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6 Best Ultra Short Term Mutual Funds 2021
Best Ultra short term funds are very short term Mutual Funds that invest in a combination of debt instruments including treasury bills, certificate of deposits, commercial papers and corporate Bonds. Generally, these funds have a residual maturity ranging from 6 months to 1 year.
Ultra Short Bond Funds generally offer good returns with very less market volatility. These funds are for investors who seek to invest money for say a month to a couple of months. Investors who are looking for better returns than Liquid Funds should prefer Investing in Ultra Short Term fund. But before investing in these funds, take a look at the best Ultra Short Term Funds for the financial year 2021-2022.
Why Best Ultra Short Term Funds Over Savings Account?
Conventional investors often restrict themselves from investing in Mutual Funds due to the market risks involved. They prefer Savings Account as they offer good returns with no volatility. Let's look at the illustration below to analyse the returns of both savings account and Ultra Short Funds to understand which is a better investment to choose.
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Illustration:
An investor invests INR 40,00,00 in both Ultra Short Term Funds and savings account with the interest rate 3.5% p.a. and 8% p.a. respectively. See how the returns differ-
| Saving Account | Ultra Short Funds |
|---|---|
| Amount Invested | 40,00,00 |
| Interest Earned (Profit) | 14,000 |
Taxation Breakup (Saving Account) @ 3.5%
| Tax Bracket | Tax | Net Income (Profit) |
|---|---|---|
| 5% | 200 | 13,800 |
| 20% | 800 | 13,200 |
| 30% | 1200 | 12,800 |
Taxation Breakup (Ultra Short Funds) @ 8%
| Tax Bracket | Tax | Net Income (Profit) |
|---|---|---|
| 5% | 3200 | 28,800 |
| 20% | 6400 | 25,600 |
| 30% | 9600 | 22,400 |
The above table clearly portrays the difference in the net income from savings accounts and ultra short term funds. Even the investors falling under the maximum tax bracket of 30% can avail returns of INR 22,400 by investing in ultra short term funds, which is much more than INR 12,800 offered by a savings account.
Top 6 Ultra Short Term Funds for Investments in India FY 21 - 22
To provide a combination of regular income and high liquidity by investing primarily in a mix of short term debt and money market instruments. Franklin India Ultra Short Bond Fund - Super Institutional Plan is a Debt - Ultrashort Bond fund was launched on 18 Dec 07. It is a fund with Moderate risk and has given a Below is the key information for Franklin India Ultra Short Bond Fund - Super Institutional Plan Returns up to 1 year are on (Erstwhile Reliance Liquid Fund - Cash 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 Ultra Short Duration Fund is a Debt - Ultrashort Bond fund was launched on 7 Dec 01. It is a fund with Low risk and has given a Below is the key information for Nippon India Ultra Short Duration Fund Returns up to 1 year are on (Erstwhile UTI - Floating Rate Fund - Short Term Plan) To generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments, fixed rate debt / money market instruments swapped for floating rate returns. The Scheme may also invest a portion of its net assets in fixed rate debt securities and money market instruments .However there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not guarantee / indicate any returns. UTI Ultra Short Term Fund is a Debt - Ultrashort Bond fund was launched on 29 Aug 03. It is a fund with Moderately Low risk and has given a Below is the key information for UTI Ultra Short Term Fund Returns up to 1 year are on (Erstwhile ICICI Prudential Regular Income Fund) The fund’s objective is to generate regular income through investments primarily in debt and money market instruments. As a secondary objective, the Scheme also seeks to generate long term capital appreciation from the portion of equity investments under the Scheme. ICICI Prudential Ultra Short Term Fund is a Debt - Ultrashort Bond fund was launched on 3 May 11. