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5 Best Short Duration (Short Term) Debt Mutual Funds 2020

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5 Best Short Duration (Short Term) Debt Funds To Invest In 2020

Updated on August 3, 2020 , 8472 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 20 - 21

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2019 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
HDFC Short Term Debt Fund Growth ₹23.8381
↑ 0.00
₹11,13856.611.68.89.76.71%2Y 7M 28D3Y 5M 16D
Axis Short Term Fund Growth ₹23.2531
↑ 0.00
₹7,1704.46.4118.39.85.23%2Y 2Y 4M 24D
IDFC Bond Fund Short Term Plan Growth ₹43.5893
↑ 0.00
₹12,7164.36.110.88.39.74.96%1Y 9M 25D2Y 29D
L&T Short Term Bond Fund Growth ₹20.4089
↑ 0.01
₹4,6943.66.410.78.29.35%2Y 4M 28D2Y 11M 19D
Kotak Bond Short Term Growth ₹39.9061
↑ 0.01
₹11,8584.16.210.78.19.65.51%3Y 4D3Y 9M 7D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 5 Aug 20
*List Funds based on Assets >= 100 Crore & Sorted on 3 Year CAGR Return.

1. HDFC Short Term Debt Fund

(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 CAGR/Annualized return of 9% since its launch.  Ranked 30 in Short term Bond category.  Return for 2019 was 9.7% , 2018 was 7% and 2017 was 6.5% .

Below is the key information for HDFC Short Term Debt Fund

HDFC Short Term Debt Fund
Growth
Launch Date 25 Jun 10
NAV (05 Aug 20) ₹23.8381 ↑ 0.00   (0.02 %)
Net Assets (Cr) ₹11,138 on 30 Jun 20
Category Debt - Short term Bond
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.4
Sharpe Ratio 3.84
Information Ratio 0.38
Alpha Ratio -2.39
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 6.71%
Effective Maturity 3 Years 5 Months 16 Days
Modified Duration 2 Years 7 Months 28 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 15₹10,000
31 Jul 16₹10,895
31 Jul 17₹11,791
31 Jul 18₹12,451
31 Jul 19₹13,600
31 Jul 20₹15,195

HDFC Short Term Debt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹206,148.
Net Profit of ₹26,148
Invest Now

Returns for HDFC Short Term Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Aug 20

DurationReturns
1 Month 1.2%
3 Month 5%
6 Month 6.6%
1 Year 11.6%
3 Year 8.8%
5 Year 8.7%
10 Year
15 Year
Since launch 9%
Historical performance (Yearly) on absolute basis
YearReturns
2019 9.7%
2018 7%
2017 6.5%
2016 9.3%
2015 8.7%
2014 10.4%
2013 8.4%
2012 10.1%
2011 9.2%
2010
Fund Manager information for HDFC Short Term Debt Fund
NameSinceTenure
Anil Bamboli25 Jun 1010.02 Yr.
Chirag Dagli31 Jul 190.92 Yr.

Data below for HDFC Short Term Debt Fund as on 30 Jun 20

Asset Allocation
Asset ClassValue
Cash9.03%
Debt90.97%
Debt Sector Allocation
SectorValue
Corporate59.46%
Government28.76%
Cash Equivalent8.06%
Securitized3.72%
Credit Quality
RatingValue
A0.58%
AA14.39%
AAA84.99%
Below B0.05%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Treps - Tri-Party Repo
CBLO/Reverse Repo | -
4%₹425 Cr
Housing Development Finance Corporation Limited
Debentures | -
3%₹314 Cr3,000
Indinfravit Trust
Debentures | -
3%₹295 Cr2,900
State Bank Of India
Debentures | -
3%₹295 Cr2,750
State Bank Of India
Debentures | -
2%₹257 Cr2,500
Housing Development Finance Corporation Limited
Debentures | -
2%₹257 Cr2,500
Rural Electrification Corporation Limited
Debentures | -
2%₹256 Cr2,500
Mobil Trust Series 10 (PTC of pools from Shriram City Union Finance Ltd.)
Unlisted bonds | -
2%₹230 Cr5,000,000
Power Finance Corporation Ltd.
Debentures | -
2%₹207 Cr2,000
Mahanagar Telephone Nigam Limited
Debentures | -
2%₹187 Cr1,750

2. Axis Short Term Fund

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 CAGR/Annualized return of 8.3% since its launch.  Ranked 26 in Short term Bond category.  Return for 2019 was 9.8% , 2018 was 6.3% and 2017 was 5.9% .

