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6 Best Ultra Short Term Mutual Funds 2020
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 2020-2021.
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 20 - 21
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 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 (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 (Erstwhile Kotak Treasury Advantage Fund) The investment objective of the Scheme is to generate returns through investments in debt and money market instruments with a view to reduce the interest rate risk. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. Kotak Savings Fund is a Debt - Ultrashort Bond fund was launched on 13 Aug 04. It is a fund with Moderately Low risk and has given a Below is the key information for Kotak Savings 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 Invesco India Medium Term Bond Fund) The objective is to generate regular income and capital appreciation by investing in a portfolio of medium term debt and money market instruments. Invesco India Ultra Short Term Fund is a Debt - Ultrashort Bond fund was launched on 30 Dec 10. It is a fund with Moderate risk and has given a Below is the key information for Invesco India Ultra Short Term Fund Returns up to 1 year are on Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2019 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Savings Fund Growth ₹417.837
↑ 0.07 ₹16,215 1.5 3.5 7.2 7.7 8.5 4.08% 5M 23D 6M 14D ICICI Prudential Ultra Short Term Fund Growth ₹21.2873
↑ 0.00 ₹8,266 1.5 3.5 6.8 7.5 8.4 4.85% 5M 1D 5M 23D SBI Magnum Ultra Short Duration Fund Growth ₹4,628.26
↑ 0.44 ₹14,207 1.1 2.5 6.1 7.4 8 3.67% 4M 20D 4M 28D Kotak Savings Fund Growth ₹33.3919
↑ 0.00 ₹13,539 1.1 2.6 6 7.1 7.8 3.7% 5M 8D 5M 19D UTI Ultra Short Term Fund Growth ₹3,221.65
↑ 0.33 ₹1,487 1.2 2.5 5.4 5.2 3.3 5.22% 4M 21D 4M 25D Invesco India Ultra Short Term Fund Growth ₹2,109.69
↑ 0.18 ₹704 0.9 2 5.3 6.7 7.6 3.63% 4M 30D 5M 6D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 27 Nov 20 500 Crore and sorted on last 1 Year Return.
1. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2019 was 8.5% , 2018 was 7.6% and 2017 was 7.2% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (27 Nov 20) ₹417.837 ↑ 0.07 (0.02 %) Net Assets (Cr) ₹16,215 on 31 Oct 20 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.35 Sharpe Ratio 2.45 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 4.08% Effective Maturity 6 Months 14 Days Modified Duration 5 Months 23 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 15 ₹10,000 31 Oct 16 ₹10,923 31 Oct 17 ₹11,765 31 Oct 18 ₹12,555 31 Oct 19 ₹13,701 31 Oct 20 ₹14,695 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Nov 20 Duration Returns 1 Month 0.5% 3 Month 1.5% 6 Month 3.5% 1 Year 7.2% 3 Year 7.7% 5 Year 8% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 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% 2010 5.8% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 11 Oct 14 6.06 Yr. Kaustubh Gupta 15 Jul 11 9.31 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 31 Oct 20
Asset Allocation
Asset Class Value Cash 51.71% Debt 48.29% Debt Sector Allocation
Sector Value Corporate 45.88% Cash Equivalent 33.78% Government 19.94% Securitized 0.4% Credit Quality
Rating Value AA 9.88% AAA 90.12% Top Securities Holdings / Portfolio
Name Holding Value Quantity Mahindra & Mahindra Financial Services Limited
Debentures | -3% ₹452 Cr 4,450 Shriram Transport Finance Company Limited
Debentures | -2% ₹373 Cr 3,750 REC Limited
Debentures | -2% ₹332 Cr 3,200 Rural Electrification Corporation Limited
Debentures | -2% ₹272 Cr 2,650 6.81% MH SDL 2020
Sovereign Bonds | -2% ₹260 Cr 26,000,000 Muthoot Finance Limited
Debentures | -1% ₹243 Cr 2,350 182 DTB 17122020
Sovereign Bonds | -1% ₹234 Cr 23,500,000 Reliance Industries Limited
Debentures | -1% ₹232 Cr 2,315 Rural Electrification Corporation Limited
Debentures | -1% ₹232 Cr 2,250 8.83% Govt Stock 2023
Sovereign Bonds | -1% ₹230 Cr 20,500,000
↑ 10,500,000 2. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized return of 8.2% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2019 was 8.4% , 2018 was 7.5% and 2017 was 6.9% . ICICI Prudential Ultra Short Term Fund
Growth Launch Date 3 May 11 NAV (27 Nov 20) ₹21.2873 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹8,266 on 31 Oct 20 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.96 Sharpe Ratio 2.34 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 4.85% Effective Maturity 5 Months 23 Days Modified Duration 5 Months 1 Day Growth of 10,000 investment over the years.
