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5 Best Short Duration (Short Term) Debt Funds To Invest In 2025
Generally, people believe that Mutual Fund investments are for long-term investors. Well, that's not true! There is a category of funds called Short Duration Funds or Short Term Debt fund that allow investors to invest for short-term along with keeping their money accessible. Though there are various Short Duration Funds available in the Market, investors are suggested to look for best Short Duration (Short Term) Debt Funds.
The best Short Duration (Short Term) Debt Funds are funds that allow investors to invest for a short term, typically for three years, to earn good returns with less market risk. These funds are highly suitable investors with a low-risk appetite who seek quick returns and a steady flow of Income without being affected by the daily changes in the bond markets.
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Best Short Duration Funds or Short Term Debt Funds FY 25 - 26
To generate income through investments in a range of debt and money market instruments of various maturities with a view to maximising income while maintaining the optimum balance of yield, safety and liquidity. ICICI Prudential Short Term Fund is a Debt - Short term Bond fund was launched on 25 Oct 01. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Short Term Fund Returns up to 1 year are on (Erstwhile HDFC Short Term Opportunities Fund) To generate regular income through investments in Debt/Money Market Instruments and Government Securities with maturities not exceeding 36 months. HDFC Short Term Debt Fund is a Debt - Short term Bond fund was launched on 25 Jun 10. It is a fund with Moderately Low risk and has given a Below is the key information for HDFC Short Term Debt Fund Returns up to 1 year are on An Open ended Income scheme with the objective to generate regular income by investing primarily in investment grade fixed income securities / money market instruments with short to medium term maturities and across the credit spectrum within the universe of investment grade rating. Aditya Birla Sun Life Short Term Opportunities Fund is a Debt - Short term Bond fund was launched on 9 May 03. It is a fund with Moderate risk and has given a Below is the key information for Aditya Birla Sun Life Short Term Opportunities Fund Returns up to 1 year are on To generate stable returns with a low risk strategy while maintaining liquidity through a portfolio comprising of debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved. Axis Short Term Fund is a Debt - Short term Bond fund was launched on 22 Jan 10. It is a fund with Moderately Low risk and has given a Below is the key information for Axis Short Term Fund Returns up to 1 year are on 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 Short Term Income Fund is a Debt - Short term Bond fund was launched on 19 Sep 07. It is a fund with Moderate risk and has given a Below is the key information for UTI Short Term Income Fund Returns up to 1 year are on Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity ICICI Prudential Short Term Fund Growth ₹59.5374
↓ -0.03 ₹20,428 3 4.7 9.1 7.6 7.8 7.6% 2Y 9M 29D 4Y 10M 17D HDFC Short Term Debt Fund Growth ₹31.693
↓ -0.02 ₹14,208 3 4.7 9.4 7.3 8.3 7.47% 2Y 9M 22D 4Y 2M 5D Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹47.1341
↓ -0.02 ₹8,068 3 4.8 9.4 7.2 7.9 7.49% 2Y 9M 7D 3Y 8M 1D Axis Short Term Fund Growth ₹30.5934
↓ -0.02 ₹9,024 3.2 5 9.5 7.1 8 7.48% 2Y 9M 4D 3Y 7M 20D UTI Short Term Income Fund Growth ₹31.4105
↓ -0.01 ₹2,566 3 4.5 8.9 7 7.9 7.29% 2Y 11M 23D 3Y 11M 1D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Apr 25 Assets >= 100 Crore & Sorted on 3 Year CAGR Return.
