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6 Best Ultra Short Term Mutual Funds 2022
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 2022-2023.
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 22 - 23
(Erstwhile Reliance Liquid Fund - Cash Plan) The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments. Nippon India Ultra Short Duration Fund is a Debt - Ultrashort Bond fund was launched on 7 Dec 01. It is a fund with Low risk and has given a Below is the key information for Nippon India Ultra Short Duration 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 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 Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2021 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Nippon India Ultra Short Duration Fund Growth ₹3,288.19
↑ 0.53 ₹4,985 0.7 1.7 7.3 4.2 7.8 5.04% 4M 22D 5M 21D UTI Ultra Short Term Fund Growth ₹3,464.8
↑ 0.16 ₹2,506 0.5 1.4 5.8 4.3 6.1 4.65% 4M 15D 4M 20D Aditya Birla Sun Life Savings Fund Growth ₹441.001
↑ 0.06 ₹16,109 0.6 1.7 3.7 5.7 3.9 5.04% 5M 26D 6M ICICI Prudential Ultra Short Term Fund Growth ₹22.4725
↑ 0.00 ₹13,266 0.7 1.6 3.6 5.6 4 4.61% 3M 4D 3M 25D SBI Magnum Ultra Short Duration Fund Growth ₹4,848.9
↑ 0.33 ₹14,029 0.5 1.5 3.2 5 3.4 4.54% 5M 5D 5M 16D Kotak Savings Fund Growth ₹34.9552
↑ 0.00 ₹12,596 0.6 1.5 3.2 4.9 3.2 4.66% 4M 17D 5M 16D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 22 500 Crore and sorted on last 1 Year Return.
1. Nippon India Ultra Short Duration Fund
CAGR/Annualized return of 6% since its launch. Ranked 62 in Ultrashort Bond category. Return for 2021 was 7.8% , 2020 was 4.9% and 2019 was 0.9% . Nippon India Ultra Short Duration Fund
Growth Launch Date 7 Dec 01 NAV (20 May 22) ₹3,288.19 ↑ 0.53 (0.02 %) Net Assets (Cr) ₹4,985 on 30 Apr 22 Category Debt - Ultrashort Bond AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Low Expense Ratio 1.09 Sharpe Ratio 1.46 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 5.04% Effective Maturity 5 Months 21 Days Modified Duration 4 Months 22 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,598 30 Apr 19 ₹11,303 30 Apr 20 ₹11,353 30 Apr 21 ₹11,969 30 Apr 22 ₹12,878 Returns for Nippon India Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 0.1% 3 Month 0.7% 6 Month 1.7% 1 Year 7.3% 3 Year 4.2% 5 Year 5.1% 10 Year 15 Year Since launch 6% Historical performance (Yearly) on absolute basis
Year Returns 2021 7.8% 2020 4.9% 2019 0.9% 2018 7.3% 2017 5.8% 2016 6.8% 2015 7.6% 2014 8.4% 2013 8.5% 2012 9.2% Fund Manager information for Nippon India Ultra Short Duration Fund
Name Since Tenure Vivek Sharma 1 Oct 13 8.59 Yr. Kinjal Desai 25 May 18 3.94 Yr. Data below for Nippon India Ultra Short Duration Fund as on 30 Apr 22
Asset Allocation
Asset Class Value Cash 53.85% Debt 46.15% Debt Sector Allocation
Sector Value Corporate 41.89% Cash Equivalent 39.36% Government 18.76% Credit Quality
Rating Value AA 25.73% AAA 74.27% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 Dtb 15092022
Sovereign Bonds | -4% ₹222 Cr 22,500,000 HDB Financial Services Limited
Debentures | -3% ₹161 Cr 1,500
↑ 1,500 Tata Realty And Infrastructure Limited 6.24%
Debentures | -3% ₹150 Cr 1,500
↑ 1,500 182 Dtb 11082022
Sovereign Bonds | -3% ₹148 Cr 15,000,000 Piramal Enterprises Ltd.