Date Value 31 Oct 15 ₹10,000 31 Oct 16 ₹10,945 31 Oct 17 ₹11,801 31 Oct 18 ₹12,563 31 Oct 19 ₹13,673 31 Oct 20 ₹14,633 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Nov 20 Duration Returns 1 Month 0.4% 3 Month 1.5% 6 Month 3.5% 1 Year 6.8% 3 Year 7.5% 5 Year 7.9% 10 Year 15 Year Since launch 8.2% Historical performance (Yearly) on absolute basis
Year Returns 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 2010 Fund Manager information for ICICI Prudential Ultra Short Term Fund
Name Since Tenure Manish Banthia 15 Nov 16 3.96 Yr. Ritesh Lunawat 15 Jun 17 3.38 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 31 Oct 20
Asset Allocation
Asset Class Value Cash 53.82% Debt 46.18% Debt Sector Allocation
Sector Value Corporate 62.21% Cash Equivalent 34.12% Government 3.68% Credit Quality
Rating Value A 2.52% AA 29.15% AAA 68.33% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 7012021
Sovereign Bonds | -4% ₹298 Cr 30,000,000
↑ 30,000,000 REC Limited
Debentures | -4% ₹293 Cr 2,850 Reliance Ports and Terminals Limited
Debentures | -3% ₹212 Cr 2,019 Manappuram Finance Limited
Debentures | -3% ₹207 Cr 2,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹153 Cr 1,500 Tata Value Homes Limited
Debentures | -2% ₹152 Cr 1,500 Housing Development Finance Corporation Limited
Debentures | -2% ₹151 Cr 1,500 Aspire Home Finance Corporation Limited
Debentures | -2% ₹151 Cr 1,500 LIC Housing Finance Limited
Debentures | -2% ₹146 Cr 1,450 Reliance Industries Limited
Debentures | -2% ₹141 Cr 1,400 3. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized return of 7.4% since its launch. Return for 2019 was 8% , 2018 was 7.9% and 2017 was 6.6% . SBI Magnum Ultra Short Duration Fund
Growth Launch Date 21 May 99 NAV (27 Nov 20) ₹4,628.26 ↑ 0.44 (0.01 %) Net Assets (Cr) ₹14,207 on 31 Oct 20 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.52 Sharpe Ratio 2.67 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 3.67% Effective Maturity 4 Months 28 Days Modified Duration 4 Months 20 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 15 ₹10,000 31 Oct 16 ₹10,781 31 Oct 17 ₹11,500 31 Oct 18 ₹12,350 31 Oct 19 ₹13,411 31 Oct 20 ₹14,249 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Nov 20 Duration Returns 1 Month 0.4% 3 Month 1.1% 6 Month 2.5% 1 Year 6.1% 3 Year 7.4% 5 Year 7.3% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 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% 2010 5.4% Fund Manager information for SBI Magnum Ultra Short Duration Fund
Name Since Tenure Rajeev Radhakrishnan 1 May 10 10.51 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 31 Oct 20
Asset Allocation
Asset Class Value Cash 68.7% Debt 31.3% Debt Sector Allocation
Sector Value Cash Equivalent 46.96% Corporate 30.63% Government 21.86% Securitized 0.56% Credit Quality
Rating Value AA 2.87% AAA 97.13% Top Securities Holdings / Portfolio
Name Holding Value Quantity Rural Electrification Corporation Limited
Debentures | -5% ₹692 Cr 6,750 364 DTB 29072021
Sovereign Bonds | -3% ₹488 Cr 50,000,000 8.20% Govt Stock 2022
Sovereign Bonds | -3% ₹422 Cr 40,000,000
↑ 40,000,000 91 DTB 03122020
Sovereign Bonds | -3% ₹399 Cr 40,000,000 364 DTB 22042021
Sovereign Bonds | -3% ₹394 Cr 40,000,000
↑ 40,000,000 Housing Development Finance Corporation Limited
Debentures | -3% ₹384 Cr 3,820
↑ 70 Mahindra & Mahindra Financial Services Limited
