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6 Best Liquid Mutual Funds 2020
In common terms, Best Liquid Funds are Debt Mutual Funds or rather money market Mutual Funds with the only difference being in the investment duration. Liquid Funds invest in very short money market instruments like the Certificate of Deposit, treasury bills, commercial papers etc.
The investment duration of these funds is very short, generally ranging from a couple of days to a few weeks (it can even be one day!). The average residual maturity of liquid funds is less than 91 days as they invest in securities which individually have a maturity upto 91 days. Being a short-term Debt fund, these funds are highly suitable for investors looking for low-risk investments for short duration.
The low maturity period of best liquid funds helps fund managers to fulfil the redemption demand of investors easily. In the market, there are various liquid fund investments available.
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Why Invest in Liquid Funds?
- Liquid funds have no lock-in or very low lock-in period.
- The interest rate of liquid mutual funds is the lowest among all short-term investments due to low maturity period.
- No entry and exit loads are applicable.
- Liquid funds are a perfect solution for investors who wish to park their idle cash for a short duration without the risk of Capital Loss.
Liquid Funds better than Saving Bank Account?
Investing in liquid funds are any day a better option on investment as compared to putting money in popular saving bank account schemes.
Owing to its familiarity and institutionalized nature of saving bank accounts, an average Indian taxpayer has more trust in them. However, it seems they are not the most popular short-term investment anymore. This is due to the rising acceptance of mutual funds by investors with different investment goals. Your hard earned money that lies in a savings bank account fetches you only 3.5% interest per annum. However, the best liquid funds have returned as high as 6.5-7.5% on an average in the past 1 year period, on an annualized basis.
So, on returns alone, liquid funds score over a savings bank account. If you have a raise or a bonus coming your way, invest in liquid funds and party later.
6 Best Liquid Funds India FY 20 - 21
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 2018 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Nippon India Liquid Fund Growth ₹4,772.81
↑ 0.66 ₹24,235 0.4 1.3 2.8 6.5 6.7 5.38% 1M 12D 1M 15D Aditya Birla Sun Life Liquid Fund Growth ₹314.393
↑ 0.04 ₹40,854 0.4 1.3 2.8 6.5 6.7 5.42% 1M 17D 1M 17D Axis Liquid Fund Growth ₹2,170.04
↑ 0.30 ₹29,119 0.4 1.3 2.8 6.5 6.6 5.29% 1M 27D 2M 1D ICICI Prudential Liquid Fund Growth ₹289.352
↑ 0.04 ₹55,665 0.4 1.3 2.8 6.4 6.6 5.32% 1M 16D 1M 18D Tata Liquid Fund Growth ₹3,078.57
↑ 0.43 ₹18,477 0.4 1.3 2.8 6.4 6.6 5.34% 1M 13D 1M 13D UTI Liquid Cash Plan Growth ₹3,204.67
↑ 0.87 ₹30,477 0.4 1.3 2.8 6.5 6.6 5.31% 1M 10D 1M 13D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Jan 20 Liquid funds having AUM/Net Assets above 10,000 Crore and managing funds for 5 or more years.
