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5 Best Short Duration (Short Term) Debt Mutual Funds 2023

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5 Best Short Duration (Short Term) Debt Funds To Invest In 2023

Updated on February 2, 2023 , 25026 views

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 23 - 24

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2022 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
Franklin India Short Term Income Plan - Retail Plan Growth ₹4,874.76
↑ 0.32
₹4842.62.99.97.48.60%
UTI Short Term Income Fund Growth ₹26.4918
↑ 0.00
₹2,2461.72.94.37.43.87.62%1Y 9M 4D2Y 5M 16D
BNP Paribas Short Term Fund Growth ₹25.4771
↓ -0.01
₹2580.61.34.66.5 5.16%1Y 11M 26D2Y 3M
Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹39.7055
↑ 0.01
₹5,0071.72.74.86.34.27.81%1Y 7M 13D2Y
ICICI Prudential Short Term Fund Growth ₹49.9643
↑ 0.01
₹15,5281.73.35.66.24.77.85%1Y 4M 20D4Y 8M 19D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 3 Feb 23
*List Funds based on Assets >= 100 Crore & Sorted on 3 Year CAGR Return.

1. Franklin India Short Term Income Plan - Retail Plan

The objective of the Scheme is to provide investors stable returns by investing in fixed income securities.

Franklin India Short Term Income Plan - Retail Plan is a Debt - Short term Bond fund was launched on 31 Jan 02. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.8% since its launch.  Ranked 19 in Short term Bond category.  Return for 2022 was 8.6% , 2021 was 15% and 2020 was -5.3% .

Below is the key information for Franklin India Short Term Income Plan - Retail Plan

Franklin India Short Term Income Plan - Retail Plan
Growth
Launch Date 31 Jan 02
NAV (03 Feb 23) ₹4,874.76 ↑ 0.32   (0.01 %)
Net Assets (Cr) ₹484 on 31 Dec 22
Category Debt - Short term Bond
AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd
Rating
Risk Moderate
Expense Ratio 0.04
Sharpe Ratio 0.55
Information Ratio -0.04
Alpha Ratio 5.03
Min Investment 5,000
Min SIP Investment 500
Exit Load 0-1 Years (0.5%),1 Years and above(NIL)
Yield to Maturity 0%
Effective Maturity
Modified Duration

Growth of 10,000 investment over the years.

DateValue
31 Jan 18₹10,000
31 Jan 19₹10,900
31 Jan 20₹10,894
31 Jan 21₹10,766
31 Jan 22₹12,312
31 Jan 23₹13,470

Franklin India Short Term Income Plan - Retail Plan SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Purchase not allowed

Returns for Franklin India Short Term Income Plan - Retail Plan

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Feb 23

DurationReturns
1 Month 1.1%
3 Month 2.6%
6 Month 2.9%
1 Year 9.9%
3 Year 7.4%
5 Year 6.2%
10 Year
15 Year
Since launch 7.8%
Historical performance (Yearly) on absolute basis
YearReturns
2022 8.6%
2021 15%
2020 -5.3%
2019 4.2%
2018 8.8%
2017 8.6%
2016 8.3%
2015 9.1%
2014 11.7%
2013 9%
Fund Manager information for Franklin India Short Term Income Plan - Retail Plan
NameSinceTenure
Santosh Kamath31 Jan 0220.93 Yr.
Kunal Agrawal31 Jan 0220.93 Yr.

