+91-22-62820123
Table of Contents
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.
Talk to our investment specialist
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 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 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 ₹29.5015
↑ 0.01 ₹10,220 1.6 3.5 8.1 7.4 4 0% 6M 21D Aditya Birla Sun Life Savings Fund Growth ₹420.686
↑ 0.06 ₹16,118 0.7 2.2 6.2 7.5 7 4.15% 5M 12D 6M ICICI Prudential Ultra Short Term Fund Growth ₹21.4745
↑ 0.00 ₹8,495 0.9 2.4 5.8 7.3 6.5 5% 4M 17D 5M 8D SBI Magnum Ultra Short Duration Fund Growth ₹4,660.84
↑ 0.28 ₹11,019 0.7 1.9 5.3 7 5.9 3.89% 5M 1D 6M 7D Kotak Savings Fund Growth ₹33.6073
↑ 0.00 ₹12,326 0.7 1.8 5.2 6.8 5.8 3.9% 4M 17D 4M 24D UTI Ultra Short Term Fund Growth ₹3,248.54
↑ 0.02 ₹2,136 0.8 2.1 5.1 5 5.3 4.94% 4M 4M 3D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 26 Feb 21 500 Crore and sorted on last 1 Year Return.
1. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized return of 8.5% 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 (26 Feb 21) ₹29.5015 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹10,220 on 31 Jan 21 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆ Risk Moderate Expense Ratio 0.52 Sharpe Ratio 4.68 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 0% Effective Maturity 6 Months 21 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 31 Jan 16 ₹10,000 31 Jan 17 ₹10,994 31 Jan 18 ₹11,870 31 Jan 19 ₹12,948 31 Jan 20 ₹13,554 31 Jan 21 ₹14,680
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 26 Feb 21 Duration Returns 1 Month 0.6% 3 Month 1.6% 6 Month 3.5% 1 Year 8.1% 3 Year 7.4% 5 Year 8% 10 Year 15 Year Since launch 8.5% 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 2.27 Yr. Pallab Roy 1 Jun 08 12.68 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 31 Jan 21
Asset Allocation
Asset Class Value Cash 57.97% Debt 42.03% Debt Sector Allocation
Sector Value Cash Equivalent 57.97% Corporate 42.03% Credit Quality
Rating Value A 37.16% AA 62.79% AAA 0.05% Top Securities Holdings / Portfolio
Name Holding Value Quantity JM Financial Credit Solutions Limited
Debentures | -5% ₹533 Cr 5,400 Indostar Capital Finance Limited
Debentures | -4% ₹440 Cr 4,400 Edelweiss Commodities Services Limited
Debentures | -4% ₹372 Cr 7,500 Edelweiss Commodities Services Limited
Debentures | -4% ₹361 Cr 3,650 Bharti Telecom Limited
Debentures | -3% ₹307 Cr 2,400 Tata Realty and Infrastructure Limited
Debentures | -2% ₹236 Cr 2,000 Clix Capital Services Private Limited
Debentures | -2% ₹234 Cr 2,350 Indostar Capital Finance Limited
Debentures | -2% ₹217 Cr 2,167
↑ 2,167 Clix Capital Services Private Limited
Debentures | -2% ₹199 Cr 2,000 PNB Housing Finance Limited
Debentures | -2% ₹191 Cr 1,910 2. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.7% 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 (26 Feb 21) ₹420.686 ↑ 0.06 (0.01 %) Net Assets (Cr) ₹16,118 on 31 Jan 21 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.39 Sharpe Ratio 2.09 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 4.15% Effective Maturity 6 Months Modified Duration 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 16 ₹10,000 31 Jan 17 ₹10,972 31 Jan 18 ₹11,709 31 Jan 19 ₹12,638 31 Jan 20 ₹13,681 31 Jan 21 ₹14,575 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Feb 21 Duration Returns 1 Month 0.3% 3 Month 0.7% 6 Month 2.2% 1 Year 6.2% 3 Year 7.5% 5 Year 7.8% 10 Year 15 Year Since launch 7.7% 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 6.31 Yr. Kaustubh Gupta 15 Jul 11 9.56 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 31 Jan 21
Asset Allocation
Asset Class Value Cash 54.02% Debt 45.98% Debt Sector Allocation
Sector Value Corporate 46.08% Cash Equivalent 33.54% Government 19.98% Securitized 0.4% Credit Quality
Rating Value AA 10.27% AAA 89.73% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 04032021
Sovereign Bonds | -3% ₹499 Cr 50,000,000
↓ -20,000,000 364 DTB 07052021
Sovereign Bonds | -3% ₹496 Cr 50,000,000 Mahindra & Mahindra Financial Services Limited
Debentures | -3% ₹448 Cr 4,450 182 DTB 11032021
Sovereign Bonds | -2% ₹399 Cr 40,000,000 Shriram Transport Finance Company Limited
Debentures | -2% ₹376 Cr 3,750 8.83% Govt Stock 2023
Sovereign Bonds | -2% ₹337 Cr 30,500,000 REC Limited
Debentures | -2% ₹330 Cr 3,200 Rural Electrification Corporation Limited