(Erstwhile Reliance Liquid Fund - Treasury Plan) The investment objective of the scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments. Nippon India Liquid Fund is a Debt - Liquid Fund fund was launched on 9 Dec 03. It is a fund with Low risk and has given a Below is the key information for Nippon India Liquid Fund Returns up to 1 year are on (Erstwhile Aditya Birla Sun Life Cash Plus Fund) An Open-ended liquid scheme with the objective to provide reasonable returns at a high level of safety and liquidity through judicious investments in high quality debt and money market instruments. Aditya Birla Sun Life Liquid Fund is a Debt - Liquid Fund fund was launched on 30 Mar 04. It is a fund with Low risk and has given a Below is the key information for Aditya Birla Sun Life Liquid Fund Returns up to 1 year are on To provide a high level of liquidity with reasonable returns commensurating with low risk through a portfolio of money market and debt securities. However there can be no assurance that the investment objective of the scheme will be achieved. Axis Liquid Fund is a Debt - Liquid Fund fund was launched on 9 Oct 09. It is a fund with Low risk and has given a Below is the key information for Axis Liquid Fund Returns up to 1 year are on (Erstwhile ICICI Prudential Liquid Plan) To provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through investments made primarily in money market and debt securities. ICICI Prudential Liquid Fund is a Debt - Liquid Fund fund was launched on 17 Nov 05. It is a fund with Low risk and has given a Below is the key information for ICICI Prudential Liquid Fund Returns up to 1 year are on (Erstwhile TATA Money Market Fund ) To create a highly liquid portfolio of money market instruments so as to provide reasonable returns and high liquidity to the unitholders. Tata Liquid Fund is a Debt - Liquid Fund fund was launched on 1 Sep 04. It is a fund with Low risk and has given a Below is the key information for Tata Liquid Fund Returns up to 1 year are on The investment objective of the scheme is to generate steady and reasonable income, with low risk and high level of liquidity from a portfolio of money market securities and high quality debt. UTI Liquid Cash Plan is a Debt - Liquid Fund fund was launched on 11 Dec 03. It is a fund with Low risk and has given a Below is the key information for UTI Liquid Cash Plan Returns up to 1 year are on 1. Nippon India Liquid Fund
CAGR/Annualized return of 7.4% since its launch. Ranked 11 in Liquid Fund category. Return for 2019 was 6.7% , 2018 was 7.4% and 2017 was 6.7% . Nippon India Liquid Fund
Growth Launch Date 9 Dec 03 NAV (24 Jan 20) ₹4,772.81 ↑ 0.66 (0.01 %) Net Assets (Cr) ₹24,235 on 31 Dec 19 Category Debt - Liquid Fund AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Low Expense Ratio 0.21 Sharpe Ratio 15.17 Information Ratio -0.96 Alpha Ratio 0.5 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 5.38% Effective Maturity 1 Month 15 Days Modified Duration 1 Month 12 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 14 ₹10,000 31 Dec 15 ₹10,834 31 Dec 16 ₹11,663 31 Dec 17 ₹12,444 31 Dec 18 ₹13,370 31 Dec 19 ₹14,266 Returns for Nippon India Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.8% 1 Year 6.5% 3 Year 6.9% 5 Year 7.3% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.7% 2017 7.4% 2016 6.7% 2015 7.7% 2014 8.3% 2013 9.1% 2012 9.2% 2011 9.7% 2010 8.9% 2009 5.3% Fund Manager information for Nippon India Liquid Fund
Name Since Tenure Anju Chhajer 1 Oct 13 6 Yr. Kinjal Desai 25 May 18 1.35 Yr. Data below for Nippon India Liquid Fund as on 31 Dec 19
Asset Allocation
Asset Class Value Cash 99.96% Other 0.04% Debt Sector Allocation