1. ICICI Prudential Short Term Fund
CAGR/Annualized return of 7.9% since its launch. Ranked 11 in Short term Bond category. Return for 2024 was 7.8% , 2023 was 7.4% and 2022 was 4.7% . ICICI Prudential Short Term Fund
Growth Launch Date 25 Oct 01 NAV (25 Apr 25) ₹59.5374 ↓ -0.03 (-0.06 %) Net Assets (Cr) ₹20,428 on 31 Mar 25 Category Debt - Short term Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderate Expense Ratio 1.11 Sharpe Ratio 1.55 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-7 Days (0.25%),7 Days and above(NIL) Yield to Maturity 7.6% Effective Maturity 4 Years 10 Months 17 Days Modified Duration 2 Years 9 Months 29 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,876 31 Mar 22 ₹11,332 31 Mar 23 ₹11,983 31 Mar 24 ₹12,909 31 Mar 25 ₹13,950 Returns for ICICI Prudential Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 1.6% 3 Month 3% 6 Month 4.7% 1 Year 9.1% 3 Year 7.6% 5 Year 7.1% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.8% 2022 7.4% 2021 4.7% 2020 3.9% 2019 10.6% 2018 9.7% 2017 5.8% 2016 5.9% 2015 11.1% 2014 8% Fund Manager information for ICICI Prudential Short Term Fund
Name Since Tenure Manish Banthia 19 Nov 09 15.29 Yr. Nikhil Kabra 29 Dec 20 4.17 Yr. Data below for ICICI Prudential Short Term Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 4.2% Debt 95.53% Other 0.27% Debt Sector Allocation
Sector Value Corporate 59.41% Government 36.12% Cash Equivalent 4.2% Credit Quality
Rating Value AA 18.83% AAA 81.17% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.1% Govt Stock 2034
Sovereign Bonds | -10% ₹2,088 Cr 204,055,180
↓ -20,000,000 7.93% Govt Stock 2033
Sovereign Bonds | -6% ₹1,301 Cr 126,501,270
↓ -1,818,180 7.53% Govt Stock 2034
Sovereign Bonds | -3% ₹703 Cr 69,574,740
↓ -16,500,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹548 Cr 55,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹480 Cr 48,000 Small Industries Development Bank Of India
Debentures | -2% ₹369 Cr 37,000 Small Industries Development Bank Of India
Debentures | -2% ₹363 Cr 36,500 SANSAR AUG 2024 VII TRUST
Unlisted bonds | -2% ₹352 Cr 3,500,000,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹349 Cr 35,000 6.92% Govt Stock 2039
Sovereign Bonds | -2% ₹328 Cr 32,570,350 2. HDFC Short Term Debt Fund
CAGR/Annualized return of 8.1% since its launch. Ranked 30 in Short term Bond category. Return for 2024 was 8.3% , 2023 was 7.1% and 2022 was 3.5% . HDFC Short Term Debt Fund
Growth Launch Date 25 Jun 10 NAV (25 Apr 25) ₹31.693 ↓ -0.02 (-0.05 %) Net Assets (Cr) ₹14,208 on 31 Mar 25 Category Debt - Short term Bond AMC HDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.71 Sharpe Ratio 1.77 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load NIL Yield to Maturity 7.47% Effective Maturity 4 Years 2 Months 5 Days Modified Duration 2 Years 9 Months 22 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,851 31 Mar 22 ₹11,348 31 Mar 23 ₹11,847 31 Mar 24 ₹12,759 31 Mar 25 ₹13,829 Returns for HDFC Short Term Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 1.7% 3 Month 3% 6 Month 4.7% 1 Year 9.4% 3 Year 7.3% 5 Year 7% 10 Year 15 Year Since launch 8.1% Historical performance (Yearly) on absolute basis
Year Returns 2023 8.3% 2022 7.1% 2021 3.5% 2020 3.9% 2019 11% 2018 9.7% 2017 7% 2016 6.5% 2015 9.3% 2014 8.7% Fund Manager information for HDFC Short Term Debt Fund
Name Since Tenure Anil Bamboli 25 Jun 10 14.69 Yr. Dhruv Muchhal 22 Jun 23 1.69 Yr. Data below for HDFC Short Term Debt Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 3.7% Debt 96.01% Other 0.29% Debt Sector Allocation
Sector Value Corporate 60.45% Government 35.57% Cash Equivalent 3.7% Credit Quality
Rating Value AA 11.05% AAA 88.95% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -6% ₹847 Cr 82,500,000 7.3% Govt Stock 2028
Sovereign Bonds | -4% ₹518 Cr 51,500,000 Aditya Birla Renewables Limited
Debentures | -3% ₹435 Cr 43,500 7.26% Govt Stock 2032
Sovereign Bonds | -3% ₹355 Cr 34,500,000 Jamnagar Utilities And Power Private Limited
Debentures | -2% ₹327 Cr 32,500 7.1% Govt Stock 2034
Sovereign Bonds | -2% ₹281 Cr 27,500,000 Bajaj Housing Finance Limited
Debentures | -2% ₹252 Cr 25,000 National Bank for Agriculture and Rural Development
Domestic Bonds | -2% ₹251 Cr 25,000 Pipeline Infrastructure Private Limited