Debentures | -2% ₹321 Cr 3,150
↑ 500 Muthoot Finance Limited
Debentures | -2% ₹242 Cr 2,350 Rural Electrification Corporation Limited
Debentures | -1% ₹230 Cr 2,250 3. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized return of 8.1% 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 (26 Feb 21) ₹21.4745 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹8,495 on 31 Jan 21 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.96 Sharpe Ratio 1.78 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 5% Effective Maturity 5 Months 8 Days Modified Duration 4 Months 17 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 16 ₹10,000 31 Jan 17 ₹11,028 31 Jan 18 ₹11,745 31 Jan 19 ₹12,653 31 Jan 20 ₹13,709 31 Jan 21 ₹14,539 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Feb 21 Duration Returns 1 Month 0.4% 3 Month 0.9% 6 Month 2.4% 1 Year 5.8% 3 Year 7.3% 5 Year 7.8% 10 Year 15 Year Since launch 8.1% 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 4.21 Yr. Ritesh Lunawat 15 Jun 17 3.63 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 31 Jan 21
Asset Allocation
Asset Class Value Cash 48.84% Debt 51.16% Debt Sector Allocation
Sector Value Corporate 72.3% Cash Equivalent 23.79% Government 3.91% Credit Quality
Rating Value A 1.53% AA 36.59% AAA 61.88% Top Securities Holdings / Portfolio
Name Holding Value Quantity REC Limited
Debentures | -3% ₹290 Cr 2,850 Reliance Ports and Terminals Limited
Debentures | -2% ₹209 Cr 2,019 Manappuram Finance Limited
Debentures | -2% ₹205 Cr 2,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹152 Cr 1,500 Tata Value Homes Limited
Debentures | -2% ₹151 Cr 1,500 Aspire Home Finance Corporation Limited
Debentures | -2% ₹149 Cr 1,500 Tata Realty and Infrastructure Limited
Debentures | -2% ₹147 Cr 1,250 Power Finance Corporation Limited
Debentures | -2% ₹137 Cr 1,350 Small Industries Development Bank of India
Debentures | -1% ₹126 Cr 1,250 Bharti Telecom Limited
Debentures | -1% ₹126 Cr 1,250 4. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized return of 7.3% 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 (26 Feb 21) ₹4,660.84 ↑ 0.28 (0.01 %) Net Assets (Cr) ₹11,019 on 31 Jan 21 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.52 Sharpe Ratio 1.95 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 3.89% Effective Maturity 6 Months 7 Days Modified Duration 5 Months 1 Day Growth of 10,000 investment over the years.
Date Value 31 Jan 16 ₹10,000 31 Jan 17 ₹10,757 31 Jan 18 ₹11,467 31 Jan 19 ₹12,399 31 Jan 20 ₹13,358 31 Jan 21 ₹14,090 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Feb 21 Duration Returns 1 Month 0.3% 3 Month 0.7% 6 Month 1.9% 1 Year 5.3% 3 Year 7% 5 Year 7% 10 Year 15 Year Since launch 7.3% 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 Rajeev Radhakrishnan 1 May 10 10.76 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 31 Jan 21
Asset Allocation
Asset Class Value Cash 61.66% Debt 38.34% Debt Sector Allocation
Sector Value Corporate 42.13% Cash Equivalent 30.42% Government 27.45% Credit Quality
Rating Value AA 1.85% AAA 98.15% Top Securities Holdings / Portfolio
Name Holding Value Quantity Rural Electrification Corporation Limited
Debentures | -6% ₹688 Cr 6,750 8.20% Govt Stock 2022
Sovereign Bonds | -4% ₹418 Cr 40,000,000 7.80% Govt Stock 2021
Sovereign Bonds | -4% ₹403 Cr 40,000,000 Mahindra & Mahindra Financial Services Limited
Debentures | -3% ₹379 Cr 3,000 05.54 MP SDL 2021
Sovereign Bonds | -3% ₹298 Cr 29,500,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹235 Cr 2,300 Housing Development Finance Corporation Limited
Debentures | -2% ₹229 Cr 2,250 06.10 KA SDL 2021
Sovereign Bonds | -2% ₹219 Cr 21,509,800 Muthoot Finance Limited
Debentures | -2% ₹190 Cr 1,880,000 GOI Floating Rate Bond 2024
Sovereign Bonds | -2% ₹186 Cr 18,800,000 5. Kotak Savings Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 44 in Ultrashort Bond category. Return for 2020 was 5.8% , 2019 was 7.8% and 2018 was 7.4% . Kotak Savings Fund
Growth Launch Date 13 Aug 04 NAV (26 Feb 21) ₹33.6073 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹12,326 on 31 Jan 21 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.48 Sharpe Ratio 1.84 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 3.9% Effective Maturity 4 Months 24 Days Modified Duration 4 Months 17 Days Growth of 10,000 investment over the years.