Debentures | -3% ₹146 Cr 3,000
↑ 3,000 Reliance Industries Limited
Debentures | -2% ₹103 Cr 1,000 Shriram Housing Finance Company Limited
Debentures | -2% ₹101 Cr 1,000 HDFC Bank Ltd
Debentures | -2% ₹98 Cr 2,000
↑ 2,000 Reliance Industries Limited
Debentures | -2% ₹86 Cr 850 Piramal Capital & Housing Finance Limited
Debentures | -2% ₹76 Cr 750,000
↑ 500,000 2. UTI Ultra Short Term Fund
CAGR/Annualized return of 6.9% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2021 was 6.1% , 2020 was 5.3% and 2019 was 3.3% . UTI Ultra Short Term Fund
Growth Launch Date 29 Aug 03 NAV (20 May 22) ₹3,464.8 ↑ 0.16 (0.00 %) Net Assets (Cr) ₹2,506 on 30 Apr 22 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.96 Sharpe Ratio 0.95 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 4.65% Effective Maturity 4 Months 20 Days Modified Duration 4 Months 15 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,637 30 Apr 19 ₹11,416 30 Apr 20 ₹11,707 30 Apr 21 ₹12,255 30 Apr 22 ₹13,007 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 0% 3 Month 0.5% 6 Month 1.4% 1 Year 5.8% 3 Year 4.3% 5 Year 5.3% 10 Year 15 Year Since launch 6.9% Historical performance (Yearly) on absolute basis
Year Returns 2021 6.1% 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% Fund Manager information for UTI Ultra Short Term Fund
Name Since Tenure Ritesh Nambiar 1 Jul 15 6.84 Yr. Data below for UTI Ultra Short Term Fund as on 30 Apr 22
Asset Allocation
Asset Class Value Cash 54.42% Debt 45.58% Debt Sector Allocation
Sector Value Cash Equivalent 46.44% Corporate 37.66% Government 15.9% Credit Quality
Rating Value AA 22.85% AAA 77.15% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 Dtb 04082022
Sovereign Bonds | -7% ₹148 Cr 1,500,000,000
↑ 1,000,000,000 8.15% Govt Stock 2022
Sovereign Bonds | -5% ₹116 Cr 1,150,000,000 TATA Steel Limited
Debentures | -5% ₹102 Cr 550 India (Republic of)
Sovereign Bonds | -5% ₹99 Cr 1,000,000,000 The Tata Power Company Limited
Debentures | -3% ₹71 Cr 700 Cholamandalam Investment And Fin. Co. Ltd
Debentures | -3% ₹60 Cr 500 Rural Electrification Corporation Limited
Debentures | -3% ₹56 Cr 545 Rural Electrification Corporation Limited
Debentures | -2% ₹51 Cr 510 National Bank For Agriculture And Rural Development
Debentures | -2% ₹50 Cr 500 LIC Housing Finance Limited
Debentures | -2% ₹50 Cr 500 3. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.5% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2021 was 3.9% , 2020 was 7% and 2019 was 8.5% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (20 May 22) ₹441.001 ↑ 0.06 (0.01 %) Net Assets (Cr) ₹16,109 on 15 May 22 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.47 Sharpe Ratio 1.84 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 5.04% Effective Maturity 6 Months Modified Duration 5 Months 26 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,692 30 Apr 19 ₹11,579 30 Apr 20 ₹12,436 30 Apr 21 ₹13,245 30 Apr 22 ₹13,782 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 0% 3 Month 0.6% 6 Month 1.7% 1 Year 3.7% 3 Year 5.7% 5 Year 6.5% 10 Year 15 Year Since launch 7.5% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.9% 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% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 14 Jun 14 7.88 Yr. Kaustubh Gupta 15 Jul 11 10.8 Yr. Monika Gandhi 22 Mar 21 1.11 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 15 May 22
Asset Allocation
Asset Class Value Cash 64.1% Debt 35.9% Debt Sector Allocation
Sector Value Corporate 42.72% Cash Equivalent 37.34% Government 19.94% Credit Quality