Data below for Franklin India Short Term Income Plan - Retail Plan as on 31 Dec 22

Asset Allocation
Asset ClassValue
Cash7.65%
Debt92.35%
Debt Sector Allocation
SectorValue
Corporate92.35%
Cash Equivalent7.65%
Credit Quality
RatingValue
A100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Andhra Pradesh Capital Region Development Authority
Debentures | -
44%₹216 Cr10,670
↓ -05
Andhra Pradesh Capital Region Development Authority
Debentures | -
42%₹202 Cr10,025
↓ -575
Andhra Pradesh Capital Region Development Authority
Debentures | -
6%₹31 Cr1,523
↓ -49
SBI Overnight Fund Dir Gr
Investment Fund | -
5%₹25 Cr70,010
↑ 34,939
Rivaaz TRade Ventures Private Limited
Debentures | -
0%₹0 Cr1,000
↑ 1,000
Future Ideas Company Limited
Debentures | -
0%₹0 Cr300
↑ 300
Call, Cash & Other Assets
CBLO | -
2%₹12 Cr

2. UTI Short Term Income Fund

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 CAGR/Annualized return of 6.5% since its launch.  Ranked 10 in Short term Bond category.  Return for 2022 was 3.8% , 2021 was 8.4% and 2020 was 10.5% .

Below is the key information for UTI Short Term Income Fund

UTI Short Term Income Fund
Growth
Launch Date 19 Sep 07
NAV (03 Feb 23) ₹26.4918 ↑ 0.00   (0.02 %)
Net Assets (Cr) ₹2,246 on 31 Dec 22
Category Debt - Short term Bond
AMC UTI Asset Management Company Ltd
Rating
Risk Moderate
Expense Ratio 0.94
Sharpe Ratio -1.24
Information Ratio 0
Alpha Ratio 0
Min Investment 10,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 7.62%
Effective Maturity 2 Years 5 Months 16 Days
Modified Duration 1 Year 9 Months 4 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 18₹10,000
31 Jan 19₹10,594
31 Jan 20₹10,237
31 Jan 21₹11,197
31 Jan 22₹12,185
31 Jan 23₹12,671

UTI Short Term Income Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹194,235.
Net Profit of ₹14,235
Invest Now

Returns for UTI Short Term Income Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Feb 23

DurationReturns
1 Month 0.5%
3 Month 1.7%
6 Month 2.9%
1 Year 4.3%
3 Year 7.4%
5 Year 4.9%
10 Year
15 Year
Since launch 6.5%
Historical performance (Yearly) on absolute basis
YearReturns
2022 3.8%
2021 8.4%
2020 10.5%
2019 -3.9%
2018 6%
2017 6.1%
2016 10.1%
2015 8.3%
2014 10.9%
2013 9%
Fund Manager information for UTI Short Term Income Fund
NameSinceTenure
Sudhir Agarwal25 Oct 1210.19 Yr.

Data below for UTI Short Term Income Fund as on 31 Dec 22

Asset Allocation
Asset ClassValue
Cash31.7%
Debt68.3%
Debt Sector Allocation
SectorValue
Corporate60.14%
Cash Equivalent21.1%
Government18.76%
Credit Quality
RatingValue
AA17.8%
AAA82.2%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
National Bank For Agriculture And Rural Development
Debentures | -
9%₹199 Cr2,000
↑ 2,000
Axis Finance Limited
Debentures | -
7%₹160 Cr1,600
Small Industries Development Bank Of India
Debentures | -
7%₹149 Cr1,500
7.38% Govt Stock 2027
Sovereign Bonds | -
4%₹101 Cr1,000,000,000
↓ -500,000,000
India Grid TRust
Debentures | -
3%₹74 Cr750
Mahindra Rural Housing Finance Limited
Debentures | -
3%₹69 Cr700
Can Fin Homes Limited
Debentures | -
3%₹63 Cr650
TATA Motors Finance Limited
Debentures | -
3%₹59 Cr600
Rural Electrification Corporation Limited
Debentures | -
2%₹51 Cr500
Shriram Finance Limited
Debentures | -
2%₹50 Cr500

3. BNP Paribas Short Term Fund

(Erstwhile BNP Paribas Short Term Income Fund)

The primary objective of the Scheme is to provide income consistent with the prudent risk from a portfolio comprising various debt and money market instruments. However, there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme / Plan(s) do not guarantee / indicate any returns.

BNP Paribas Short Term Fund is a Debt - Short term Bond fund was launched on 13 Sep 04. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 5.5% since its launch.  Ranked 41 in Short term Bond category. .

