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6 Best Ultra Short Term Mutual Funds 2019
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, some of the best Ultra Short Term Mutual Funds have a residual maturity ranging from 6 months to 1 year.
Ultra Short Bond Funds are one of the best short term investments that offer good returns with very less market volatility. The investors who are looking for better returns than Liquid Funds should prefer Investing in Ultra Short Term Mutual Funds, as the returns of these funds are better than that of Liquid Mutual funds. Ultra Short Term fund are for investors who seek to invest money for say a month to a couple of months.
But before investing in Ultra Short Funds it is important to look for best Ultra Short Term Funds as per the current scenario. For the financial year 2019-2020, we have listed best Ultra Short Term Funds below, take a look.
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 over Mutual Funds like Ultra Short Term Funds that offer good returns with very less volatility. So, we have illustrated an example below to analyse the returns of both savings account and Ultra Short Funds to understand which is a better investment.
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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 19 - 20
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 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 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 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 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 Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2018 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹26.9854
↑ 0.00 ₹18,337 2.3 4.7 9.7 8.9 8.7 0% 6M 18D Aditya Birla Sun Life Savings Fund Growth ₹378.827
↑ 0.15 ₹15,387 2.3 4.4 8.8 7.9 7.6 8.44% 5M 26D 6M 18D UTI Ultra Short Term Fund Growth ₹2,978.07
↑ 1.26 ₹5,226 -2 -0.3 3.4 5.9 7 9.35% 3M 19D 4M 24D SBI Magnum Ultra Short Duration Fund Growth ₹4,245.79
↑ 2.12 ₹8,143 2.1 4.1 8.5 7.5 7.9 7.48% 4M 13D 4M 24D ICICI Prudential Ultra Short Term Fund Growth ₹19.3537
↑ 0.00 ₹4,597 2.2 4.2 8.5 7.9 7.5 8.84% 4M 17D 6M 18D Kotak Savings Fund Growth ₹30.6802
↑ 0.01 ₹12,689 2.1 4.1 8.2 7.5 7.4 7.94% 5M 1D 5M 8D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 17 Jul 19 1. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized return of 9% since its launch. Return for 2018 was 8.7% , 2017 was 8.2% and 2016 was 9.7% . Franklin India Ultra Short Bond Fund - Super Institutional Plan
Growth Launch Date 18 Dec 07 NAV (17 Jul 19) ₹26.9854 ↑ 0.00 (0.02 %) Net Assets (Cr) ₹18,337 on 30 Apr 19 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.37 Sharpe Ratio 9.05 Information Ratio 3.51 Alpha Ratio -1.24 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 0% Effective Maturity 6 Months 18 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,978 30 Jun 16 ₹12,029 30 Jun 17 ₹13,155 30 Jun 18 ₹14,163 30 Jun 19 ₹15,519 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 17 Jul 19 Duration Returns 1 Month 0.8% 3 Month 2.3% 6 Month 4.7% 1 Year 9.7% 3 Year 8.9% 5 Year 9.2% 10 Year 15 Year Since launch 9% Historical performance (Yearly) on absolute basis
Year Returns 2018 8.7% 2017 8.2% 2016 9.7% 2015 9.7% 2014 10% 2013 10% 2012 10.3% 2011 9.4% 2010 5.9% 2009 6.1% Fund Manager information for Franklin India Ultra Short Bond Fund - Super Institutional Plan
Name Since Tenure Santosh Kamath 25 Oct 18 0.43 Yr. Pallab Roy 1 Jun 08 10.84 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 16.87% Debt 72.21% Other 10.91% Debt Sector Allocation
Sector Value Corporate 70.88% Cash Equivalent 16.32% Government 1.89% Credit Quality
Rating Value A 39.02% AA 42.42% AAA 18.55% Top Securities Holdings / Portfolio
Name Holding Value Quantity Call, Cash & Other Assets
Receivables | -11% ₹2,084 Cr Vodafone Mobile Services Limited
Debentures | -4% ₹772 Cr 7,990 Renew Power Ventures Private Limited
Debentures | -4% ₹674 Cr 6,740 DOLVI Minerals & Metals Private Limited
Debentures | -3% ₹659 Cr 3,780
↑ 3,000 Vedanta Limited