Below is the key information for Axis Short Term Fund

Axis Short Term Fund
Growth
Launch Date 22 Jan 10
NAV (05 Aug 20) ₹23.2531 ↑ 0.00   (0.01 %)
Net Assets (Cr) ₹7,170 on 30 Jun 20
Category Debt - Short term Bond
AMC Axis Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.95
Sharpe Ratio 4.43
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 5.23%
Effective Maturity 2 Years 4 Months 24 Days
Modified Duration 2 Years

Growth of 10,000 investment over the years.

DateValue
31 Jul 15₹10,000
31 Jul 16₹10,896
31 Jul 17₹11,793
31 Jul 18₹12,348
31 Jul 19₹13,512
31 Jul 20₹15,010

Axis 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 ₹206,148.
Net Profit of ₹26,148
Invest Now

Returns for Axis 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 5 Aug 20

DurationReturns
1 Month 0.9%
3 Month 4.4%
6 Month 6.4%
1 Year 11%
3 Year 8.3%
5 Year 8.5%
10 Year
15 Year
Since launch 8.3%
Historical performance (Yearly) on absolute basis
YearReturns
2019 9.8%
2018 6.3%
2017 5.9%
2016 9.6%
2015 8.1%
2014 10%
2013 7.3%
2012 10.1%
2011 9.2%
2010
Fund Manager information for Axis Short Term Fund
NameSinceTenure
Devang Shah5 Nov 127.66 Yr.

Data below for Axis Short Term Fund as on 30 Jun 20

Asset Allocation
Asset ClassValue
Cash17.71%
Debt82.29%
Debt Sector Allocation
SectorValue
Corporate54.82%
Government31.48%
Cash Equivalent11.8%
Securitized1.9%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
GOVT STOCK
Sovereign Bonds | -
6%₹400 Cr37,000,000
↑ 17,500,000
Clearing Corporation Of India Ltd
CBLO | -
5%₹347 Cr
National Bank For Agriculture And Rural Development
Debentures | -
3%₹222 Cr2,150
↑ 2,150
7.26% Govt Stock 2029
Sovereign Bonds | -
3%₹206 Cr19,150,000
↑ 12,500,000
INDIA GRID TRUST
Debentures | -
3%₹188 Cr1,840
National Highways Authority Of India
Debentures | -
2%₹157 Cr1,500
182 DTB 19112020
Sovereign Bonds | -
2%₹148 Cr15,000,000
↑ 15,000,000
SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Debentures | -
2%₹144 Cr1,400
Hdb Financial Services Limited
Debentures | -
2%₹139 Cr1,350
LIC Housing Finance Limited
Debentures | -
2%₹119 Cr1,140

3. IDFC Bond Fund Short Term Plan

(Erstwhile IDFC Super Saver Income Fund - Short Term Plan)

The primary investment objective of the scheme is to seek to generate stable returns with a low-risk strategy by creating a portfolio that is invested in good quality fixed income & Money Market securities. However, there can be no assurance that the investment objectives of the scheme will be realized.

IDFC Bond Fund Short Term Plan is a Debt - Short term Bond fund was launched on 14 Dec 00. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.8% since its launch.  Ranked 47 in Short term Bond category.  Return for 2019 was 9.7% , 2018 was 6.5% and 2017 was 5.9% .

Below is the key information for IDFC Bond Fund Short Term Plan

IDFC Bond Fund Short Term Plan
Growth
Launch Date 14 Dec 00
NAV (05 Aug 20) ₹43.5893 ↑ 0.00   (0.01 %)
Net Assets (Cr) ₹12,716 on 30 Jun 20
Category Debt - Short term Bond
AMC IDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.79
Sharpe Ratio 4.18
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 4.96%
Effective Maturity 2 Years 29 Days
Modified Duration 1 Year 9 Months 25 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 15₹10,000
31 Jul 16₹10,866
31 Jul 17₹11,705
31 Jul 18₹12,230
31 Jul 19₹13,411
31 Jul 20₹14,880

IDFC Bond Fund Short Term Plan SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹206,148.
Net Profit of ₹26,148
Invest Now

Returns for IDFC Bond Fund Short Term Plan

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Aug 20

DurationReturns
1 Month 0.7%
3 Month 4.3%
6 Month 6.1%
1 Year 10.8%
3 Year 8.3%
5 Year 8.3%
10 Year
15 Year
Since launch 7.8%
Historical performance (Yearly) on absolute basis
YearReturns
2019 9.7%
2018 6.5%
2017 5.9%
2016 8.8%
2015 8.1%
2014 10.1%
2013 7.6%
2012 9.3%
2011 9.2%
2010 3.7%
Fund Manager information for IDFC Bond Fund Short Term Plan
NameSinceTenure
Suyash Choudhary11 Mar 119.31 Yr.

