ICICI Prudential Floating Interest Fund has outperformed peers in the floating-rate mutual fund category with a 6.2% one-year return as of June 24, 2026. While the fund leads in this timeframe, performance across three-year periods and shorter terms varies among competitors like HDFC and Aditya Birla Sun Life. Investors should evaluate fund consistency and benchmark tracking beyond short-term gains.
What Happened
ICICI Prudential Floating Interest Fund has recorded the highest returns in the floating-rate mutual fund category over the past year. According to data compiled by ACE MF up to June 24, 2026, the fund delivered a 6.2% compound annual growth rate (CAGR). This performance places it slightly ahead of key competitors, with HDFC Floating Rate Debt Fund reporting a 6.0% return and Aditya Birla SL Floating Rate Fund at 5.9% for the same period. The data considered funds with assets under management (AUM) exceeding Rs 1,500 crore.
Comparing The Leaders
While ICICI Prudential Floating Interest Fund leads the one-year return charts, the competitive landscape changes when looking at fund size. HDFC Floating Rate Debt Fund holds the largest corpus among the top five funds in this group, managing Rs 16,405.2 crore. For investors, size often indicates liquidity and the fund manager's ability to deploy large amounts of capital across various instruments. However, size does not always guarantee the highest short-term returns, as seen in the ranking differences between the one-year and one-month performance data.
Short-Term Versus Long-Term Trends
Performance in debt funds can fluctuate significantly depending on the time horizon. While ICICI Prudential Floating Interest Fund showed strength with a 1.5% return over one month, the rankings shift when looking at different durations. For instance, HDFC Floating Rate Debt Fund recorded the highest returns over the three-month period at 2.0%.
Looking at a longer horizon, the three-year performance data presents a different picture. Both HDFC Floating Rate Debt Fund and Kotak Floating Rate Fund achieved a 7.6% CAGR over the three-year period. ICICI Prudential Floating Interest Fund also posted a 7.6% return, while Aditya Birla SL Floating Rate Fund and UTI Floater Fund recorded 7.3% and 6.7% respectively. These variations highlight why relying on a single timeframe can be misleading.
Why Benchmark Performance Matters
Evaluating how a fund performs against its specific benchmark is essential. ICICI Prudential Floating Interest Fund demonstrated its ability to add value beyond its benchmark, outperforming it by 2.0 percentage points over the one-year period. In the three-year period, it continued to stay ahead of its benchmark by 1.2 percentage points. Such data points suggest that the fund management team has been effective in navigating market conditions, but investors should verify if this trend is consistent across different market cycles.
What Investors Should Track Next
Investors analyzing floating-rate funds should look beyond just the annual returns. The key monitorable is consistency—how the fund performs across different market phases rather than just one year of outperformance. Additionally, tracking the expense ratio is important, as it directly impacts the returns received by investors. Finally, understanding the credit quality of the instruments held by these funds is vital to assess the risk, as floating-rate funds invest in debt papers where interest rates are reset periodically based on market benchmarks.