Debentures | -3% ₹597 Cr 5,950
↑ 2,770 REC LIMITED
Commercial Paper | -2% ₹452 Cr 9,500
↑ 9,500 Indostar Capital Finance Limited
Debentures | -2% ₹443 Cr 4,400 INDOSTAR CAPITAL FINANCE LIMITED
Debentures | -2% ₹391 Cr 3,900
↑ 3,900 REC LIMITED
Commercial Paper | -2% ₹391 Cr 8,000
↑ 2,000 EDELWEISS COMMODITIES SERVICES LIMITED
Debentures | -2% ₹374 Cr 7,500 2. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2018 was 7.6% , 2017 was 7.2% and 2016 was 9.2% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (17 Jul 19) ₹378.827 ↑ 0.15 (0.04 %) Net Assets (Cr) ₹15,387 on 30 Apr 19 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.35 Sharpe Ratio 9.37 Information Ratio 0.61 Alpha Ratio 3.2 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 8.44% Effective Maturity 6 Months 18 Days Modified Duration 5 Months 26 Days Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,929 30 Jun 16 ₹11,902 30 Jun 17 ₹12,918 30 Jun 18 ₹13,778 30 Jun 19 ₹14,956 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.9% 3 Month 2.3% 6 Month 4.4% 1 Year 8.8% 3 Year 7.9% 5 Year 8.5% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 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% 2009 5.8% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 11 Oct 14 4.31 Yr. Kaustubh Gupta 15 Jul 11 7.55 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 47.93% Debt 52.07% Debt Sector Allocation
Sector Value Cash Equivalent 47.93% Corporate 35.86% Government 12.26% Securitized 3.96% Credit Quality
Rating Value A 5.22% AA 14% AAA 80.79% Top Securities Holdings / Portfolio
Name Holding Value Quantity Vodafone Mobile Services Limited
Debentures | -5% ₹803 Cr 8,050 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -3% ₹485 Cr 10,000
↑ 10,000 Rural Electrification Corporation Limited
Debentures | -3% ₹477 Cr 4,750
↑ 3,150 PNB Housing Finance Limited
Debentures | -3% ₹398 Cr 4,000 PIRAMAL CAPITAL & HOUSING FINANCE LIMITED
Commercial Paper | -3% ₹398 Cr 8,000
↑ 8,000 Power Finance Corporation Ltd.
Debentures | -2% ₹394 Cr 3,950
↑ 1,500 LIC Housing Finance Limited
Debentures | -2% ₹361 Cr 3,600
↑ 3,600 NRSS XXIX TRANSMISSION LIMITED
Debentures | -2% ₹350 Cr 3,500 IndusInd Bank Limited
Certificate of Deposit | -2% ₹339 Cr 35,000 NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Certificate of Deposit | -2% ₹327 Cr 35,000
↑ 35,000 3. UTI Ultra Short Term Fund
CAGR/Annualized return of 7.1% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2018 was 7% , 2017 was 6.6% and 2016 was 8.9% . UTI Ultra Short Term Fund
Growth Launch Date 29 Aug 03 NAV (17 Jul 19) ₹2,978.07 ↑ 1.26 (0.04 %) Net Assets (Cr) ₹5,226 on 30 Apr 19 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 1.16 Sharpe Ratio 7.75 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 2,500 Exit Load NIL Yield to Maturity 9.35% Effective Maturity 4 Months 24 Days Modified Duration 3 Months 19 Days Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,872 30 Jun 16 ₹11,803 30 Jun 17 ₹12,751 30 Jun 18 ₹13,548 30 Jun 19 ₹14,015 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.5% 3 Month -2% 6 Month -0.3% 1 Year 3.4% 3 Year 5.9% 5 Year 7% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 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% 2009 6% Fund Manager information for UTI Ultra Short Term Fund
Name Since Tenure Sudhir Agarwal 1 Jul 15 3.75 Yr. Ritesh Nambiar 1 Jul 15 3.75 Yr. Data below for UTI Ultra Short Term Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 55.89% Debt 44.11% Debt Sector Allocation
Sector Value Cash Equivalent 50.61% Corporate 46.74% Government 2.65% Credit Quality
Rating Value A 13.31% AA 23.32% AAA 56.72% BBB 6.66% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -11% ₹423 Cr 00 Shriram Transport Finance Company Limited
Debentures | -7% ₹248 Cr 2,500 Avanse Financial Services Limited
Debentures | -6% ₹234 Cr 2,350 UTI Liquid Cash Plan Instl Dir Gr
Investment Fund | -5% ₹200 Cr 645,746
↓ -2,261,886 IVL Finance Limited
Commercial Paper | -5% ₹199 Cr 2,000,000,000 Edelweiss Commodities Services Limited
Debentures | -5% ₹196 Cr 2,000 Andhra Bank