Data below for IDFC Bond Fund Short Term Plan as on 30 Jun 20

Asset Allocation
Asset ClassValue
Cash8.26%
Debt91.74%
Debt Sector Allocation
SectorValue
Corporate55.31%
Government37.54%
Cash Equivalent6.52%
Securitized0.64%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Reliance Industries Limited
Debentures | -
7%₹869 Cr84,000,000
INDIAN RAILWAY FINANCE CORPORATION LIMITED
Debentures | -
4%₹495 Cr45,000,000
Reliance Industries Limited
Debentures | -
3%₹430 Cr41,000,000
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Debentures | -
3%₹425 Cr39,400,000
Housing Development Finance Corporation Limited
Debentures | -
3%₹413 Cr39,500,000
Power Finance Corporation Limited
Debentures | -
3%₹395 Cr37,500,000
NTPC Limited
Debentures | -
3%₹392 Cr37,000,000
Net Current Assets
Net Current Assets | -
3%₹344 Cr
LIC Housing Finance Limited
Debentures | -
3%₹332 Cr32,500,000
Small Industries Development Bank Of India
Debentures | -
2%₹314 Cr29,450,000

4. L&T Short Term Bond Fund

(Erstwhile L&T Short Term Opportunities Fund)

The investment objective of the Scheme is to generate returns for investors with a short-term investment horizon by investing in fixed income securities of shorter term maturity.

L&T Short Term Bond Fund is a Debt - Short term Bond fund was launched on 27 Dec 11. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 8.6% since its launch.  Ranked 50 in Short term Bond category.  Return for 2019 was 9.3% , 2018 was 6.5% and 2017 was 5.8% .

Below is the key information for L&T Short Term Bond Fund

L&T Short Term Bond Fund
Growth
Launch Date 27 Dec 11
NAV (05 Aug 20) ₹20.4089 ↑ 0.01   (0.04 %)
Net Assets (Cr) ₹4,694 on 30 Jun 20
Category Debt - Short term Bond
AMC L&T Investment Management Ltd
Rating
Risk Moderately Low
Expense Ratio 0.78
Sharpe Ratio 4.98
Information Ratio 0
Alpha Ratio 0
Min Investment 10,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 5%
Effective Maturity 2 Years 11 Months 19 Days
Modified Duration 2 Years 4 Months 28 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 15₹10,000
31 Jul 16₹10,855
31 Jul 17₹11,697
31 Jul 18₹12,270
31 Jul 19₹13,392
31 Jul 20₹14,844

L&T Short Term Bond Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹206,148.
Net Profit of ₹26,148
Invest Now

Returns for L&T Short Term Bond Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Aug 20

DurationReturns
1 Month 0.7%
3 Month 3.6%
6 Month 6.4%
1 Year 10.7%
3 Year 8.2%
5 Year 8.2%
10 Year
15 Year
Since launch 8.6%
Historical performance (Yearly) on absolute basis
YearReturns
2019 9.3%
2018 6.5%
2017 5.8%
2016 8.7%
2015 8.2%
2014 10.4%
2013 8.1%
2012 10%
2011
2010
Fund Manager information for L&T Short Term Bond Fund
NameSinceTenure
Shriram Ramanathan30 May 164.09 Yr.
Jalpan Shah30 May 164.09 Yr.

Data below for L&T Short Term Bond Fund as on 30 Jun 20

Asset Allocation
Asset ClassValue
Cash5.82%
Debt94.18%
Debt Sector Allocation
SectorValue
Government66.62%
Corporate24.78%
Cash Equivalent5.82%
Securitized2.77%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.72% GS 2025
Sovereign Bonds | -
8%₹388 Cr35,127,600
↑ 127,600
GOVT STOCK
Sovereign Bonds | -
7%₹325 Cr30,000,000
↑ 5,000,000
Indian Oil Corporation Limited
Debentures | -
6%₹259 Cr2,500
NTPC Limited
Debentures | -
5%₹228 Cr2,150
NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Debentures | -
5%₹228 Cr2,110
7.35% Govt Stock 2024
Sovereign Bonds | -
5%₹217 Cr20,000,000
National Highways Authority Of India
Debentures | -
4%₹184 Cr1,750
↑ 250
Indian Railway Finance Corporation Limited
Debentures | -
4%₹182 Cr1,750
7.59% Govt Stock 2026
Sovereign Bonds | -
4%₹165 Cr15,000,000
↑ 15,000,000
National Highways Authority Of India
Debentures | -
3%₹156 Cr1,500

