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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 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 (%) 2018 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹27.1882
↑ 0.01 ₹19,569 2.4 4.7 9.8 8.9 8.7 7.14% 5M 16D 6M 18D Aditya Birla Sun Life Savings Fund Growth ₹381.349
↑ 0.15 ₹15,270 2.4 4.5 8.9 7.8 7.6 8.12% 6M 7D 7M 2D UTI Ultra Short Term Fund Growth ₹2,985.52
↑ 1.08 ₹3,330 -2.2 -0.5 3.1 5.7 7 9.43% 3M 11D 3M 12D ICICI Prudential Ultra Short Term Fund Growth ₹19.4784
↑ 0.01 ₹4,792 2.3 4.3 8.5 7.8 7.5 8.51% 4M 20D 5M 5D SBI Magnum Ultra Short Duration Fund Growth ₹4,272.59
↑ 1.84 ₹7,858 2.2 4.1 8.5 7.5 7.9 0% Kotak Savings Fund Growth ₹30.8754
↑ 0.01 ₹12,809 2.2 4.1 8.3 7.4 7.4 7.64% 5M 8D 5M 19D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 16 Aug 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 (16 Aug 19) ₹27.1882 ↑ 0.01 (0.05 %) Net Assets (Cr) ₹19,569 on 30 Jun 19 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.37 Sharpe Ratio 8.66 Information Ratio 3.42 Alpha Ratio -1.62 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.14% Effective Maturity 6 Months 18 Days Modified Duration 5 Months 16 Days Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹10,987 31 Jul 16 ₹12,048 31 Jul 17 ₹13,169 31 Jul 18 ₹14,173 31 Jul 19 ₹15,552 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 16 Aug 19 Duration Returns 1 Month 0.8% 3 Month 2.4% 6 Month 4.7% 1 Year 9.8% 3 Year 8.9% 5 Year 9.3% 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 0.6 Yr. Pallab Roy 1 Jun 08 11 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 30 Jun 19
Asset Allocation
Asset Class Value Cash 22.69% Debt 70.31% Other 7% Debt Sector Allocation
Sector Value Corporate 68.57% Cash Equivalent 22.69% Government 1.74% Credit Quality
Rating Value A 36.88% AA 44.08% AAA 19.04% Top Securities Holdings / Portfolio
Name Holding Value Quantity Call, Cash & Other Assets
Receivables | -7% ₹1,396 Cr Vedanta Limited
Debentures | -4% ₹788 Cr 7,900
↑ 1,950 Vodafone Mobile Services Limited
Debentures | -4% ₹775 Cr 7,990 DOLVI Minerals & Metals Private Limited
Debentures | -3% ₹695 Cr 3,910
↑ 130 Renew Power Ventures Private Limited
Debentures | -3% ₹662 Cr 6,740 JM FINANCIAL CREDIT SOLUTIONS LIMITED
Debentures | -3% ₹539 Cr 5,400
↑ 5,400 REC LIMITED
Commercial Paper | -2% ₹459 Cr 9,500 Indostar Capital Finance Limited
Debentures | -2% ₹439 Cr 4,400 REC LIMITED
Commercial Paper | -2% ₹396 Cr 8,000 INDOSTAR CAPITAL FINANCE LIMITED
Debentures | -2% ₹391 Cr 3,900
↑ 3,900 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 (16 Aug 19) ₹381.349 ↑ 0.15 (0.04 %) Net Assets (Cr) ₹15,270 on 30 Jun 19 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.35 Sharpe Ratio 9.1 Information Ratio 0.47 Alpha Ratio 3.07 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 8.12% Effective Maturity 7 Months 2 Days Modified Duration 6 Months 7 Days Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹10,943 31 Jul 16 ₹11,942 31 Jul 17 ₹12,934 31 Jul 18 ₹13,777 31 Jul 19 ₹14,991 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month 0.7% 3 Month 2.4% 6 Month 4.5% 1 Year 8.9% 3 Year 7.8% 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 Jun 19
Asset Allocation
Asset Class Value Cash 47.95% Debt 52.05% Debt Sector Allocation
Sector Value Cash Equivalent 47.95% Corporate 35.21% Government 12.85% Securitized 3.98% Credit Quality
Rating Value A 5.34% AA 14.96% AAA 79.7% Top Securities Holdings / Portfolio
Name Holding Value Quantity Power Finance Corporation Ltd.