Certificate of Deposit | -4% ₹166 Cr 1,750,000,000 Reliance Industries Limited
Commercial Paper | -4% ₹149 Cr 1,500,000,000 Business Broadcast News Holdings Limited
Debentures | -4% ₹147 Cr 1,500 SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Certificate of Deposit | -3% ₹126 Cr 1,350,000,000
↑ 1,350,000,000 4. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized return of 7.4% since its launch. Return for 2018 was 7.9% , 2017 was 6.6% and 2016 was 7.7% . SBI Magnum Ultra Short Duration Fund
Growth Launch Date 21 May 99 NAV (17 Jul 19) ₹4,245.79 ↑ 2.12 (0.05 %) Net Assets (Cr) ₹8,143 on 30 Apr 19 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.22 Sharpe Ratio 11.66 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment Exit Load NIL Yield to Maturity 7.48% Effective Maturity 4 Months 24 Days Modified Duration 4 Months 13 Days Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,877 30 Jun 16 ₹11,758 30 Jun 17 ₹12,566 30 Jun 18 ₹13,442 30 Jun 19 ₹14,550 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.8% 3 Month 2.1% 6 Month 4.1% 1 Year 8.5% 3 Year 7.5% 5 Year 7.8% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 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% 2009 4.8% Fund Manager information for SBI Magnum Ultra Short Duration Fund
Name Since Tenure Rajeev Radhakrishnan 1 May 10 9 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 74.79% Debt 25.21% Debt Sector Allocation
Sector Value Cash Equivalent 74.79% Corporate 21.88% Government 2.81% Securitized 0.52% Credit Quality
Rating Value AA 9.98% AAA 90.02% Top Securities Holdings / Portfolio
Name Holding Value Quantity NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Certificate of Deposit | -6% ₹469 Cr 50,000 BAJAJ FINANCE LIMITED
Commercial Paper | -4% ₹297 Cr 6,000 CITICORP FINANCE (INDIA) LIMITED
Debentures | -3% ₹250 Cr 2,500
↑ 2,500 ANDHRA BANK
Certificate of Deposit | -3% ₹235 Cr 25,000
↓ -5,000 BANK OF BARODA
Certificate of Deposit | -3% ₹235 Cr 25,000 Small Industries Development Bank Of India
Debentures | -3% ₹205 Cr 2,050
↑ 2,050 Cholamandalam Investment And Fin. Co. Ltd
Debentures | -3% ₹200 Cr 2,000
↑ 1,250 Indostar Capital Finance Limited
Debentures | -3% ₹200 Cr 2,000
↑ 700 Indostar Capital Finance Limited
Debentures | -3% ₹197 Cr 1,970
↑ 370 SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Certificate of Deposit | -2% ₹188 Cr 20,000 5. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized return of 8.4% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2018 was 7.5% , 2017 was 6.9% and 2016 was 9.8% . ICICI Prudential Ultra Short Term Fund
Growth Launch Date 3 May 11 NAV (17 Jul 19) ₹19.3537 ↑ 0.00 (0.02 %) Net Assets (Cr) ₹4,597 on 30 Apr 19 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 1.56 Sharpe Ratio 8.28 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 8.84% Effective Maturity 6 Months 18 Days Modified Duration 4 Months 17 Days Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹11,209 30 Jun 16 ₹12,237 30 Jun 17 ₹13,346 30 Jun 18 ₹14,209 30 Jun 19 ₹15,382 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.8% 3 Month 2.2% 6 Month 4.2% 1 Year 8.5% 3 Year 7.9% 5 Year 9.1% 10 Year 15 Year Since launch 8.4% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.5% 2017 6.9% 2016 9.8% 2015 9.1% 2014 14.8% 2013 3.1% 2012 9.4% 2011 2010 2009 Fund Manager information for ICICI Prudential Ultra Short Term Fund
Name Since Tenure Manish Banthia 15 Nov 16 2.62 Yr. Ritesh Lunawat 15 Jun 17 2.04 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 37.9% Debt 62.1% Debt Sector Allocation
Sector Value Corporate 52.08% Cash Equivalent 39.79% Government 6.6% Securitized 1.52% Credit Quality
Rating Value A 6.61% AA 60.5% AAA 32.89% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Debentures | -6% ₹266 Cr 2,650 Treps
CBLO/Reverse Repo | -5% ₹224 Cr Writers And Publishers Private Limited
Debentures | -4% ₹194 Cr 1,932
↓ -18 JSW Steel Limited
Debentures | -3% ₹161 Cr 1,595 Bahadur Chand Investments Private Limited
Debentures | -3% ₹150 Cr 1,500 Ashoka Buildcon Ltd.