Sector Value Cash Equivalent 52.28% Corporate 44.72% Government 2.96% Credit Quality
Rating Value AAA 96.47% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reverse Repo
CBLO/Reverse Repo | -8% ₹2,786 Cr 6.35% Govt Stock 2020
Sovereign Bonds | -8% ₹2,527 Cr 252,500,000
↑ 177,500,000 91 DTB 06022020
Sovereign Bonds | -7% ₹2,275 Cr 229,500,000
↑ 229,500,000 91 DTB 30012020
Sovereign Bonds | -5% ₹1,592 Cr 160,500,000
↑ 160,500,000 AXIS BANK LIMITED
Certificate of Deposit | -3% ₹998 Cr 100,000 364 DTB 12122019
Sovereign Bonds | -3% ₹906 Cr 90,771,900 8.19% Govt Stock 2020
Sovereign Bonds | -2% ₹803 Cr 80,000,000
↑ 35,500,000 Icici Bank Limited **
Certificate of Deposit | -2% ₹798 Cr 91 DTB 20022020
Sovereign Bonds | -2% ₹791 Cr 80,000,000
↑ 80,000,000 INFINA Finance Private Limited
Commercial Paper | -2% ₹750 Cr 15,000
↑ 15,000 2. Aditya Birla Sun Life Liquid Fund
CAGR/Annualized return of 7.5% since its launch. Ranked 15 in Liquid Fund category. Return for 2019 was 6.7% , 2018 was 7.4% and 2017 was 6.7% . Aditya Birla Sun Life Liquid Fund
Growth Launch Date 30 Mar 04 NAV (24 Jan 20) ₹314.393 ↑ 0.04 (0.01 %) Net Assets (Cr) ₹40,854 on 31 Dec 19 Category Debt - Liquid Fund AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Low Expense Ratio 0.23 Sharpe Ratio 16.3 Information Ratio -1.09 Alpha Ratio 0.67 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 5.42% Effective Maturity 1 Month 17 Days Modified Duration 1 Month 17 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 14 ₹10,000 31 Dec 15 ₹10,838 31 Dec 16 ₹11,672 31 Dec 17 ₹12,452 31 Dec 18 ₹13,375 31 Dec 19 ₹14,271 Returns for Aditya Birla Sun Life Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.8% 1 Year 6.5% 3 Year 6.9% 5 Year 7.3% 10 Year 15 Year Since launch 7.5% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.7% 2017 7.4% 2016 6.7% 2015 7.7% 2014 8.4% 2013 9.2% 2012 9.3% 2011 9.7% 2010 9% 2009 5.5% Fund Manager information for Aditya Birla Sun Life Liquid Fund
Name Since Tenure Sunaina Cunha 18 Jun 09 10.38 Yr. Kaustubh Gupta 15 Jul 11 8.3 Yr. Data below for Aditya Birla Sun Life Liquid Fund as on 31 Dec 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Corporate 60.13% Cash Equivalent 38.93% Government 0.94% Credit Quality
Rating Value AA 0.96% AAA 99.04% Top Securities Holdings / Portfolio
Name Holding Value Quantity Reverse Repo
CBLO/Reverse Repo | -7% ₹2,852 Cr 8.19% Govt Stock 2020
Sovereign Bonds | -6% ₹2,398 Cr 238,904,300
↑ 238,904,300 Net Receivables / (Payables)
Net Current Assets | -3% -₹1,349 Cr 6.35% Govt Stock 2020
Sovereign Bonds | -3% ₹1,046 Cr 104,500,000
↑ 53,000,000 182 DTB 26122019
Sovereign Bonds | -2% ₹997 Cr 100,000,000 Reliance Jio Infocomm Limited
Commercial Paper | -2% ₹894 Cr 18,000
↑ 18,000 5.90% Indusind Bank Limited (05/12/2019)
Net Current Assets | -2% ₹750 Cr 5.90% Indusind Bank Limited (17/12/2019)
Net Current Assets | -2% ₹750 Cr Bajaj Finance Limited
Commercial Paper | -2% ₹747 Cr 15,000
↑ 5,000 Chennai Petroleum Corporation Ltd
Commercial Paper | -2% ₹698 Cr 14,000
↑ 14,000 3. Axis Liquid Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 21 in Liquid Fund category. Return for 2019 was 6.6% , 2018 was 7.5% and 2017 was 6.7% . Axis Liquid Fund
Growth Launch Date 9 Oct 09 NAV (24 Jan 20) ₹2,170.04 ↑ 0.30 (0.01 %) Net Assets (Cr) ₹29,119 on 31 Dec 19 Category Debt - Liquid Fund AMC Axis Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.14 Sharpe Ratio 14.58 Information Ratio 0 Alpha Ratio 0 Min Investment 500 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 5.29% Effective Maturity 2 Months 1 Day Modified Duration 1 Month 27 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 14 ₹10,000 31 Dec 15 ₹10,835 31 Dec 16 ₹11,663 31 Dec 17 ₹12,446 31 Dec 18 ₹13,374 31 Dec 19 ₹14,262 Returns for Axis Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.8% 1 Year 6.5% 3 Year 6.9% 5 Year 7.3% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.6% 2017 7.5% 2016 6.7% 2015 7.6% 2014 8.4% 2013 9.1% 2012 9.2% 2011 9.7% 2010 9% 2009 5.6% Fund Manager information for Axis Liquid Fund
