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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 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 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 (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 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 ₹397.746
↑ 0.22 ₹16,489 1.5 3.2 7.6 7.6 8.5 6.5% 5M 19D 6M 18D Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹27.5296
↑ 0.02 ₹15,040 -2.1 0.2 4.6 7.3 9.6 9.48% 5M 23D 6M 25D UTI Ultra Short Term Fund Growth ₹3,106.84
↑ 2.41 ₹2,043 1.1 2.7 2.4 5.3 3.3 0% 5M 2D ICICI Prudential Ultra Short Term Fund Growth ₹20.3791
↑ 0.01 ₹8,612 1.6 3.6 7.8 7.5 8.4 7.2% 5M 1D 5M 26D SBI Magnum Ultra Short Duration Fund Growth ₹4,450.85
↑ 2.64 ₹14,116 1.5 3.2 7.2 7.4 8 0% Kotak Savings Fund Growth ₹32.1168
↑ 0.02 ₹12,951 1.5 3.1 7 7.2 7.8 6.04% 5M 12D 5M 23D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 3 Apr 20 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 (03 Apr 20) ₹397.746 ↑ 0.22 (0.06 %) Net Assets (Cr) ₹16,489 on 29 Feb 20 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.35 Sharpe Ratio 9.54 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 6.5% Effective Maturity 6 Months 18 Days Modified Duration 5 Months 19 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 15 ₹10,000 31 Mar 16 ₹10,884 31 Mar 17 ₹11,843 31 Mar 18 ₹12,700 31 Mar 19 ₹13,713 31 Mar 20 ₹14,774 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Apr 20 Duration Returns 1 Month 0.4% 3 Month 1.5% 6 Month 3.2% 1 Year 7.6% 3 Year 7.6% 5 Year 8.1% 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 5.23 Yr. Kaustubh Gupta 15 Jul 11 8.47 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 42.08% Debt 57.92% Debt Sector Allocation
Sector Value Corporate 56.49% Cash Equivalent 26.48% Government 16.79% Securitized 0.24% Credit Quality
Rating Value AA 12.57% AAA 87.43% Top Securities Holdings / Portfolio
Name Holding Value Quantity Power Finance Corporation Ltd.
Debentures | -4% ₹724 Cr 7,200
↑ 2,550 National Bank For Agriculture And Rural Development
Commercial Paper | -4% ₹683 Cr 14,000
↑ 14,000 Reliance Industries Limited
Debentures | -3% ₹542 Cr 5,400
↑ 4,250 Reliance Jio Infocomm Limited
Commercial Paper | -3% ₹492 Cr 10,000
↑ 10,000 Reliance Retail Limited
Commercial Paper | -3% ₹425 Cr 8,500 6.25% Indusind Bank Limited (26/03/2020)
Net Current Assets | -2% ₹400 Cr The Tata Power Company Limited
Commercial Paper | -2% ₹393 Cr 8,000 Shriram Transport Finance Company Limited
Debentures | -2% ₹349 Cr 3,500
↑ 3,500 IndusInd Bank Limited
Certificate of Deposit | -2% ₹330 Cr 35,000
↑ 35,000 Rec Limited
Debentures | -2% ₹326 Cr 3,250 2. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized return of 8.6% since its launch. Return for 2019 was 9.6% , 2018 was 8.7% and 2017 was 8.2% . Franklin India Ultra Short Bond Fund - Super Institutional Plan
Growth Launch Date 18 Dec 07 NAV (03 Apr 20) ₹27.5296 ↑ 0.02 (0.09 %) Net Assets (Cr) ₹15,040 on 29 Feb 20 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.42 Sharpe Ratio 0.39 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 9.48% Effective Maturity 6 Months 25 Days Modified Duration 5 Months 23 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 15 ₹10,000 31 Mar 16 ₹10,963 31 Mar 17 ₹12,008 31 Mar 18 ₹12,972 31 Mar 19 ₹14,167 31 Mar 20 ₹14,834 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 3 Apr 20 Duration Returns 1 Month 0.8% 3 Month -2.1% 6 Month 0.2% 1 Year 4.6% 3 Year 7.3% 5 Year 8.2% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 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% 2010 5.9% Fund Manager information for Franklin India Ultra Short Bond Fund - Super Institutional Plan
Name Since Tenure Santosh Kamath 25 Oct 18 1.18 Yr. Pallab Roy 1 Jun 08 11.59 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 23.54% Debt 76.46% Debt Sector Allocation
Sector Value Corporate 76.8% Cash Equivalent 22.2% Government 1% Credit Quality