Debentures | -2% ₹248 Cr 24,500 TVS Credit Services Limited
Debentures | -1% ₹205 Cr 200 3. Aditya Birla Sun Life Short Term Opportunities Fund
CAGR/Annualized return of 7.3% since its launch. Ranked 18 in Short term Bond category. Return for 2024 was 7.9% , 2023 was 6.9% and 2022 was 4.2% . Aditya Birla Sun Life Short Term Opportunities Fund
Growth Launch Date 9 May 03 NAV (25 Apr 25) ₹47.1341 ↓ -0.02 (-0.04 %) Net Assets (Cr) ₹8,068 on 31 Mar 25 Category Debt - Short term Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderate Expense Ratio 1.06 Sharpe Ratio 1.42 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load 0-90 Days (0.5%),90 Days and above(NIL) Yield to Maturity 7.49% Effective Maturity 3 Years 8 Months 1 Day Modified Duration 2 Years 9 Months 7 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹11,021 31 Mar 22 ₹11,540 31 Mar 23 ₹12,088 31 Mar 24 ₹12,971 31 Mar 25 ₹14,029 Returns for Aditya Birla Sun Life Short Term Opportunities Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 1.7% 3 Month 3% 6 Month 4.8% 1 Year 9.4% 3 Year 7.2% 5 Year 7.2% 10 Year 15 Year Since launch 7.3% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.9% 2022 6.9% 2021 4.2% 2020 3.8% 2019 11.1% 2018 8.5% 2017 6.5% 2016 5.6% 2015 11.3% 2014 8.4% Fund Manager information for Aditya Birla Sun Life Short Term Opportunities Fund
Name Since Tenure Kaustubh Gupta 11 Sep 14 10.48 Yr. Mohit Sharma 6 Aug 20 4.57 Yr. Data below for Aditya Birla Sun Life Short Term Opportunities Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 8.04% Debt 91.7% Other 0.27% Debt Sector Allocation
Sector Value Corporate 55.61% Government 37.7% Cash Equivalent 6.42% Credit Quality
Rating Value AA 13.2% AAA 86.8% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -12% ₹1,015 Cr 98,800,000
↓ -2,000,000 7.1% Govt Stock 2034
Sovereign Bonds | -5% ₹480 Cr 46,906,400
↑ 8,000,000 National Bank For Agriculture And Rural Development
Debentures | -5% ₹476 Cr 47,500 7.26% Govt Stock 2033
Sovereign Bonds | -3% ₹247 Cr 24,000,000
↓ -8,500,000 Small Industries Development Bank Of India
Debentures | -3% ₹236 Cr 23,500 Bajaj Housing Finance Limited
Debentures | -2% ₹202 Cr 20,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹199 Cr 20,000 Small Industries Development Bank Of India
Debentures | -2% ₹185 Cr 1,850 Embassy Office Parks Reit
Debentures | -2% ₹181 Cr 18,000 Bharti Telecom Limited
Debentures | -2% ₹150 Cr 15,000 4. Axis Short Term Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 26 in Short term Bond category. Return for 2024 was 8% , 2023 was 6.8% and 2022 was 3.7% . Axis Short Term Fund
Growth Launch Date 22 Jan 10 NAV (25 Apr 25) ₹30.5934 ↓ -0.02 (-0.06 %) Net Assets (Cr) ₹9,024 on 31 Mar 25 Category Debt - Short term Bond AMC Axis Asset Management Company Limited Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.92 Sharpe Ratio 1.6 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.48% Effective Maturity 3 Years 7 Months 20 Days Modified Duration 2 Years 9 Months 4 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,792 31 Mar 22 ₹11,260 31 Mar 23 ₹11,747 31 Mar 24 ₹12,599 31 Mar 25 ₹13,641 Returns for Axis Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 1.7% 3 Month 3.2% 6 Month 5% 1 Year 9.5% 3 Year 7.1% 5 Year 6.6% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2023 8% 2022 6.8% 2021 3.7% 2020 3.5% 2019 10.1% 2018 9.8% 2017 6.3% 2016 5.9% 2015 9.6% 2014 8.1% Fund Manager information for Axis Short Term Fund
Name Since Tenure Devang Shah 5 Nov 12 12.33 Yr. Aditya Pagaria 3 Jul 23 1.66 Yr. Data below for Axis Short Term Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 6.32% Debt 93.41% Other 0.27% Debt Sector Allocation
Sector Value Corporate 57.88% Government 35.52% Cash Equivalent 6.32% Credit Quality
Rating Value AA 13.3% AAA 86.7% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.1% Govt Stock 2034
Sovereign Bonds | -10% ₹851 Cr 83,125,200
↑ 23,500,000 7.32% Govt Stock 2030
Sovereign Bonds | -4% ₹392 Cr 38,000,000
↓ -5,500,000 National Bank For Agriculture And Rural Development
Debentures | -4% ₹350 Cr 35,000
↑ 12,500 7.18% Govt Stock 2033
Sovereign Bonds | -4% ₹339 Cr 33,000,000
↑ 7,500,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹309 Cr 31,000 India Grid Trust
Debentures | -2% ₹190 Cr 19,000 Indigrid Infrastructure Trust 7.88%