Below is the key information for BNP Paribas Short Term Fund

BNP Paribas Short Term Fund
Growth
Launch Date 13 Sep 04
NAV (11 Mar 22) ₹25.4771 ↓ -0.01   (-0.02 %)
Net Assets (Cr) ₹258 on 15 Feb 22
Category Debt - Short term Bond
AMC BNP Paribas Asset Mgmt India Pvt. Ltd
Rating
Risk Moderately Low
Expense Ratio 0.98
Sharpe Ratio 0.07
Information Ratio -0.85
Alpha Ratio -1.04
Min Investment 5,000
Min SIP Investment 300
Exit Load NIL
Yield to Maturity 5.16%
Effective Maturity 2 Years 3 Months
Modified Duration 1 Year 11 Months 26 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 18₹10,000
31 Jan 19₹10,676
31 Jan 20₹11,457
31 Jan 21₹12,498
31 Jan 22₹12,954

BNP Paribas Short Term Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for BNP Paribas Short Term Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Feb 23

DurationReturns
1 Month 0.2%
3 Month 0.6%
6 Month 1.3%
1 Year 4.6%
3 Year 6.5%
5 Year 6.6%
10 Year
15 Year
Since launch 5.5%
Historical performance (Yearly) on absolute basis
YearReturns
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
Fund Manager information for BNP Paribas Short Term Fund
NameSinceTenure

Data below for BNP Paribas Short Term Fund as on 15 Feb 22

Asset Allocation
Asset ClassValue
Debt Sector Allocation
SectorValue
Credit Quality
RatingValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

4. Aditya Birla Sun Life Short Term Opportunities Fund

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 CAGR/Annualized return of 7.2% since its launch.  Ranked 18 in Short term Bond category.  Return for 2022 was 4.2% , 2021 was 3.8% and 2020 was 11.1% .

Below is the key information for Aditya Birla Sun Life Short Term Opportunities Fund

Aditya Birla Sun Life Short Term Opportunities Fund
Growth
Launch Date 9 May 03
NAV (03 Feb 23) ₹39.7055 ↑ 0.01   (0.03 %)
Net Assets (Cr) ₹5,007 on 31 Dec 22
Category Debt - Short term Bond
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderate
Expense Ratio 1.11
Sharpe Ratio -0.69
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 7.81%
Effective Maturity 2 Years
Modified Duration 1 Year 7 Months 13 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 18₹10,000
31 Jan 19₹10,668
31 Jan 20₹11,573
31 Jan 21₹12,799
31 Jan 22₹13,335
31 Jan 23₹13,919

Aditya Birla Sun Life Short Term Opportunities Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for Aditya Birla Sun Life Short Term Opportunities Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Feb 23

DurationReturns
1 Month 0.5%
3 Month 1.7%
6 Month 2.7%
1 Year 4.8%
3 Year 6.3%
5 Year 6.9%
10 Year
15 Year
Since launch 7.2%
Historical performance (Yearly) on absolute basis
YearReturns
2022 4.2%
2021 3.8%
2020 11.1%
2019 8.5%
2018 6.5%
2017 5.6%
2016 11.3%
2015 8.4%
2014 11.3%
2013 10.1%
Fund Manager information for Aditya Birla Sun Life Short Term Opportunities Fund
NameSinceTenure
Kaustubh Gupta11 Sep 148.31 Yr.
Mohit Sharma6 Aug 202.41 Yr.