Debentures | -3% ₹376 Cr 3,000 182 DTB 04022021
Sovereign Bonds | -2% ₹347 Cr 35,000,000 91 DTB 14012021
Sovereign Bonds | -2% ₹298 Cr 30,000,000
↑ 30,000,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹237 Cr 2,300
↑ 1,800 4. Kotak Savings Fund
CAGR/Annualized return of 7.7% since its launch. Ranked 44 in Ultrashort Bond category. Return for 2019 was 7.8% , 2018 was 7.4% and 2017 was 6.7% . Kotak Savings Fund
Growth Launch Date 13 Aug 04 NAV (27 Nov 20) ₹33.3919 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹13,539 on 31 Oct 20 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.48 Sharpe Ratio 2.37 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 3.7% Effective Maturity 5 Months 19 Days Modified Duration 5 Months 8 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 15 ₹10,000 31 Oct 16 ₹10,815 31 Oct 17 ₹11,589 31 Oct 18 ₹12,352 31 Oct 19 ₹13,404 31 Oct 20 ₹14,230 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Nov 20 Duration Returns 1 Month 0.4% 3 Month 1.1% 6 Month 2.6% 1 Year 6% 3 Year 7.1% 5 Year 7.3% 10 Year 15 Year Since launch 7.7% Historical performance (Yearly) on absolute basis
Year Returns 2019 7.8% 2018 7.4% 2017 6.7% 2016 8.2% 2015 8.6% 2014 9.4% 2013 8.9% 2012 9.6% 2011 9.2% 2010 5.7% Fund Manager information for Kotak Savings Fund
Name Since Tenure Deepak Agrawal 15 Apr 08 12.56 Yr. Data below for Kotak Savings Fund as on 31 Oct 20
Asset Allocation
Asset Class Value Cash 53.75% Debt 46.25% Debt Sector Allocation
Sector Value Cash Equivalent 46.83% Corporate 32.65% Government 18.59% Securitized 1.93% Credit Quality
Rating Value AA 9.74% AAA 90.26% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.80% GOI Floating Rate Bonds 2020
Sovereign Bonds | -9% ₹1,272 Cr 127,100,000
↓ -5,000,000 182 DTB 06112020
Sovereign Bonds | -7% ₹1,005 Cr 100,500,000
↑ 100,500,000 Housing Development Finance Corporation Limited
Debentures | -5% ₹741 Cr 7,250
↑ 1,500 8.12% Govt Stock 2020
Sovereign Bonds | -5% ₹719 Cr 71,500,000 Bharti Telecom Limited
Debentures | -4% ₹548 Cr 5,400 Rural Electrification Corporation Limited
Debentures | -4% ₹526 Cr 5,100
↑ 1,000 5.09% Govt Stock 2022
Sovereign Bonds | -4% ₹503 Cr 49,500,000
↑ 49,500,000 182 DTB 18032021
Sovereign Bonds | -4% ₹494 Cr 50,000,000
↑ 50,000,000 Power Finance Corporation Limited
Debentures | -2% ₹321 Cr 3,050 Housing Development Finance Corporation Limited
Debentures | -2% ₹282 Cr 2,750
↑ 1,750 5. UTI Ultra Short Term Fund
CAGR/Annualized return of 7% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2019 was 3.3% , 2018 was 7% and 2017 was 6.6% . UTI Ultra Short Term Fund
Growth Launch Date 29 Aug 03 NAV (27 Nov 20) ₹3,221.65 ↑ 0.33 (0.01 %) Net Assets (Cr) ₹1,487 on 31 Oct 20 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.95 Sharpe Ratio 1.44 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 2,500 Exit Load NIL Yield to Maturity 5.22% Effective Maturity 4 Months 25 Days Modified Duration 4 Months 21 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 15 ₹10,000 31 Oct 16 ₹10,869 31 Oct 17 ₹11,646 31 Oct 18 ₹12,382 31 Oct 19 ₹12,848 31 Oct 20 ₹13,556 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Nov 20 Duration Returns 1 Month 0.4% 3 Month 1.2% 6 Month 2.5% 1 Year 5.4% 3 Year 5.2% 5 Year 6.2% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 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% 2010 5.4% Fund Manager information for UTI Ultra Short Term Fund