Rating Value AA 13.01% AAA 86.99% Top Securities Holdings / Portfolio
Name Holding Value Quantity Housing Development Finance Corporation Limited
Debentures | -4% ₹602 Cr 6,000 182 Dtb 08092022
Sovereign Bonds | -2% ₹394 Cr 40,000,000 8.15% Govt Stock 2022
Sovereign Bonds | -2% ₹296 Cr 29,500,000 Shriram Transport Finance Company Limited
Debentures | -2% ₹280 Cr 2,750 Indusind Bank Limited
Debentures | -2% ₹269 Cr 5,500
↑ 5,500 Reliance Industries Limited
Debentures | -2% ₹258 Cr 2,500 Housing Development Finance Corporation Limited
Debentures | -2% ₹246 Cr 2,450 08.21 HR UDAY 2023
Domestic Bonds | -1% ₹236 Cr 23,000,000 08.24 GJ Sdl 2023
Sovereign Bonds | -1% ₹216 Cr 21,000,000 08.18 HR UDAY 2022
Domestic Bonds | -1% ₹211 Cr 21,000,000 4. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized return of 7.6% since its launch. Ranked 27 in Ultrashort Bond category. Return for 2021 was 4% , 2020 was 6.5% and 2019 was 8.4% . ICICI Prudential Ultra Short Term Fund
Growth Launch Date 3 May 11 NAV (20 May 22) ₹22.4725 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹13,266 on 30 Apr 22 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.99 Sharpe Ratio 1.51 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Months (0.5%),1 Months and above(NIL) Yield to Maturity 4.61% Effective Maturity 3 Months 25 Days Modified Duration 3 Months 4 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,679 30 Apr 19 ₹11,519 30 Apr 20 ₹12,360 30 Apr 21 ₹13,143 30 Apr 22 ₹13,646 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 0.1% 3 Month 0.7% 6 Month 1.6% 1 Year 3.6% 3 Year 5.6% 5 Year 6.3% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2021 4% 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% Fund Manager information for ICICI Prudential Ultra Short Term Fund
Name Since Tenure Manish Banthia 15 Nov 16 5.46 Yr. Ritesh Lunawat 15 Jun 17 4.88 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 30 Apr 22
Asset Allocation
Asset Class Value Cash 69.48% Debt 30.52% Debt Sector Allocation
Sector Value Cash Equivalent 58.55% Corporate 33.84% Government 7.6% Credit Quality
Rating Value A 1.1% AA 22.05% AAA 76.85% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Bank For Agriculture And Rural Development
Debentures | -6% ₹825 Cr 8,250
↑ 2,000 91 Dtb 13072022
Sovereign Bonds | -3% ₹495 Cr 50,000,000
↑ 50,000,000 Nabha Power Limited
Debentures | -3% ₹450 Cr 4,500 The Tata Power Company Limited
Debentures | -1% ₹212 Cr 2,084 Shriram Transport Finance Company Limited
Debentures | -1% ₹204 Cr 2,000 LIC Housing Finance Limited
Debentures | -1% ₹197 Cr 1,950
↑ 1,000 Rec Limited
Debentures | -1% ₹166 Cr 1,650 LIC Housing Finance Limited
Debentures | -1% ₹161 Cr 1,600 Embassy Office Parks Reit
Debentures | -1% ₹152 Cr 1,500 Housing Development Finance Corporation Ltd
Debentures | -1% ₹152 Cr 1,500 5. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized return of 7.1% since its launch. Return for 2021 was 3.4% , 2020 was 5.9% and 2019 was 8% . SBI Magnum Ultra Short Duration Fund
Growth Launch Date 21 May 99 NAV (20 May 22) ₹4,848.9 ↑ 0.33 (0.01 %) Net Assets (Cr) ₹14,029 on 15 May 22 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.49 Sharpe Ratio -0.39 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 4.54% Effective Maturity 5 Months 16 Days Modified Duration 5 Months 5 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,675 30 Apr 19 ₹11,557 30 Apr 20 ₹12,406 30 Apr 21 ₹13,016 30 Apr 22 ₹13,473 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month -0.1% 3 Month 0.5% 6 Month 1.5% 1 Year 3.2% 3 Year 5% 5 Year 6% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.4% 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% Fund Manager information for SBI Magnum Ultra Short Duration Fund