5. Kotak Bond Short Term

The investment objective of the Scheme is to provide reasonable returns and high level of liquidity by investing in debt instruments such as bonds, debentures and Government securities; and money market Instrument such as treasury bills,commercial papers, certificates of deposit, including repos in permitted securities of different maturities, so as to spread the risk across different kinds of issuers in the debt markets. The Scheme may invest in the call money/termmoney market in terms of RBI guidelines in this respect. To reduce the risk of the portfolio, the Scheme may also use various derivative and hedging products from time to time, in the manner permitted by SEBI. Subject to the maximum amount permitted from time to time, the Scheme may invest in offshoresecurities in the manner allowed by SEBI/RBI, provided such investments are in conformity with the investment objective of the Scheme and the prevailing guidelines and Regulations.

Kotak Bond Short Term is a Debt - Short term Bond fund was launched on 2 May 02. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.9% since its launch.  Ranked 42 in Short term Bond category.  Return for 2019 was 9.6% , 2018 was 6.3% and 2017 was 5.4% .

Below is the key information for Kotak Bond Short Term

Kotak Bond Short Term
Growth
Launch Date 2 May 02
NAV (05 Aug 20) ₹39.9061 ↑ 0.01   (0.03 %)
Net Assets (Cr) ₹11,858 on 30 Jun 20
Category Debt - Short term Bond
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately Low
Expense Ratio 0.39
Sharpe Ratio 4.47
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 5.51%
Effective Maturity 3 Years 9 Months 7 Days
Modified Duration 3 Years 4 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 15₹10,000
31 Jul 16₹10,897
31 Jul 17₹11,768
31 Jul 18₹12,277
31 Jul 19₹13,443
31 Jul 20₹14,881

Kotak Bond Short Term SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹206,148.
Net Profit of ₹26,148
Invest Now

Returns for Kotak Bond Short Term

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 5 Aug 20

DurationReturns
1 Month 0.9%
3 Month 4.1%
6 Month 6.2%
1 Year 10.7%
3 Year 8.1%
5 Year 8.3%
10 Year
15 Year
Since launch 7.9%
Historical performance (Yearly) on absolute basis
YearReturns
2019 9.6%
2018 6.3%
2017 5.4%
2016 9.7%
2015 8%
2014 10.2%
2013 7.3%
2012 9.7%
2011 8.2%
2010 4%
Fund Manager information for Kotak Bond Short Term
NameSinceTenure
Deepak Agrawal14 Apr 0812.22 Yr.

Data below for Kotak Bond Short Term as on 30 Jun 20

Asset Allocation
Asset ClassValue
Debt104.36%
Debt Sector Allocation
SectorValue
Government53.34%
Corporate48.32%
Securitized2.7%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Net Current Assets/(Liabilities)
Net Current Assets | -
14%-₹1,673 Cr
7.59% Govt Stock 2026
Sovereign Bonds | -
9%₹1,015 Cr92,500,000
↑ 48,500,000
Triparty Repo
CBLO/Reverse Repo | -
6%₹703 Cr
LIC Housing Finance Limited
Debentures | -
4%₹506 Cr4,850
↑ 1,700
GOVT STOCK
Sovereign Bonds | -
4%₹495 Cr48,000,000
↑ 40,500,000
GOVT STOCK
Sovereign Bonds | -
4%₹440 Cr40,500,000
↑ 500,000
GOVT STOCK
Sovereign Bonds | -
3%₹411 Cr38,000,000
↑ 8,000,000
Reverse Repo #
CBLO/Reverse Repo | -
3%₹404 Cr
Housing Development Finance Corporation Limited
Debentures | -
3%₹330 Cr3,250
↑ 3,250
07.82 AS SDL 2024
Sovereign Bonds | -
3%₹321 Cr29,600,000

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?

  1. Open Free Investment Account for Lifetime at Fincash.com.

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

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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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