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Ultra Short Term Fund Returns up to 1 year are on The primary objective of the schemes is to generate regular income through investments in debt and money market instruments. Income maybe generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents. Aditya Birla Sun Life Savings Fund is a Debt - Ultrashort Bond fund was launched on 16 Apr 03. It is a fund with Moderately Low risk and has given a Below is the key information for Aditya Birla Sun Life Savings Fund Returns up to 1 year are on (Erstwhile SBI Magnum InstaCash Fund) To provide the investors an opportunity to earn returns through investment in
debt & money market securities, while having the benefit of a very high degree of liquidity. SBI Magnum Ultra Short Duration Fund is a Debt - Ultrashort Bond fund was launched on 21 May 99. It is a fund with Low risk and has given a Below is the key information for SBI Magnum Ultra Short Duration Fund Returns up to 1 year are on Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2020 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹31.2554
↑ 0.01 ₹804 3 5.3 9.1 7.9 4 0% 1Y 1M 2D Nippon India Ultra Short Duration Fund Growth ₹3,215.64
↓ -0.16 ₹3,116 3.4 5.8 8.6 4.9 4.9 4.5% 5M 16D 6M 26D UTI Ultra Short Term Fund Growth ₹3,351.44
↓ -0.36 ₹2,180 2.1 2.9 5 4.8 5.3 3.81% 5M 13D 5M 19D ICICI Prudential Ultra Short Term Fund Growth ₹22.0035
↓ 0.00 ₹10,652 1 2.2 4.5 6.8 6.5 4.29% 3M 18D 4M 24D Aditya Birla Sun Life Savings Fund Growth ₹431.56
↓ -0.03 ₹18,973 1.1 2.3 4.4 7 7 4.06% 6M 6M 4D SBI Magnum Ultra Short Duration Fund Growth ₹4,756
↓ -0.21 ₹12,277 0.9 1.8 3.6 6.3 5.9 3.55% 3M 22D 5M 26D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Sep 21 500 Crore and sorted on last 1 Year Return.
1. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized return of 8.6% since its launch. Return for 2020 was 4% , 2019 was 9.6% and 2018 was 8.7% . Franklin India Ultra Short Bond Fund - Super Institutional Plan
Growth Launch Date 18 Dec 07 NAV (24 Sep 21) ₹31.2554 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹804 on 31 Aug 21 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆ Risk Moderate Expense Ratio 0.52 Sharpe Ratio 3.13 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 0% Effective Maturity 1 Year 1 Month 2 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 31 Aug 16 ₹10,000 31 Aug 17 ₹10,917 31 Aug 18 ₹11,745 31 Aug 19 ₹12,895 31 Aug 20 ₹13,484 31 Aug 21 ₹14,670
Purchase not allowed Returns for Franklin India Ultra Short Bond Fund - Super Institutional Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Sep 21 Duration Returns 1 Month 1.1% 3 Month 3% 6 Month 5.3% 1 Year 9.1% 3 Year 7.9% 5 Year 8% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2020 4% 2019 9.6% 2018 8.7% 2017 8.2% 2016 9.7% 2015 9.7% 2014 10% 2013 10% 2012 10.3% 2011 9.4% Fund Manager information for Franklin India Ultra Short Bond Fund - Super Institutional Plan
Name Since Tenure Santosh Kamath 25 Oct 18 2.77 Yr. Pallab Roy 1 Jun 08 13.17 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 31 Aug 21
Asset Allocation
Asset Class Value Cash 34.82% Debt 65.18% Debt Sector Allocation
Sector Value Corporate 65.18% Cash Equivalent 34.82% Credit Quality
Rating Value A 58.93% AA 40.8% AAA 0.28% Top Securities Holdings / Portfolio
Name Holding Value Quantity SBI Overnight Fund Dir Gr