Date Value 31 Jan 16 ₹10,000 31 Jan 17 ₹10,839 31 Jan 18 ₹11,545 31 Jan 19 ₹12,430 31 Jan 20 ₹13,375 31 Jan 21 ₹14,104 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Feb 21 Duration Returns 1 Month 0.3% 3 Month 0.7% 6 Month 1.8% 1 Year 5.2% 3 Year 6.8% 5 Year 7.1% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2020 5.8% 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% Fund Manager information for Kotak Savings Fund
Name Since Tenure Deepak Agrawal 15 Apr 08 12.81 Yr. Data below for Kotak Savings Fund as on 31 Jan 21
Asset Allocation
Asset Class Value Cash 55.76% Debt 44.24% Debt Sector Allocation
Sector Value Cash Equivalent 38.19% Corporate 34.04% Government 27.43% Securitized 0.34% Credit Quality
Rating Value AA 9.04% AAA 90.96% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 03062021
Sovereign Bonds | -13% ₹1,577 Cr 159,500,000 7.94% Govt Stock 2021
Sovereign Bonds | -5% ₹570 Cr 56,250,000 364 DTB 29042021
Sovereign Bonds | -4% ₹546 Cr 55,000,000 Bharti Telecom Limited
Debentures | -4% ₹543 Cr 5,400 Housing Development Finance Corporation Limited
Debentures | -4% ₹482 Cr 4,750 5.09% Govt Stock 2022
Sovereign Bonds | -3% ₹385 Cr 38,000,000
↑ 27,200,000 91 DTB 01042021
Sovereign Bonds | -3% ₹316 Cr 31,750,000
↑ 31,750,000 Housing Development Finance Corporation Limited
Debentures | -2% ₹280 Cr 2,750 7.80% Govt Stock 2021
Sovereign Bonds | -2% ₹227 Cr 22,500,000
↓ -12,500,000 Rent a Device Trust
Unlisted bonds | -2% ₹222 Cr 1,754 6. UTI Ultra Short Term Fund
CAGR/Annualized return of 7% 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 (26 Feb 21) ₹3,248.54 ↑ 0.02 (0.00 %) Net Assets (Cr) ₹2,136 on 31 Jan 21 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.95 Sharpe Ratio 1.17 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 2,500 Exit Load NIL Yield to Maturity 4.94% Effective Maturity 4 Months 3 Days Modified Duration 4 Months Growth of 10,000 investment over the years.
Date Value 31 Jan 16 ₹10,000 31 Jan 17 ₹10,910 31 Jan 18 ₹11,605 31 Jan 19 ₹12,437 31 Jan 20 ₹12,833 31 Jan 21 ₹13,462 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Feb 21 Duration Returns 1 Month 0.3% 3 Month 0.8% 6 Month 2.1% 1 Year 5.1% 3 Year 5% 5 Year 6.1% 10 Year 15 Year Since launch 7% 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 5.59 Yr. Ritesh Nambiar 1 Jul 15 5.59 Yr. Data below for UTI Ultra Short Term Fund as on 31 Jan 21
Asset Allocation
Asset Class Value Cash 63.25% Debt 36.75% Debt Sector Allocation
Sector Value Cash Equivalent 43.5% Corporate 32% Government 24.5% Credit Quality
Rating Value A 9.92% AA 2.85% AAA 87.23% Top Securities Holdings / Portfolio
Name Holding Value Quantity 6.17% Govt Stock 2021
Sovereign Bonds | -11% ₹233 Cr 2,300,000,000
↑ 950,000,000 Edelweiss Commodities Services Limited
Debentures | -6% ₹125 Cr 1,250 91 DTB 29042021
Sovereign Bonds | -6% ₹119 Cr 1,200,000,000
↑ 1,200,000,000 364 DTB 29072021
Sovereign Bonds | -5% ₹98 Cr 1,000,000,000 Avanse Financial Services Limited
Debentures | -3% ₹65 Cr 650 Housing Development Finance Corporation Limited
Debentures | -2% ₹51 Cr 500 Power Finance Corporation Limited
Debentures | -2% ₹51 Cr 500 Tata Capital Housing Finance Limited
Debentures | -2% ₹50 Cr 500 364 DTB 03062021
Sovereign Bonds | -2% ₹49 Cr 500,000,000 National Bank For Agriculture and Rural Development
Debentures | -2% ₹41 Cr 400
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!
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.
AMFI Registration No. 112358 | CIN: U74999MH2016PTC282153
Shepard Technologies Pvt. Ltd. (with ARN code 112358) makes no warranties or representations, express or implied, on products offered through the platform. It accepts no liability for any damages or losses, however caused, in connection with the use of, or on the reliance of its product or related services. Terms and conditions of the website are applicable.
©2021 Shepard Technologies Private Limited. All Rights Reserved
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