Name Since Tenure Sudhir Agarwal 1 Jul 15 5.34 Yr. Ritesh Nambiar 1 Jul 15 5.34 Yr. Data below for UTI Ultra Short Term Fund as on 31 Oct 20
Asset Allocation
Asset Class Value Cash 55.01% Debt 44.99% Debt Sector Allocation
Sector Value Corporate 50.17% Cash Equivalent 27.71% Government 22.11% Credit Quality
Rating Value A 13.87% AA 1.32% AAA 84.81% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.17% Govt Stock 2021
Sovereign Bonds | -9% ₹138 Cr 1,350,000,000
↑ 1,000,000,000 Edelweiss Commodities Services Limited
Debentures | -8% ₹122 Cr 1,250 364 DTB 04032021
Sovereign Bonds | -5% ₹74 Cr 750,000,000 Avanse Financial Services Limited
Debentures | -4% ₹65 Cr 650 8.12% Govt Stock 2020
Sovereign Bonds | -4% ₹55 Cr 550,000,000 Housing Development Finance Corporation Limited
Debentures | -3% ₹51 Cr 500 Power Finance Corporation Limited
Debentures | -3% ₹51 Cr 500
↑ 500 Tata Capital Housing Finance Limited
Debentures | -3% ₹51 Cr 500 National Bank For Agriculture and Rural Development
Debentures | -3% ₹41 Cr 400 HDB Financial Services Limited
Debentures | -2% ₹32 Cr 250 6. Invesco India Ultra Short Term Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 40 in Ultrashort Bond category. Return for 2019 was 7.6% , 2018 was 7.3% and 2017 was 7.1% . Invesco India Ultra Short Term Fund
Growth Launch Date 30 Dec 10 NAV (27 Nov 20) ₹2,109.69 ↑ 0.18 (0.01 %) Net Assets (Cr) ₹704 on 31 Oct 20 Category Debt - Ultrashort Bond AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆ Risk Moderate Expense Ratio 0.53 Sharpe Ratio 1.26 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 3.63% Effective Maturity 5 Months 6 Days Modified Duration 4 Months 30 Days Growth of 10,000 investment over the years.
Date Value 31 Oct 15 ₹10,000 31 Oct 16 ₹10,917 31 Oct 17 ₹11,771 31 Oct 18 ₹12,531 31 Oct 19 ₹13,574 31 Oct 20 ₹14,312 Returns for Invesco India Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Nov 20 Duration Returns 1 Month 0.3% 3 Month 0.9% 6 Month 2% 1 Year 5.3% 3 Year 6.7% 5 Year 7.4% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2019 7.6% 2018 7.3% 2017 7.1% 2016 9.1% 2015 8.3% 2014 10.1% 2013 6.1% 2012 8.9% 2011 8.2% 2010 Fund Manager information for Invesco India Ultra Short Term Fund
Name Since Tenure Sujoy Das 4 Jan 20 0.83 Yr. Krishna Cheemalapati 4 Jan 20 0.83 Yr. Data below for Invesco India Ultra Short Term Fund as on 31 Oct 20
Asset Allocation
Asset Class Value Cash 67.28% Debt 32.72% Debt Sector Allocation
Sector Value Cash Equivalent 49.13% Corporate 35.04% Government 15.83% Credit Quality
Rating Value AA 3.12% AAA 96.88% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 07012021
Sovereign Bonds | -6% ₹40 Cr 4,000,000 HDB Financial Services Limited
Debentures | -5% ₹38 Cr 3,000,000 8.66% Maharashtra GS 2021
Sovereign Bonds | -4% ₹31 Cr 3,005,600 Kotak Mahindra Prime Limited
Debentures | -4% ₹31 Cr 2,500,000 National Bank For Agriculture and Rural Development
Debentures | -4% ₹26 Cr 2,500,000 07.03% GJ SDL 2021
Sovereign Bonds | -4% ₹26 Cr 2,500,000 Housing and Urban Development Corporation Limited
Debentures | -4% ₹25 Cr 2,500,000 Small Industries Development Bank of India
Debentures | -4% ₹25 Cr 2,500,000 Reliance Industries Limited
Debentures | -4% ₹25 Cr 2,500,000 Reliance Ports and Terminals Limited
Debentures | -3% ₹23 Cr 2,200,000
↑ 2,200,000
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