Investment Fund | -30% ₹367 Cr 1,083,233
↑ 343,828 Edelweiss Commodities Services Limited
Debentures | -26% ₹316 Cr 3,194
↓ -456 Clix Capital Services Private Limited
Debentures | -19% ₹225 Cr 2,350 Clix Capital Services Private Limited
Debentures | -16% ₹192 Cr 2,000 U.P. Power Corporation Limited
Debentures | -4% ₹47 Cr 938 JM Financial Credit Solutions Limited
Debentures | -0% ₹5 Cr 46 Edelweiss Agri Value Chain Limited
Debentures | -0% ₹4 Cr 70 Tata Motors Limited
Debentures | -0% ₹3 Cr 34 Reliance Ports and Terminals Limited
Debentures | -0% ₹2 Cr 22 Call, Cash & Other Assets
CBLO | -4% ₹49 Cr 2. Nippon India Ultra Short Duration Fund
CAGR/Annualized return of 6.1% since its launch. Ranked 62 in Ultrashort Bond category. Return for 2020 was 4.9% , 2019 was 0.9% and 2018 was 7.3% . Nippon India Ultra Short Duration Fund
Growth Launch Date 7 Dec 01 NAV (24 Sep 21) ₹3,215.64 ↓ -0.16 (0.00 %) Net Assets (Cr) ₹3,116 on 31 Aug 21 Category Debt - Ultrashort Bond AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Low Expense Ratio 1.09 Sharpe Ratio 1.96 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 4.5% Effective Maturity 6 Months 26 Days Modified Duration 5 Months 16 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 16 ₹10,000 31 Aug 17 ₹10,586 31 Aug 18 ₹11,278 31 Aug 19 ₹11,941 31 Aug 20 ₹11,991 31 Aug 21 ₹13,042 Returns for Nippon India Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Sep 21 Duration Returns 1 Month 0.3% 3 Month 3.4% 6 Month 5.8% 1 Year 8.6% 3 Year 4.9% 5 Year 5.4% 10 Year 15 Year Since launch 6.1% Historical performance (Yearly) on absolute basis
Year Returns 2020 4.9% 2019 0.9% 2018 7.3% 2017 5.8% 2016 6.8% 2015 7.6% 2014 8.4% 2013 8.5% 2012 9.2% 2011 9% Fund Manager information for Nippon India Ultra Short Duration Fund
Name Since Tenure Vivek Sharma 1 Oct 13 7.84 Yr. Kinjal Desai 25 May 18 3.19 Yr. Data below for Nippon India Ultra Short Duration Fund as on 31 Aug 21
Asset Allocation
Asset Class Value Cash 59.93% Debt 40.07% Debt Sector Allocation
Sector Value Cash Equivalent 58.26% Corporate 23.87% Government 17.87% Credit Quality
Rating Value A 0.69% AA 16.09% AAA 83.22% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 02122021
Sovereign Bonds | -7% ₹193 Cr 19,500,000 8.79% Govt Stock 2021
Sovereign Bonds | -3% ₹101 Cr 10,000,000 Telesonic Networks Limited
Debentures | -3% ₹75 Cr 750
↑ 750 8.35% Govt Stock 2022
Sovereign Bonds | -2% ₹72 Cr 7,000,000 8.75% Kerala SDL 2022
Sovereign Bonds | -2% ₹61 Cr 5,950,000 Shriram Transport Finance Company Limited
Debentures | -2% ₹56 Cr 550 Piramal Capital & Housing Finance Limited
Debentures | -2% ₹55 Cr 675 8.92% Karnataka SDL 2022
Sovereign Bonds | -2% ₹51 Cr 4,981,300 91 DTB 16092021
Sovereign Bonds | -2% ₹50 Cr 5,000,000 182 DTB 25112021
Sovereign Bonds | -2% ₹50 Cr 5,000,000 3. UTI Ultra Short Term Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2020 was 5.3% , 2019 was 3.3% and 2018 was 7% . UTI Ultra Short Term Fund
Growth Launch Date 29 Aug 03 NAV (24 Sep 21) ₹3,351.44 ↓ -0.36 (-0.01 %) Net Assets (Cr) ₹2,180 on 31 Aug 21 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.96 Sharpe Ratio 1.2 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 2,500 Exit Load NIL Yield to Maturity 3.81% Effective Maturity 5 Months 19 Days Modified Duration 5 Months 13 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 16 ₹10,000 31 Aug 17 ₹10,759 31 Aug 18 ₹11,440 31 Aug 19 ₹11,784 31 Aug 20 ₹12,543 31 Aug 21 ₹13,023 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Sep 21 Duration Returns 1 Month 1.5% 3 Month 2.1% 6 Month 2.9% 1 Year 5% 3 Year 4.8% 5 Year 5.6% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2020 5.3% 2019 3.3% 2018 7% 2017 6.6% 2016 8.9% 2015 8.5% 2014 8.8% 2013 9.8% 2012 9% 2011 8.2% Fund Manager information for UTI Ultra Short Term Fund