Debentures | -1% ₹126 Cr 12,500 Bharti Telecom Limited
Debentures | -1% ₹126 Cr 12,500 Tata Capital Ltd. 8.098%
Debentures | -1% ₹126 Cr 12,500
↑ 12,500 Embassy Office Parks Reit
Debentures | -1% ₹125 Cr 12,500
↑ 5,000 5. UTI Short Term Income Fund
CAGR/Annualized return of 6.7% since its launch. Ranked 10 in Short term Bond category. Return for 2024 was 7.9% , 2023 was 6.9% and 2022 was 3.8% . UTI Short Term Income Fund
Growth Launch Date 19 Sep 07 NAV (25 Apr 25) ₹31.4105 ↓ -0.01 (-0.04 %) Net Assets (Cr) ₹2,566 on 31 Mar 25 Category Debt - Short term Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.94 Sharpe Ratio 1.04 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.29% Effective Maturity 3 Years 11 Months 1 Day Modified Duration 2 Years 11 Months 23 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,842 31 Mar 22 ₹11,833 31 Mar 23 ₹12,361 31 Mar 24 ₹13,306 31 Mar 25 ₹14,345 Returns for UTI Short Term Income Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 1.6% 3 Month 3% 6 Month 4.5% 1 Year 8.9% 3 Year 7% 5 Year 7.5% 10 Year 15 Year Since launch 6.7% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.9% 2022 6.9% 2021 3.8% 2020 8.4% 2019 10.5% 2018 -3.9% 2017 6% 2016 6.1% 2015 10.1% 2014 8.3% Fund Manager information for UTI Short Term Income Fund
Name Since Tenure Sudhir Agarwal 25 Oct 12 12.36 Yr. Data below for UTI Short Term Income Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 14.6% Debt 85.12% Other 0.28% Debt Sector Allocation
Sector Value Corporate 64.37% Government 20.75% Cash Equivalent 14.6% Credit Quality
Rating Value AA 13.08% AAA 86.92% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.79% Government Of India (07/10/2034)
Sovereign Bonds | -8% ₹201 Cr 2,000,000,000 LIC Housing Finance Limited
Debentures | -7% ₹176 Cr 1,750 National Housing Bank
Debentures | -7% ₹176 Cr 17,500 Small Industries Development Bank Of India
Debentures | -7% ₹176 Cr 17,500 National Bank For Agriculture And Rural Development
Debentures | -7% ₹176 Cr 17,500 Power Finance Corporation Ltd.
Debentures | -7% ₹175 Cr 17,500 Bajaj Finance Limited
Debentures | -3% ₹75 Cr 7,500 Kotak Mahindra Prime Limited
Debentures | -3% ₹75 Cr 750 Shriram Finance Limited
Debentures | -3% ₹70 Cr 7,000 Rural Electrification Corporation Limited
Debentures | -2% ₹60 Cr 6,000
Why Invest In Best Short Duration Debt Funds?
Given the short term nature of these investments, Short Duration (Short Term) Debt Funds do not offer very high returns like Equity Funds. However, there are certainly several reasons that ensure Investing in the best Short Duration (Short Term) Debt funds is totally worth to consider. Some of those include-
Short Duration (Short Term) debt funds are a highly suitable option for investors who are willing to make investments that have a slightly higher maturity than liquid & ultra short term debt funds but on the same hand are not very risky.
Being a short term investment, this fund is highly suitable for those who want to park their idle cash for 1-3 years to earn better returns than Fixed Income investment options like FDs.
As per the analysis, short term bond funds offer a better rate of return in accordance with the risk involved as compared to long term Bonds. Short Duration Funds are less sensitive to the rising Inflation than other intermediate and long term debt funds.
Lastly, the Short Duration (Short Term) debt funds are highly liquid, meaning that the investors can have an easy access to their cash. However, some schemes under this category do charge an exit load if the investment is redeemed in a very short duration (mostly 1 month to 6 months). So, it is always suggested to invest in best Short Duration Debt Funds wisely.
How to Invest in Short Duration Debt 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!
Conclusion
Investors can tweak their investment portfolios as per their risk profile. As the bond market offers the advantage of falling interest rates, one can earn better returns by increasing the duration o the investment. This is where Short Duration (Short Term) Debt Funds come in. These funds invest in debt market to offer long term returns over the duration of 2-3 years. So, invest in best Short Duration 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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