Debentures | -3% ₹464 Cr 4,650 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -3% ₹443 Cr 9,000
↓ -2,000 Rural Electrification Corporation Limited
Debentures | -3% ₹427 Cr 4,263
↑ 2,500 Bharti Telecom Limited
Debentures | -3% ₹392 Cr 3,500
↑ 1,000 IndusInd Bank Limited
Certificate of Deposit | -2% ₹344 Cr 35,000 Net Receivables / (Payables)
Net Current Assets | -2% ₹343 Cr AXIS BANK LIMITED
Certificate of Deposit | -2% ₹342 Cr 35,000
↑ 10,000 Reliance Industries Limited
Debentures | -2% ₹313 Cr 3,150 POWER FINANCE CORPORATION LIMITED
Debentures | -2% ₹307 Cr 3,050
↑ 500 Rural Electrification Corporation Limited
Debentures | -2% ₹301 Cr 3,000 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 (16 Aug 19) ₹2,985.52 ↑ 1.08 (0.04 %) Net Assets (Cr) ₹3,330 on 30 Jun 19 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 1.16 Sharpe Ratio 0.03 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 2,500 Exit Load NIL Yield to Maturity 9.43% Effective Maturity 3 Months 12 Days Modified Duration 3 Months 11 Days Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹10,884 31 Jul 16 ₹11,829 31 Jul 17 ₹12,749 31 Jul 18 ₹13,547 31 Jul 19 ₹14,018 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month 0.3% 3 Month -2.2% 6 Month -0.5% 1 Year 3.1% 3 Year 5.7% 5 Year 6.9% 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 Jun 19
Asset Allocation
Asset Class Value Cash 75.97% Debt 24.03% Debt Sector Allocation
Sector Value Cash Equivalent 71.95% Corporate 27.3% Government 0.75% Credit Quality
Rating Value A 10.73% AA 14.27% AAA 69.82% BBB 5.18% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -8% ₹259 Cr 00 UTI Liquid Cash Plan Dir Gr
Investment Fund | -8% ₹250 Cr 798,021
↑ 798,021 Avanse Financial Services Limited
Debentures | -7% ₹230 Cr 2,350 Reliance Retail Limited
Commercial Paper | -6% ₹199 Cr 2,000,000,000 Edelweiss Commodities Services Limited
Debentures | -6% ₹197 Cr 2,000 NTPC LIMITED
Commercial Paper | -6% ₹197 Cr 2,000,000,000
↑ 2,000,000,000 HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED
Commercial Paper | -6% ₹187 Cr 2,000,000,000
↑ 2,000,000,000 Indian Oil Corporation Limited
Commercial Paper | -5% ₹149 Cr 1,500,000,000
↑ 1,500,000,000 Business Broadcast News Holdings Limited
Debentures | -4% ₹135 Cr 1,500 Small Industries Development Bank Of India
Debentures | -3% ₹100 Cr 1,000 4. 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 (16 Aug 19) ₹19.4784 ↑ 0.01 (0.04 %) Net Assets (Cr) ₹4,792 on 30 Jun 19 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 1.56 Sharpe Ratio 9.17 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 8.51% Effective Maturity 5 Months 5 Days Modified Duration 4 Months 20 Days Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹11,261 31 Jul 16 ₹12,310 31 Jul 17 ₹13,380 31 Jul 18 ₹14,229 31 Jul 19 ₹15,430 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month 0.7% 3 Month 2.3% 6 Month 4.3% 1 Year 8.5% 3 Year 7.8% 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 Jun 19
Asset Allocation
Asset Class Value Cash 42.76% Debt 57.24% Debt Sector Allocation
Sector Value Corporate 49.98% Cash Equivalent 42.76% Government 5.81% Securitized 1.44% Credit Quality
Rating Value A 6.29% AA 56.28% AAA 37.43% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Debentures | -5% ₹267 Cr 2,650 Treps
CBLO/Reverse Repo | -4% ₹182 Cr Writers And Publishers Private Limited
Debentures | -4% ₹179 Cr 1,782
↓ -150 JSW Steel Limited
Debentures | -3% ₹161 Cr 1,595 Bahadur Chand Investments Private Limited
Debentures | -3% ₹151 Cr 1,500 Ashoka Buildcon Ltd.