Name Since Tenure Sudhir Agarwal 1 Jul 15 6.09 Yr. Ritesh Nambiar 1 Jul 15 6.09 Yr. Data below for UTI Ultra Short Term Fund as on 31 Aug 21
Asset Allocation
Asset Class Value Cash 55.55% Debt 44.45% Debt Sector Allocation
Sector Value Cash Equivalent 49.06% Corporate 28.82% Government 22.12% Credit Quality
Rating Value AA 14.41% AAA 85.59% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 23122021
Sovereign Bonds | -6% ₹128 Cr 1,300,000,000 8.20% Govt Stock 2022
Sovereign Bonds | -5% ₹114 Cr 1,115,000,000 182 DTB 12112021
Sovereign Bonds | -4% ₹99 Cr 1,000,000,000
↑ 1,000,000,000 182 DTB 16122021
Sovereign Bonds | -4% ₹99 Cr 1,000,000,000 Hindalco Industries Limited
Debentures | -3% ₹78 Cr 750 182 DTB 25112021
Sovereign Bonds | -3% ₹74 Cr 750,000,000 Reliance Industries Limited
Debentures | -2% ₹51 Cr 500 Housing Development Finance Corporation Limited
Debentures | -2% ₹50 Cr 500 Power Finance Corporation Limited
Debentures | -2% ₹50 Cr 500 91 DTB 26082021
Sovereign Bonds | -2% ₹50 Cr 500,000,000 4. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized return of 7.9% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2020 was 6.5% , 2019 was 8.4% and 2018 was 7.5% . ICICI Prudential Ultra Short Term Fund
Growth Launch Date 3 May 11 NAV (24 Sep 21) ₹22.0035 ↓ 0.00 (0.00 %) Net Assets (Cr) ₹10,652 on 31 Aug 21 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.99 Sharpe Ratio 3.43 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Months (0.5%),1 Months and above(NIL) Yield to Maturity 4.29% Effective Maturity 4 Months 24 Days Modified Duration 3 Months 18 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 16 ₹10,000 31 Aug 17 ₹10,840 31 Aug 18 ₹11,526 31 Aug 19 ₹12,511 31 Aug 20 ₹13,444 31 Aug 21 ₹14,060 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Sep 21 Duration Returns 1 Month 0.3% 3 Month 1% 6 Month 2.2% 1 Year 4.5% 3 Year 6.8% 5 Year 7% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2020 6.5% 2019 8.4% 2018 7.5% 2017 6.9% 2016 9.8% 2015 9.1% 2014 14.8% 2013 3.1% 2012 9.4% 2011 Fund Manager information for ICICI Prudential Ultra Short Term Fund
Name Since Tenure Manish Banthia 15 Nov 16 4.71 Yr. Ritesh Lunawat 15 Jun 17 4.13 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 31 Aug 21
Asset Allocation
Asset Class Value Cash 47.61% Debt 52.39% Debt Sector Allocation
Sector Value Corporate 44.64% Cash Equivalent 42.25% Government 12.85% Securitized 0.26% Credit Quality
Rating Value A 2.29% AA 29.19% AAA 68.52% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 19082021
Sovereign Bonds | -6% ₹625 Cr 62,500,000 182 DTB 09122021
Sovereign Bonds | -5% ₹495 Cr 50,000,000 182 DTB 16122021
Sovereign Bonds | -5% ₹494 Cr 50,000,000 Embassy Office Parks Reit
Debentures | -3% ₹359 Cr 2,887 182 DTB 23122021
Sovereign Bonds | -3% ₹296 Cr 30,000,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹258 Cr 2,560 The Tata Power Company Limited
Debentures | -2% ₹220 Cr 2,084 Housing Development Finance Corporation Limited
Debentures | -2% ₹215 Cr 2,130 Reliance Ports and Terminals Limited
Debentures | -2% ₹202 Cr 2,019 Manappuram Finance Limited
Debentures | -2% ₹201 Cr 2,000 5. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2020 was 7% , 2019 was 8.5% and 2018 was 7.6% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (24 Sep 21) ₹431.56 ↓ -0.03 (-0.01 %) Net Assets (Cr) ₹18,973 on 31 Aug 21 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.47 Sharpe Ratio 2.43 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 4.06% Effective Maturity 6 Months 4 Days Modified Duration 6 Months Growth of 10,000 investment over the years.