Name Since Tenure Arun R. 1 Jul 21 0.83 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 15 May 22
Asset Allocation
Asset Class Value Cash 64.88% Debt 35.12% Debt Sector Allocation
Sector Value Cash Equivalent 45.43% Government 27.84% Corporate 26.74% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 Dtb 11082022
Sovereign Bonds | -5% ₹715 Cr 72,500,000 182 Dtb 29092022
Sovereign Bonds | -5% ₹686 Cr 70,000,000 3.8% Govt Stock 2024
Sovereign Bonds | -4% ₹568 Cr 57,300,000 National Bank For Agriculture And Rural Development
Debentures | -3% ₹410 Cr 4,000 Power Finance Corporation Ltd.
Debentures | -3% ₹359 Cr 3,550 National Bank For Agriculture And Rural Development
Debentures | -2% ₹300 Cr 3,000
↑ 1,000 Indusind Bank Limited
Debentures | -2% ₹241 Cr 5,000 Sundaram Finance Limited
Debentures | -1% ₹200 Cr 2,000 LIC Housing Finance Limited
Debentures | -1% ₹200 Cr 2,000 Rec Limited
Debentures | -1% ₹151 Cr 1,500 6. Kotak Savings Fund
CAGR/Annualized return of 7.3% since its launch. Ranked 44 in Ultrashort Bond category. Return for 2021 was 3.2% , 2020 was 5.8% and 2019 was 7.8% . Kotak Savings Fund
Growth Launch Date 13 Aug 04 NAV (20 May 22) ₹34.9552 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹12,596 on 30 Apr 22 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.45 Sharpe Ratio -0.79 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 4.66% Effective Maturity 5 Months 16 Days Modified Duration 4 Months 17 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 17 ₹10,000 30 Apr 18 ₹10,658 30 Apr 19 ₹11,496 30 Apr 20 ₹12,319 30 Apr 21 ₹12,919 30 Apr 22 ₹13,363 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 22 Duration Returns 1 Month 3 Month 0.6% 6 Month 1.5% 1 Year 3.2% 3 Year 4.9% 5 Year 5.9% 10 Year 15 Year Since launch 7.3% Historical performance (Yearly) on absolute basis
Year Returns 2021 3.2% 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% Fund Manager information for Kotak Savings Fund
Name Since Tenure Deepak Agrawal 15 Apr 08 14.05 Yr. Data below for Kotak Savings Fund as on 30 Apr 22
Asset Allocation
Asset Class Value Cash 50% Debt 50% Debt Sector Allocation
Sector Value Corporate 39.59% Government 33.42% Cash Equivalent 26.99% Credit Quality
Rating Value AA 11.98% AAA 88.02% Top Securities Holdings / Portfolio
Name Holding Value Quantity 8.08% Govt Stock 2022
Sovereign Bonds | -6% ₹767 Cr 75,999,900 National Bank For Agriculture And Rural Development
Debentures | -5% ₹635 Cr 6,350
↑ 4,250 182 Dtb 15092022
Sovereign Bonds | -5% ₹591 Cr 60,000,000
↑ 60,000,000 182 Dtb 01092022
Sovereign Bonds | -3% ₹429 Cr 43,500,000 182 Dtb 25082022
Sovereign Bonds | -3% ₹410 Cr 41,500,000
↑ 11,500,000 LIC Housing Finance
Debentures | -3% ₹367 Cr 7,500
↑ 7,500 Shriram Transport Finance Company Limited
Debentures | -2% ₹250 Cr 2,450 182 Dtb 08092022
Sovereign Bonds | -2% ₹246 Cr 25,000,000
↑ 5,000,000 8.15% Govt Stock 2022
Sovereign Bonds | -2% ₹206 Cr 20,500,000 Muthoot Finance Limited
Debentures | -2% ₹202 Cr 2,000,000
Features Of Ultra Short Term Funds
Fund Type: Open-ended
Fund Category: Debt fund
Minimum Amount: INR 5,000 - 10,000
Risk Involved: Low -risk
Redemption: T+1, meaning that if you register the Redemption request before 3 PM, you shall get the redemption amount after a day. However, if the redemption request is sent after 3 PM, the redemption request shall be processed day after.