Debentures | -3% ₹150 Cr 1,500 Aspire Home Finance Corporation Limited
Debentures | -3% ₹150 Cr 1,500 Manappuram Finance Limited
Debentures | -3% ₹148 Cr 1,481 LIC HOUSING FINANCE LIMITED
Commercial Paper | -3% ₹148 Cr 3,000
↑ 3,000 NIRCHEM Cement Limited
Debentures | -3% ₹147 Cr 1,465 6. Kotak Savings Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 44 in Ultrashort Bond category. Return for 2018 was 7.4% , 2017 was 6.7% and 2016 was 8.2% . Kotak Savings Fund
Growth Launch Date 13 Aug 04 NAV (17 Jul 19) ₹30.6802 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹12,689 on 30 Apr 19 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.39 Sharpe Ratio 8.26 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.94% Effective Maturity 5 Months 8 Days Modified Duration 5 Months 1 Day Growth of 10,000 investment over the years.
Date Value 30 Jun 14 ₹10,000 30 Jun 15 ₹10,907 30 Jun 16 ₹11,809 30 Jun 17 ₹12,716 30 Jun 18 ₹13,545 30 Jun 19 ₹14,630 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 17 Jul 19 Duration Returns 1 Month 0.8% 3 Month 2.1% 6 Month 4.1% 1 Year 8.2% 3 Year 7.5% 5 Year 8% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 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% 2009 5.9% Fund Manager information for Kotak Savings Fund
Name Since Tenure Deepak Agrawal 15 Apr 08 10.8 Yr. Data below for Kotak Savings Fund as on 30 Apr 19
Asset Allocation
Asset Class Value Cash 65.78% Debt 34.22% Debt Sector Allocation
Sector Value Cash Equivalent 71.35% Corporate 26.28% Securitized 2.27% Government 0.1% Credit Quality
Rating Value AA 10.4% AAA 89.6% Top Securities Holdings / Portfolio
Name Holding Value Quantity REC LIMITED
Commercial Paper | -4% ₹552 Cr 11,500
↑ 4,500 Bank Of Baroda
Certificate of Deposit | -4% ₹540 Cr 55,000
↑ 5,000 SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Commercial Paper | -4% ₹489 Cr 10,000 AXIS BANK LIMITED
Certificate of Deposit | -4% ₹489 Cr 50,000 Power Finance Corporation Ltd.
Debentures | -3% ₹407 Cr 4,050
↑ 1,000 Oriental Bank Of Commerce
Certificate of Deposit | -3% ₹393 Cr 40,000 INDUSIND BANK LIMITED
Certificate of Deposit | -3% ₹379 Cr 39,500 Triparty Repo
CBLO/Reverse Repo | -3% ₹367 Cr IDFC First Bank Limited
Certificate of Deposit | -3% ₹343 Cr 35,000 Bank Of Baroda
Debentures | -2% ₹309 Cr 3,083
↑ 890
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 debt 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 ultra short-term funds in an stable interest rate enviornment. If one compare this return rate to the other fund categories, you will see that these returns are moderately higher than what a liquid fund, for instance, can earn you over the same 1-9 month time horizon as Ultra short-term funds are riskier than liquid funds. Even though these funds are fixed-income havens, they don’t offer guaranteed returns. One need to look at Yield to Maturity (ytm) to understand what one can 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 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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