Date Value 31 Aug 16 ₹10,000 31 Aug 17 ₹10,815 31 Aug 18 ₹11,518 31 Aug 19 ₹12,551 31 Aug 20 ₹13,513 31 Aug 21 ₹14,126 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Sep 21 Duration Returns 1 Month 0.3% 3 Month 1.1% 6 Month 2.3% 1 Year 4.4% 3 Year 7% 5 Year 7.1% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2020 7% 2019 8.5% 2018 7.6% 2017 7.2% 2016 9.2% 2015 8.9% 2014 9.7% 2013 9.5% 2012 9.7% 2011 9.2% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 11 Oct 14 6.81 Yr. Kaustubh Gupta 15 Jul 11 10.05 Yr. Monika Gandhi 22 Mar 21 0.36 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 31 Aug 21
Asset Allocation
Asset Class Value Cash 53.72% Debt 46.28% Debt Sector Allocation
Sector Value Cash Equivalent 43.56% Corporate 39.93% Government 16.51% Credit Quality
Rating Value AA 11.82% AAA 88.18% Top Securities Holdings / Portfolio
Name Holding Value Quantity 8.79% Govt Stock 2021
Sovereign Bonds | -11% ₹2,136 Cr 211,100,000 Reliance Industries Limited
Debentures | -4% ₹758 Cr 7,401 8.83% Govt Stock 2023
Sovereign Bonds | -3% ₹524 Cr 48,000,000 Citicorp Finance (India) Limited
Debentures | -3% ₹500 Cr 5,000 REC Limited
Debentures | -2% ₹414 Cr 4,050 Rural Electrification Corporation Limited
Debentures | -2% ₹318 Cr 3,150 Shriram Transport Finance Company Limited
Debentures | -1% ₹275 Cr 2,750 8.21% HR SDL Spl 2023
Domestic Bonds | -1% ₹244 Cr 23,000,000 Muthoot Finance Limited
Debentures | -1% ₹239 Cr 2,350 Rural Electrification Corporation Limited
Debentures | -1% ₹226 Cr 2,250 6. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized return of 7.2% since its launch. Return for 2020 was 5.9% , 2019 was 8% and 2018 was 7.9% . SBI Magnum Ultra Short Duration Fund
Growth Launch Date 21 May 99 NAV (24 Sep 21) ₹4,756 ↓ -0.21 (0.00 %) Net Assets (Cr) ₹12,277 on 31 Aug 21 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.49 Sharpe Ratio 0.52 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 3.55% Effective Maturity 5 Months 26 Days Modified Duration 3 Months 22 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 16 ₹10,000 31 Aug 17 ₹10,676 31 Aug 18 ₹11,446 31 Aug 19 ₹12,422 31 Aug 20 ₹13,267 31 Aug 21 ₹13,758 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Sep 21 Duration Returns 1 Month 0.2% 3 Month 0.9% 6 Month 1.8% 1 Year 3.6% 3 Year 6.3% 5 Year 6.5% 10 Year 15 Year Since launch 7.2% Historical performance (Yearly) on absolute basis
Year Returns 2020 5.9% 2019 8% 2018 7.9% 2017 6.6% 2016 7.7% 2015 8.3% 2014 9% 2013 9.3% 2012 9.3% 2011 8.7% Fund Manager information for SBI Magnum Ultra Short Duration Fund
Name Since Tenure Arun R. 1 Jul 21 0.08 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 31 Aug 21
Asset Allocation
Asset Class Value Cash 75.06% Debt 24.94% Debt Sector Allocation
Sector Value Cash Equivalent 61.68% Corporate 28.18% Government 10.15% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 09092021
Sovereign Bonds | -8% ₹998 Cr 100,000,000 182 DTB 12112021
Sovereign Bonds | -6% ₹744 Cr 75,000,000 Rural Electrification Corporation Limited
Debentures | -5% ₹631 Cr 6,250 8.20% Govt Stock 2022
Sovereign Bonds | -3% ₹409 Cr 40,000,000 8.79% Govt Stock 2021
Sovereign Bonds | -3% ₹405 Cr 40,000,000 Reliance Industries Limited
Debentures | -3% ₹353 Cr 3,450 9.05% M.P. GS 2021
Sovereign Bonds | -2% ₹303 Cr 30,000,000 05.54 MP SDL 2021
Sovereign Bonds | -2% ₹296 Cr 29,500,000 91 DTB 26082021
Sovereign Bonds | -2% ₹250 Cr 25,000,000 364 DTB 02092021
Sovereign Bonds | -2% ₹250 Cr 25,000,000
↑ 25,000,000
Features Of Ultra Short Term Funds
Fund Type: Open-ended
Fund Category: Debt fund
Minimum Amount: INR 5,000 - 10,000
Risk Involved: Low -risk
