixed income index family, including this index and related benchmarks such as the CRISIL Liquid Fund Index, the CRISIL Ultra Short-Term Bond Fund Index, and the CRISIL Composite Bond Fund Index.

Composition and methodology

The CRISIL Short-Term Bond Fund Index blends government securities and AAA/AA+ rated corporate bonds, calibrated to reflect short-duration fund portfolios:

Methodology features:

• Index type: total return (price + accrual), computed daily.
• Eligible securities: investment-grade instruments with residual maturity of 1-3 years; minimum outstanding amount thresholds apply.
• Valuation: FIMMDA/NDS-OM prices for G-secs; matrix pricing for corporate bonds.
• Rebalancing: monthly, to roll securities out as they approach the minimum maturity threshold and add new securities entering the 1-3 year window.
• Modified duration: typically 1.5-2.5 years.

Interest rate sensitivity

With a modified duration of approximately 1.5-2.5 years, the CRISIL Short-Term Bond Fund Index occupies a middle ground between:

• The CRISIL Liquid Fund Index (duration ~0.1 years; minimal rate risk), and
• The CRISIL Composite Bond Fund Index (duration 3-7 years; significant rate risk).

A 100 basis point rise in yields reduces the short-term bond index by approximately 1.5-2.5%, making it a moderate interest rate risk benchmark. Investors in short-duration funds accept some rate risk in exchange for higher carry income compared with liquid or ultra short-term funds.

Historical returns

Returns exceed liquid fund returns in most periods due to: (a) higher carry from 1-3 year corporate bonds over overnight rates, and (b) capital gains when yields fall. In periods of sharp yield rises (2013, 2022), returns can compress to near zero or turn slightly negative over short periods.

Mutual fund schemes

The CRISIL Short-Term Bond Fund Index is the primary benchmark for:

• Short duration funds: SEBI-defined category with Macaulay duration 1-3 years. Examples: HDFC Short Term Debt Fund, ICICI Prudential Short Term Fund, Kotak Bond Short Term Fund.
• Floater funds (partial benchmark): some floating rate funds use this as a secondary benchmark.
• Banking and PSU debt funds: funds investing predominantly in AA and above bank and PSU bonds; some use short-term bond indices.

See also

• CRISIL Liquid Fund Index
• CRISIL Ultra Short-Term Bond Fund Index
• CRISIL Composite Bond Fund Index
• NIFTY 5-Year G-Sec Index
• Mutual fund

References

1. CRISIL Research. “CRISIL Fixed Income Indices Methodology.” crisil.com. Accessed 2026.
2. SEBI. Circular SEBI/HO/IMD/DF3/CIR/P/2017/114 on mutual fund categorisation.
3. SEBI. Circular SEBI/HO/IMD/DF3/CIR/P/2018/04 on TRI benchmarks.
4. AMFI. “Benchmark mapping for debt categories.” amfiindia.com. 2025.