Name Since Tenure Devang Shah 5 Nov 12 7.07 Yr. Aditya Pagaria 13 Aug 16 3.3 Yr. Data below for Axis Liquid Fund as on 31 Dec 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Corporate 52.37% Cash Equivalent 46.41% Government 1.22% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Clearing Corporation Of India Ltd
CBLO | -7% ₹2,276 Cr 91 DTB 05122019
Sovereign Bonds | -7% ₹2,198 Cr 219,899,100
↑ 150,000,000 Corporate Bond Repo
CBLO/Reverse Repo | -5% ₹1,547 Cr Net Receivables / (Payables)
Net Current Assets | -5% -₹1,439 Cr 91 DTB 30012020
Sovereign Bonds | -4% ₹1,283 Cr 129,359,800
↑ 129,359,800 182 DTB 30012020
Sovereign Bonds | -3% ₹818 Cr 82,500,000
↑ 82,500,000 Reliance Retail Limited
Commercial Paper | -2% ₹744 Cr 15,000
↑ 15,000 Chennai Petroleum Corporation Ltd
Commercial Paper | -2% ₹697 Cr 14,000
↑ 14,000 91 DTB 12122019
Sovereign Bonds | -2% ₹560 Cr 56,125,100 Housing Development Finance Corporation Limited
Debentures | -2% ₹536 Cr 5,350 4. ICICI Prudential Liquid Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 20 in Liquid Fund category. Return for 2019 was 6.6% , 2018 was 7.4% and 2017 was 6.6% . ICICI Prudential Liquid Fund
Growth Launch Date 17 Nov 05 NAV (24 Jan 20) ₹289.352 ↑ 0.04 (0.01 %) Net Assets (Cr) ₹55,665 on 31 Dec 19 Category Debt - Liquid Fund AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.22 Sharpe Ratio 14.51 Information Ratio -1.8 Alpha Ratio 0.31 Min Investment 500 Min SIP Investment 500 Exit Load NIL Yield to Maturity 5.32% Effective Maturity 1 Month 18 Days Modified Duration 1 Month 16 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 14 ₹10,000 31 Dec 15 ₹10,834 31 Dec 16 ₹11,663 31 Dec 17 ₹12,438 31 Dec 18 ₹13,357 31 Dec 19 ₹14,238 Returns for ICICI Prudential Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.8% 1 Year 6.4% 3 Year 6.8% 5 Year 7.3% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.6% 2017 7.4% 2016 6.6% 2015 7.7% 2014 8.3% 2013 9.1% 2012 9.3% 2011 9.7% 2010 8.9% 2009 5.5% Fund Manager information for ICICI Prudential Liquid Fund
Name Since Tenure Rahul Goswami 27 Sep 12 7.26 Yr. Rohan Maru 19 Sep 13 6.29 Yr. Data below for ICICI Prudential Liquid Fund as on 31 Dec 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Cash Equivalent 50.88% Corporate 49% Government 0.12% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 20022020
Sovereign Bonds | -6% ₹3,957 Cr 400,000,000
↑ 400,000,000 Reverse Repo
CBLO/Reverse Repo | -6% ₹3,891 Cr 91 DTB 19122019
Sovereign Bonds | -5% ₹2,995 Cr 300,187,000 91 DTB 13022020
Sovereign Bonds | -5% ₹2,886 Cr 291,497,500
↑ 291,497,500 TATA SONS PRIVATE LIMITED
Commercial Paper | -3% ₹1,995 Cr 40,000 42 DTB 17122019
Sovereign Bonds | -3% ₹1,681 Cr 168,500,000
↑ 168,500,000 91 DTB 12122019
Sovereign Bonds | -3% ₹1,679 Cr 168,174,700 6.35% Govt Stock 2020
Sovereign Bonds | -3% ₹1,663 Cr 166,160,000 91 DTB 06022020
Sovereign Bonds | -3% ₹1,606 Cr 162,000,000
↑ 162,000,000 91 DTB 05122019
Sovereign Bonds | -2% ₹1,277 Cr 127,746,600 5. Tata Liquid Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 18 in Liquid Fund category. Return for 2019 was 6.6% , 2018 was 7.4% and 2017 was 6.7% . Tata Liquid Fund