Rating Value A 17.74% AA 69.2% AAA 13.06% Top Securities Holdings / Portfolio
Name Holding Value Quantity Vedanta Limited
Debentures | -5% ₹795 Cr 7,900 Call, Cash & Other Assets
Net Current Assets | -4% ₹638 Cr Bharti Airtel Limited
Debentures | -4% ₹553 Cr 5,500 JM FINANCIAL CREDIT SOLUTIONS LIMITED
Debentures | -4% ₹540 Cr 5,400 Indostar Capital Finance Limited
Debentures | -3% ₹439 Cr 4,400 Bharti Airtel Limited
Debentures | -3% ₹400 Cr 4,000 INDOSTAR CAPITAL FINANCE LIMITED
Debentures | -3% ₹390 Cr 3,900 NIRCHEM Cement Limited
Debentures | -3% ₹378 Cr 3,750 EDELWEISS COMMODITIES SERVICES LIMITED
Debentures | -2% ₹371 Cr 7,500 EDELWEISS COMMODITIES SERVICES LIMITED
Debentures | -2% ₹361 Cr 3,650 3. UTI Ultra Short Term Fund
CAGR/Annualized return of 7.1% 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 (03 Apr 20) ₹3,106.84 ↑ 2.41 (0.08 %) Net Assets (Cr) ₹2,043 on 29 Feb 20 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.99 Sharpe Ratio -0.07 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 2,500 Exit Load NIL Yield to Maturity 0% Effective Maturity 5 Months 2 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 31 Mar 15 ₹10,000 31 Mar 16 ₹10,857 31 Mar 17 ₹11,779 31 Mar 18 ₹12,531 31 Mar 19 ₹13,438 31 Mar 20 ₹13,773 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Apr 20 Duration Returns 1 Month 0.5% 3 Month 1.1% 6 Month 2.7% 1 Year 2.4% 3 Year 5.3% 5 Year 6.6% 10 Year 15 Year Since launch 7.1% 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 4.5 Yr. Ritesh Nambiar 1 Jul 15 4.5 Yr. Data below for UTI Ultra Short Term Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 76.28% Debt 23.72% Debt Sector Allocation
Sector Value Corporate 50.56% Cash Equivalent 31.94% Government 17.5% Credit Quality
Rating Value A 10.72% AA 16.94% AAA 72.34% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -14% ₹290 Cr 00 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -7% ₹147 Cr 1,500,000,000 Edelweiss Commodities Services Limited
Debentures | -7% ₹141 Cr 1,500 REC LIMITED
Debentures | -6% ₹126 Cr 1,250
↑ 1,250 Andhra Bank
Certificate of Deposit | -6% ₹125 Cr 1,250,000,000 AXIS BANK LIMITED
Certificate of Deposit | -6% ₹123 Cr 1,250,000,000 National Bank For Agriculture And Rural Development
Certificate of Deposit | -6% ₹122 Cr 1,250,000,000 Avanse Financial Services Limited
Debentures | -5% ₹100 Cr 1,000
↓ -1,350 Reliance Jio Infocomm Limited
Commercial Paper | -5% ₹99 Cr 1,000,000,000
↑ 1,000,000,000 ORIENTAL BANK OF COMMERCE
Certificate of Deposit | -5% ₹98 Cr 1,000,000,000 4. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized return of 8.3% 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 (03 Apr 20) ₹20.3791 ↑ 0.01 (0.06 %) Net Assets (Cr) ₹8,612 on 29 Feb 20 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 1.09 Sharpe Ratio 11.84 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 7.2% Effective Maturity 5 Months 26 Days Modified Duration 5 Months 1 Day Growth of 10,000 investment over the years.
Date Value 31 Mar 15 ₹10,000 31 Mar 16 ₹10,895 31 Mar 17 ₹11,924 31 Mar 18 ₹12,752 31 Mar 19 ₹13,732 31 Mar 20 ₹14,819 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Apr 20 Duration Returns 1 Month 0.4% 3 Month 1.6% 6 Month 3.6% 1 Year 7.8% 3 Year 7.5% 5 Year 8.2% 10 Year 15 Year Since launch 8.3% 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 3.13 Yr. Ritesh Lunawat 15 Jun 17 2.55 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 35.28% Debt 64.72% Debt Sector Allocation
Sector Value Corporate 64.97% Cash Equivalent 26.01% Government 8.34% Securitized 0.68% Credit Quality
Rating Value A 6.17% AA 45.36% AAA 48.47% Top Securities Holdings / Portfolio
Name Holding Value Quantity Treps
CBLO/Reverse Repo | -7% ₹630 Cr Nabha Power Limited
Debentures | -3% ₹226 Cr 2,250 NIRCHEM Cement Limited
Debentures | -2% ₹207 Cr 2,060 MANAPPURAM FINANCE LIMITED
Debentures | -2% ₹204 Cr 2,000 JSW Energy Limited
Debentures | -2% ₹200 Cr 2,000 IndusInd Bank Limited
Certificate of Deposit | -2% ₹189 Cr 20,000
↑ 20,000 Power Finance Corporation Ltd.