Data below for Aditya Birla Sun Life Short Term Opportunities Fund as on 31 Dec 22

Asset Allocation
Asset ClassValue
Cash24.08%
Debt75.92%
Debt Sector Allocation
SectorValue
Corporate56.69%
Government30.1%
Cash Equivalent10.13%
Securitized3.08%
Credit Quality
RatingValue
AA23.23%
AAA76.77%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.26% Govt Stock 2032
Sovereign Bonds | -
6%₹319 Cr32,011,700
↑ 11,500,000
Housing Development Finance Corporation Ltd
Debentures | -
3%₹149 Cr1,500
Shriram Finance Limited
Debentures | -
3%₹141 Cr1,400
State Bank Of India
Debentures | -
3%₹140 Cr1,450
Bajaj Housing Finance Limited
Debentures | -
3%₹137 Cr1,400
State Bank Of India
Debentures | -
2%₹121 Cr1,204
06.90 OIL SPL 2026
Domestic Bonds | -
2%₹103 Cr10,397,000
Bharti Telecom Limited
Debentures | -
2%₹100 Cr1,000
7.42% Govt Stock 2033
Sovereign Bonds | -
2%₹100 Cr10,000,000
Sundew Properties Limited
Debentures | -
2%₹99 Cr1,020

5. ICICI Prudential Short Term Fund

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 CAGR/Annualized return of 7.9% since its launch.  Ranked 11 in Short term Bond category.  Return for 2022 was 4.7% , 2021 was 3.9% and 2020 was 10.6% .

Below is the key information for ICICI Prudential Short Term Fund

ICICI Prudential Short Term Fund
Growth
Launch Date 25 Oct 01
NAV (03 Feb 23) ₹49.9643 ↑ 0.01   (0.02 %)
Net Assets (Cr) ₹15,528 on 31 Dec 22
Category Debt - Short term Bond
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 1.14
Sharpe Ratio -0.28
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 7.85%
Effective Maturity 4 Years 8 Months 19 Days
Modified Duration 1 Year 4 Months 20 Days

Growth of 10,000 investment over the years.

DateValue
31 Jan 18₹10,000
31 Jan 19₹10,616
31 Jan 20₹11,651
31 Jan 21₹12,805
31 Jan 22₹13,298
31 Jan 23₹13,968

ICICI Prudential Short Term Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹200,132.
Net Profit of ₹20,132
Invest Now

Returns for ICICI Prudential Short Term Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Feb 23

DurationReturns
1 Month 0.5%
3 Month 1.7%
6 Month 3.3%
1 Year 5.6%
3 Year 6.2%
5 Year 7%
10 Year
15 Year
Since launch 7.9%
Historical performance (Yearly) on absolute basis
YearReturns
2022 4.7%
2021 3.9%
2020 10.6%
2019 9.7%
2018 5.8%
2017 5.9%
2016 11.1%
2015 8%
2014 11.6%
2013 7.2%
Fund Manager information for ICICI Prudential Short Term Fund
NameSinceTenure
Manish Banthia19 Nov 0913.13 Yr.
Nikhil Kabra29 Dec 202.01 Yr.

Data below for ICICI Prudential Short Term Fund as on 31 Dec 22

Asset Allocation
Asset ClassValue
Cash20.45%
Debt79.55%
Debt Sector Allocation
SectorValue
Corporate49.3%
Government40.62%
Cash Equivalent9.22%
Securitized0.86%
Credit Quality
RatingValue
AA16.66%
AAA83.34%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.42% Govt Stock 2033
Sovereign Bonds | -
11%₹1,690 Cr169,624,650
7.38% Govt Stock 2027
Sovereign Bonds | -
8%₹1,325 Cr131,199,900
7.69% Govt Stock 2034
Sovereign Bonds | -
6%₹938 Cr95,824,740
7.01% Govt Stock 2028
Sovereign Bonds | -
5%₹717 Cr72,756,299
Pipeline Infrastructure Limited
Debentures | -
3%₹420 Cr4,129
Small Industries Development Bank Of India
Debentures | -
2%₹301 Cr3,000
6.69% Govt Stock 2024
Sovereign Bonds | -
2%₹249 Cr25,000,000
Godrej Industries Limited
Debentures | -
1%₹221 Cr2,250
Jamnagar Utilities & Power Private Limited
Debentures | -
1%₹201 Cr2,000
Power Finance Corporation Ltd.
Debentures | -
1%₹200 Cr2,000

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?

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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!

Disclaimer:
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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