Growth Launch Date 1 Sep 04 NAV (24 Jan 20) ₹3,078.57 ↑ 0.43 (0.01 %) Net Assets (Cr) ₹18,477 on 31 Dec 19 Category Debt - Liquid Fund AMC Tata Asset Management Limited Rating ☆☆☆☆ Risk Low Expense Ratio 0.34 Sharpe Ratio 14.89 Information Ratio -1.52 Alpha Ratio 0.43 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 5.34% Effective Maturity 1 Month 13 Days Modified Duration 1 Month 13 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 14 ₹10,000 31 Dec 15 ₹10,835 31 Dec 16 ₹11,665 31 Dec 17 ₹12,444 31 Dec 18 ₹13,368 31 Dec 19 ₹14,247 Returns for Tata Liquid Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.8% 1 Year 6.4% 3 Year 6.9% 5 Year 7.3% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.6% 2017 7.4% 2016 6.7% 2015 7.7% 2014 8.4% 2013 9.1% 2012 9.3% 2011 9.8% 2010 9% 2009 5% Fund Manager information for Tata Liquid Fund
Name Since Tenure Amit Somani 16 Oct 13 6.13 Yr. Data below for Tata Liquid Fund as on 31 Dec 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Corporate 66.85% Cash Equivalent 31.36% Government 1.79% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 42 DTB 17122019
Sovereign Bonds | -5% ₹1,088 Cr 109,000,000
↑ 109,000,000 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -4% ₹997 Cr 20,000 91 DTB 23012020
Sovereign Bonds | -4% ₹956 Cr 96,264,000
↓ -54,500,000 (C) Treps
CBLO/Reverse Repo | -4% ₹902 Cr Chennai Petroleum Corporation Ltd
Commercial Paper | -4% ₹898 Cr 18,000
↑ 18,000 182 DTB 26122019
Sovereign Bonds | -4% ₹888 Cr 89,053,800 LARSEN AND TOUBRO LIMITED
Commercial Paper | -3% ₹766 Cr 15,500
↑ 15,500 Hindustan Zinc Limited
Commercial Paper | -3% ₹748 Cr 15,000 Bajaj Finance Limited
Commercial Paper | -3% ₹698 Cr 14,000 91 DTB09012020
Sovereign Bonds | -3% ₹641 Cr 64,440,300
↑ 64,440,300 6. UTI Liquid Cash Plan
CAGR/Annualized return of 7.3% since its launch. Ranked 32 in Liquid Fund category. Return for 2019 was 6.6% , 2018 was 7.4% and 2017 was 6.7% . UTI Liquid Cash Plan
Growth Launch Date 11 Dec 03 NAV (25 Jan 20) ₹3,204.67 ↑ 0.87 (0.03 %) Net Assets (Cr) ₹30,477 on 31 Dec 19 Category Debt - Liquid Fund AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk Low Expense Ratio 0.17 Sharpe Ratio 14.36 Information Ratio -1.34 Alpha Ratio 0.34 Min Investment 500 Min SIP Investment 1,500 Exit Load NIL Yield to Maturity 5.31% Effective Maturity 1 Month 13 Days Modified Duration 1 Month 10 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 14 ₹10,000 31 Dec 15 ₹10,828 31 Dec 16 ₹11,657 31 Dec 17 ₹12,435 31 Dec 18 ₹13,359 31 Dec 19 ₹14,245 Returns for UTI Liquid Cash Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20 Duration Returns 1 Month 0.4% 3 Month 1.3% 6 Month 2.8% 1 Year 6.5% 3 Year 6.9% 5 Year 7.3% 10 Year 15 Year Since launch 7.3% Historical performance (Yearly) on absolute basis
Year Returns 2018 6.6% 2017 7.4% 2016 6.7% 2015 7.7% 2014 8.3% 2013 9.1% 2012 9.1% 2011 9.6% 2010 8.9% 2009 5.4% Fund Manager information for UTI Liquid Cash Plan
Name Since Tenure Amandeep Chopra 14 Dec 06 12.97 Yr. Amit Sharma 7 Jul 17 2.4 Yr. Data below for UTI Liquid Cash Plan as on 31 Dec 19
Asset Allocation
Asset Class Value Cash 100% Debt Sector Allocation
Sector Value Corporate 52.94% Cash Equivalent 44.5% Government 2.56% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -7% ₹2,245 Cr 00 91 DTB 26122019
Sovereign Bonds | -6% ₹2,183 Cr 21,900,000,000 91 DTB 12122019
Sovereign Bonds | -4% ₹1,477 Cr 14,787,040,000 8.19% Govt Stock 2020
Sovereign Bonds | -4% ₹1,242 Cr 12,370,000,000
↑ 7,170,000,000 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -3% ₹998 Cr 10,000,000,000 Hindustan Zinc Limited
Commercial Paper | -3% ₹993 Cr 10,000,000,000 364 DTB 05122019
Sovereign Bonds | -2% ₹805 Cr 8,050,000,000 STEEL AUTHORITY OF INDIA LIMITED
Commercial Paper | -2% ₹750 Cr 7,500,000,000 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -2% ₹748 Cr 7,500,000,000 Indian Railway Finance Corporation Limited
Commercial Paper | -2% ₹643 Cr 6,500,000,000
↑ 6,500,000,000
How to evaluate Liquid Mutual Funds?