Redemption: T+1, meaning that if you register the redemption request before 3 PM, you shall get the redemption amount after a day. However, if the redemption request is sent after 3 PM, the redemption request shall be processed day after.
Things to Consider as an Investor
1. Risk
Unlike other debt funds, the ultra-short term funds are somewhat immune to interest rate risks because of the short maturity of their underlying assets. However, as compared to liquid funds, these funds are pretty risky. The investment strategy of the fund manager may introduce credit risk when he incorporates low-credit rated securities in the expectation of an upgrade in future. Moreover, the introduction of government securities may increase the volatility of the fund more than expected.
2. Return
An investor can expect returns of around 7-9% from this fund in a stable interest rate environment. This return is moderately higher than what a liquid fund offers. However, even though these funds are fixed-income havens, they may not offer guaranteed returns. You need to look at Yield to Maturity (ytm) to understand what to expect with the investments at the time of investment.
3. Cost
Ultra short-term funds charge a fee to manage your money called an expense ratio. Till now the Securities and Exchange Board of India (SEBI) had mandated the upper limit of expense ratio to be 2.25% (might change time to time). Considering the overall returns generated by these funds as compared to liquid funds, a long-term holding period and lower expense ratio would help in recovering the money gone out by way of interest rate fluctuations.
4. Investment Horizon
Ultra short-term funds earn from the coupon of short-term instruments. The prices of these securities may change on a day-to-day Basis and have a relatively longer maturity. These are much more volatile than liquid funds and a short time frame may seem inadequate to generate sufficient returns. As compared to liquid funds, you need to hold these funds for comparatively longer horizon owing to a higher average maturity of the underlying securities.
5. Financial Goals
You may use these funds for a variety of purposes. If you need to park money for a period of 3 months to a year, then these funds may come handy. Additionally, you may want these to transfer your funds to a riskier haven like Equity Funds. Put a lump sum in these funds and initiate a Systematic Transfer Plan (STP) to equity funds. You may look at them as an additional haven to be used as an emergency fund. If you need monthly income, then invest a portion of your superannuation portfolio in these and initiate a systematic withdrawal plan (SWP).
6. Taxation
Dividends of Ultra Short Term Funds in India are tax-free in the hands of the investor. The AMC deducts a Dividend Distribution Tax (DDT) on behalf of the investor before it sends the dividend to the investor. If the investor has invested in a growth fund and redeemed his/her investment within 1 year, he/she may have to pay Short Term Capital Gains Tax (STCG).
How to Invest in Ultra Short Term 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
In today’s time, people face financial insecurities every now and then. In such a case, smart investments made in Mutual Funds help. Ultra Short Term funds are one such Smart investment that offers good returns to investors in order to manage financial insecurities. So, invest in the best Ultra Short Term funds today!
The way to wealth is easy, spend less than you earn and INVEST the difference wisely!
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well explained and got to know which one i need to pick it p
Get deep insight of the funds. Better than moneycontrol and valuereserach sort of sites.
Very good information
Presentation is very good