Debentures | -3% ₹151 Cr 1,500 Aspire Home Finance Corporation Limited
Debentures | -3% ₹149 Cr 1,500 LIC HOUSING FINANCE LIMITED
Commercial Paper | -3% ₹149 Cr 3,000 Manappuram Finance Limited
Debentures | -3% ₹148 Cr 1,481 NIRCHEM Cement Limited
Debentures | -3% ₹147 Cr 1,465 5. 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 (16 Aug 19) ₹4,272.59 ↑ 1.84 (0.04 %) Net Assets (Cr) ₹7,858 on 30 Jun 19 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.22 Sharpe Ratio 9.8 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 Jul 14 ₹10,000 31 Jul 15 ₹10,873 31 Jul 16 ₹11,746 31 Jul 17 ₹12,546 31 Jul 18 ₹13,438 31 Jul 19 ₹14,575 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month 0.7% 3 Month 2.2% 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 Jun 19
Asset Allocation
Asset Class Value Cash 75.22% Debt 24.78% Debt Sector Allocation
Sector Value Cash Equivalent 75.22% Corporate 20.71% Government 3.58% Securitized 0.49% Credit Quality
Rating Value AA 12.3% AAA 87.7% Top Securities Holdings / Portfolio
Name Holding Value Quantity NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Certificate of Deposit | -4% ₹332 Cr 35,000
↓ -15,000 CITICORP FINANCE (INDIA) LIMITED
Debentures | -3% ₹250 Cr 2,500 ANDHRA BANK
Certificate of Deposit | -3% ₹238 Cr 25,000 BANK OF BARODA
Certificate of Deposit | -3% ₹237 Cr 25,000 BANK OF BARODA
Certificate of Deposit | -3% ₹219 Cr 21,900
↑ 21,900 Small Industries Development Bank Of India
Debentures | -2% ₹205 Cr 2,050 AXIS BANK LIMITED
Certificate of Deposit | -2% ₹202 Cr 21,000
↑ 21,000 Indostar Capital Finance Limited
Debentures | -2% ₹200 Cr 2,000 Indostar Capital Finance Limited
Debentures | -2% ₹197 Cr 1,970 SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Certificate of Deposit | -2% ₹190 Cr 20,000 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 (16 Aug 19) ₹30.8754 ↑ 0.01 (0.05 %) Net Assets (Cr) ₹12,809 on 30 Jun 19 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.39 Sharpe Ratio 7.78 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.64% Effective Maturity 5 Months 19 Days Modified Duration 5 Months 8 Days Growth of 10,000 investment over the years.
Date Value 31 Jul 14 ₹10,000 31 Jul 15 ₹10,921 31 Jul 16 ₹11,823 31 Jul 17 ₹12,716 31 Jul 18 ₹13,541 31 Jul 19 ₹14,653 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 16 Aug 19 Duration Returns 1 Month 0.7% 3 Month 2.2% 6 Month 4.1% 1 Year 8.3% 3 Year 7.4% 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 Jun 19
Asset Allocation
Asset Class Value Cash 69.1% Debt 30.9% Debt Sector Allocation
Sector Value Cash Equivalent 69.1% Corporate 28.16% Securitized 2.26% Government 0.49% Credit Quality
Rating Value AA 9.99% AAA 90.01% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Commercial Paper | -5% ₹673 Cr 14,000
↑ 14,000 REC LIMITED
Commercial Paper | -4% ₹560 Cr 11,500 Nabha Power Limited
Debentures | -4% ₹500 Cr 5,000 RELIANCE INDUSTRIES LIMITED
Commercial Paper | -4% ₹489 Cr 10,000
↑ 10,000 SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA
Certificate of Deposit | -4% ₹469 Cr 50,000
↑ 50,000 Steel Authority Of India Limited
Commercial Paper | -3% ₹399 Cr 8,000
↑ 8,000 INDUSIND BANK LIMITED
Certificate of Deposit | -3% ₹385 Cr 39,500 Bank Of Baroda
Debentures | -2% ₹309 Cr 3,083 L & T Finance Ltd
Debentures | -2% ₹302 Cr 3,000 Bahadur Chand Investments Private Limited
Debentures | -2% ₹302 Cr 3,000
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 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!
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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