When looking for a liquid mutual fund, the past return should not be the only factor for consideration. Other factors like fund size, track record, credit quality of underlying securities should also be kept in mind.
1. Investment Plans
Liquid funds come with different plans like a daily dividend plan, weekly dividend plan, monthly dividend plan and growth plans. In the growth option, profits made by the scheme are invested back into it. This results in the NAV (Net Asset Value) of the scheme rising over time. In the dividend option, the profits made by the fund are not re-invested. Dividends are distributed to the investor from time to time. Investors can choose their plan as per their convenience and liquidity needs.
2. Expense Ratio
Mutual funds charge a fee to manage your funds called an expense ratio. As per SEBI norms, the upper limit of expense ratio is 2.25%. In case of liquid funds, they maintain a lower expense ratio to provide relatively higher returns over a short period of time.
3. Investment Horizon
Plan your investment horizon. Liquid funds are exclusively meant to invest surplus cash over a very short period of time that is for 91 days. So, if you have an idle cash, you can invest here for a short period and earn better returns than bank Savings Account. In case you have a longer investment horizon of up to 1 year, then you may consider investing in short duration funds to get relatively higher returns.
Features of Liquid Mutual Funds
1. Exit Load Of Liquid Mutual Funds
Considering the fact that liquid mutual funds are short-term investments with a low maturity period, the majority of the funds under this category do not levy any exit load on redemption. Also, if there exists any exit load, it is very nominal and usually not more than a week. Liquid funds generally do not have an exit load given they are very short investment products.
2. Volatility Of Liquid Fund Investment
Generally, the volatility of liquid funds is low as the investment lasts for a few days to weeks. So, the risk of loss in investment is quite less. However, it is suggested to make a liquid fund investment considering the market condition to avoid the opportunity of loss.
3. Lock-in Period Of Best Liquid Funds
Given that liquid mutual funds are very short-term investment options, liquid funds do not have any lock-in period. Liquid Funds can be invested for a time period as short as one day going upto a couple of weeks.
4. Liquid Fund Returns
Liquid funds are one of the best short-term investments during a high Inflation period. In the high inflation period, the interest rate on the liquid fund is high. Thus, helping liquid mutual funds to earn good returns. The liquid fund returns are usually higher than that of other traditional investments like bank fixed deposits or savings accounts. However, it is suggested to invest in best liquid funds choosing a right option (growth, dividend payout, dividend re-investment) suiting your needs.
5. Liquid Funds Taxation
Generally, liquid fund returns receive in the form of dividends are not taxed in the hands of investors. However, a Dividend Distribution Tax (DDT) of approximately 28% is deducted by the mutual fund company from the dividends. Moreover, for the investors who have opted for growth option, a short-term Capital Gain tax is deducted as per the individual’s tax slab. This tax deduction is same as that of a savings account.
How to Invest in Liquid Funds Online?
Open Free Investment Account for Lifetime at Fincash.com
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
Due to the lack of awareness about liquid funds, people don’t invest in them and instead keep huge sums in a savings account. But, it’s never too late to begin something good. So, invest in best liquid funds today!
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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