Things to Consider as an Investor
1. Risk
Unlike other debt funds, the ultra-short term funds are somewhat immune to interest rate risks because of the short maturity of their Underlying assets. However, as compared to liquid funds, these funds are pretty risky. The investment strategy of the fund manager may introduce credit risk when he incorporates low-credit rated securities in the expectation of an upgrade in future. Moreover, the introduction of government securities may increase the volatility of the fund more than expected.
2. Return
An investor can expect returns of around 7-9% from this fund in a stable interest rate environment. This return is moderately higher than what a liquid fund offers. However, even though these funds are fixed-income havens, they may not offer guaranteed returns. You need to look at Yield to Maturity (ytm) to understand what to expect with the investments at the time of investment.
3. Cost
Ultra short-term funds charge a fee to manage your money called an expense ratio. Till now the Securities and Exchange Board of India (SEBI) had mandated the upper limit of expense ratio to be 2.25% (might change time to time). Considering the overall returns generated by these funds as compared to liquid funds, a long-term holding period and lower expense ratio would help in recovering the money gone out by way of interest rate fluctuations.
4. Investment Horizon
Ultra short-term funds earn from the coupon of short-term instruments. The prices of these securities may change on a day-to-day Basis and have a relatively longer maturity. These are much more volatile than liquid funds and a short time frame may seem inadequate to generate sufficient returns. As compared to liquid funds, you need to hold these funds for comparatively longer horizon owing to a higher average maturity of the underlying securities.
5. Financial Goals
You may use these funds for a variety of purposes. If you need to park money for a period of 3 months to a year, then these funds may come handy. Additionally, you may want these to transfer your funds to a riskier haven like Equity Funds. Put a lump sum in these funds and initiate a Systematic Transfer Plan (STP) to equity funds. You may look at them as an additional haven to be used as an emergency fund. If you need monthly income, then invest a portion of your superannuation portfolio in these and initiate a systematic withdrawal plan (SWP).
6. Taxation
Dividends of Ultra Short Term Funds in India are tax-free in the hands of the investor. The AMC deducts a Dividend Distribution Tax (DDT) on behalf of the investor before it sends the dividend to the investor. If the investor has invested in a growth fund and redeemed his/her investment within 1 year, he/she may have to pay Short Term Capital Gains Tax (STCG).
How to Invest in Ultra Short Term Funds Online?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
Conclusion
In today’s time, people face financial insecurities every now and then. In such a case, smart investments made in Mutual Funds help. Ultra Short Term funds are one such Smart investment that offers good returns to investors in order to manage financial insecurities. So, invest in the best Ultra Short Term funds today!
The way to wealth is easy, spend less than you earn and INVEST the difference wisely!
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well explained and got to know which one i need to pick it p
Get deep insight of the funds. Better than moneycontrol and valuereserach sort of sites.
Very good information
Presentation is very good