Debentures | -2% ₹176 Cr 1,750 NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Debentures | -2% ₹151 Cr 1,500 Tata Value Homes Limited
Debentures | -2% ₹151 Cr 1,500 Aspire Home Finance Corporation Limited
Debentures | -2% ₹150 Cr 1,500 5. 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 (03 Apr 20) ₹4,450.85 ↑ 2.64 (0.06 %) Net Assets (Cr) ₹14,116 on 29 Feb 20 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.28 Sharpe Ratio 8.89 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment Exit Load NIL Yield to Maturity 0% Effective Maturity Modified Duration Growth of 10,000 investment over the years.
Date Value 31 Mar 15 ₹10,000 31 Mar 16 ₹10,822 31 Mar 17 ₹11,604 31 Mar 18 ₹12,383 31 Mar 19 ₹13,412 31 Mar 20 ₹14,393 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Apr 20 Duration Returns 1 Month 0.5% 3 Month 1.5% 6 Month 3.2% 1 Year 7.2% 3 Year 7.4% 5 Year 7.6% 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 9.67 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 60.94% Debt 39.06% Debt Sector Allocation
Sector Value Corporate 58.27% Cash Equivalent 25.1% Government 14.5% Securitized 2.14% Credit Quality
Rating Value AA 5.66% AAA 94.34% Top Securities Holdings / Portfolio
Name Holding Value Quantity Rural Electrification Corporation Limited
Debentures | -5% ₹723 Cr 7,250
↑ 7,250 IndusInd Bank Limited
Certificate of Deposit | -5% ₹688 Cr 70,000 Net Receivable / Payable
CBLO | -4% ₹517 Cr Reverse Repo
CBLO/Reverse Repo | -4% ₹500 Cr POWER FINANCE CORPORATION LIMITED
Debentures | -3% ₹430 Cr 4,250 Housing Development Finance Corporation Limited
Debentures | -3% ₹386 Cr 3,800
↑ 250 BANK OF BARODA
Certificate of Deposit | -2% ₹346 Cr 35,000 NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Certificate of Deposit | -2% ₹345 Cr 35,000 Andhra Bank
Certificate of Deposit | -2% ₹331 Cr 35,000
↑ 35,000 Muthoot Finance Limited
Debentures | -2% ₹301 Cr 3,000,000 6. 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 (03 Apr 20) ₹32.1168 ↑ 0.02 (0.07 %) Net Assets (Cr) ₹12,951 on 29 Feb 20 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.68 Sharpe Ratio 8.07 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 6.04% Effective Maturity 5 Months 23 Days Modified Duration 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Mar 15 ₹10,000 31 Mar 16 ₹10,843 31 Mar 17 ₹11,693 31 Mar 18 ₹12,473 31 Mar 19 ₹13,453 31 Mar 20 ₹14,411 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 3 Apr 20 Duration Returns 1 Month 0.5% 3 Month 1.5% 6 Month 3.1% 1 Year 7% 3 Year 7.2% 5 Year 7.6% 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 11.63 Yr. Data below for Kotak Savings Fund as on 29 Feb 20
Asset Allocation
Asset Class Value Cash 53.74% Debt 46.26% Debt Sector Allocation
Sector Value Corporate 55.88% Cash Equivalent 23.71% Government 18.09% Securitized 2.32% Credit Quality
Rating Value AA 10.46% AAA 89.54% Top Securities Holdings / Portfolio
Name Holding Value Quantity 8.27% Govt Stock 2020
Sovereign Bonds | -11% ₹1,482 Cr 147,000,000
↑ 147,000,000 LIC Housing Finance Limited
Commercial Paper | -4% ₹504 Cr 10,400 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -4% ₹499 Cr 10,300 IndusInd Bank Limited
Certificate of Deposit | -4% ₹493 Cr 50,000 IndusInd Bank Limited
Certificate of Deposit | -4% ₹493 Cr 50,000 SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Certificate of Deposit | -4% ₹489 Cr 50,000 Rural Electrification Corporation Limited
Debentures | -4% ₹460 Cr 4,550
↑ 1,450 Triparty Repo
CBLO/Reverse Repo | -3% ₹451 Cr National Bank For Agriculture And Rural Development
Commercial Paper | -3% ₹442 Cr 9,000
↓ -1,000 Axis Bank Limited
Certificate of Deposit | -3% ₹391 Cr 40,000
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!
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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Get deep insight of the funds. Better than moneycontrol and valuereserach sort of sites.
Very good information
Presentation is very good