Table of Contents
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 2023-2024.
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 term 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.
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 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 Kotak Treasury Advantage Fund) The investment objective of the Scheme is to generate returns through investments in debt and money market instruments with a view to reduce the interest rate risk. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved. Kotak Savings Fund is a Debt - Ultrashort Bond fund was launched on 13 Aug 04. It is a fund with Moderately Low risk and has given a Below is the key information for Kotak Savings Fund Returns up to 1 year are on (Erstwhile 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 UTI - Floating Rate Fund - Short Term Plan) To generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments, fixed rate debt / money market instruments swapped for floating rate returns. The Scheme may also invest a portion of its net assets in fixed rate debt securities and money market instruments .However there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not guarantee / indicate any returns. UTI Ultra Short Term Fund is a Debt - Ultrashort Bond fund was launched on 29 Aug 03. It is a fund with Moderately Low risk and has given a Below is the key information for UTI Ultra Short Term Fund Returns up to 1 year are on Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Aditya Birla Sun Life Savings Fund Growth ₹463.058
↑ 0.00 ₹14,457 1.7 3.2 5.3 5.7 4.8 7.83% 5M 19D 6M ICICI Prudential Ultra Short Term Fund Growth ₹23.5603
↑ 0.00 ₹12,447 1.6 3.1 5.2 5.4 4.5 7.81% 4M 28D 5M 23D Nippon India Ultra Short Duration Fund Growth ₹3,444.09
↑ 0.30 ₹5,115 1.6 3 5.1 6.2 4.6 7.83% 4M 16D 4M 28D Kotak Savings Fund Growth ₹36.6187
↑ 0.00 ₹12,325 1.6 3.1 5.1 4.9 4.5 7.69% 4M 20D 6M 18D SBI Magnum Ultra Short Duration Fund Growth ₹5,085.03
↑ 1.16 ₹8,908 1.6 3.2 5.1 5 4.5 7.53% 5M 5D 5M 23D UTI Ultra Short Term Fund Growth ₹3,625.45
↑ 0.36 ₹2,131 1.6 3 4.9 5.6 4.2 7.51% 4M 25D 4M 30D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Mar 23 500 Crore
and sorted on last 1 Year Return
.
1. Aditya Birla Sun Life Savings Fund
CAGR/Annualized
return of 7.4% since its launch. Ranked 6 in Ultrashort Bond
category. Return for 2022 was 4.8% , 2021 was 3.9% and 2020 was 7% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (24 Mar 23) ₹463.058 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹14,457 on 28 Feb 23 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.49 Sharpe Ratio -0.81 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.83% Effective Maturity 6 Months Modified Duration 5 Months 19 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹10,805 29 Feb 20 ₹11,689 28 Feb 21 ₹12,420 28 Feb 22 ₹12,946 28 Feb 23 ₹13,609 Returns for Aditya Birla Sun Life Savings Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month 0.5% 3 Month 1.7% 6 Month 3.2% 1 Year 5.3% 3 Year 5.7% 5 Year 6.3% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.8% 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% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 14 Jun 14 8.64 Yr. Kaustubh Gupta 15 Jul 11 11.56 Yr. Monika Gandhi 22 Mar 21 1.87 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 28 Feb 23
Asset Allocation
Asset Class Value Cash 64.26% Debt 35.74% Debt Sector Allocation
Sector Value Corporate 45.34% Cash Equivalent 37.84% Government 16.81% Credit Quality
Rating Value AA 20.74% AAA 79.26% Top Securities Holdings / Portfolio
Name Holding Value Quantity Housing Development Finance Corporation Ltd
Debentures | -4% ₹597 Cr 6,000 182 DTB 29062023
Sovereign Bonds | -3% ₹415 Cr 42,504,130 Bharti Telecom Limited
Debentures | -2% ₹324 Cr 3,250 Shriram Finance Limited
Debentures | -2% ₹277 Cr 2,750 Reliance Industries Limited
Debentures | -2% ₹253 Cr 2,500 Cholamandalam Investment And Fin. Co. Ltd
Debentures | -2% ₹250 Cr 2,500 08.54 MH Sdl 2023
Sovereign Bonds | -2% ₹246 Cr 24,500,000 Housing Development Finance Corporation Ltd
Debentures | -2% ₹244 Cr 2,450 08.21 HR UDAY 2023
Domestic Bonds | -2% ₹235 Cr 23,500,000 08.39 RJ UDAY 2023
Domestic Bonds | -1% ₹215 Cr 21,477,000 2. ICICI Prudential Ultra Short Term Fund
CAGR/Annualized
return of 7.5% since its launch. Ranked 27 in Ultrashort Bond
category. Return for 2022 was 4.5% , 2021 was 4% and 2020 was 6.5% . ICICI Prudential Ultra Short Term Fund
Growth Launch Date 3 May 11 NAV (24 Mar 23) ₹23.5603 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹12,447 on 28 Feb 23 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.93 Sharpe Ratio -1.8 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 7.81% Effective Maturity 5 Months 23 Days Modified Duration 4 Months 28 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹10,774 29 Feb 20 ₹11,678 28 Feb 21 ₹12,359 28 Feb 22 ₹12,860 28 Feb 23 ₹13,494 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3.1% 1 Year 5.2% 3 Year 5.4% 5 Year 6.1% 10 Year 15 Year Since launch 7.5% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.5% 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% Fund Manager information for ICICI Prudential Ultra Short Term Fund
Name Since Tenure Manish Banthia 15 Nov 16 6.22 Yr. Ritesh Lunawat 15 Jun 17 5.64 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 28 Feb 23
Asset Allocation
Asset Class Value Cash 67.64% Debt 32.36% Debt Sector Allocation
Sector Value Cash Equivalent 40.32% Corporate 37.84% Government 21.84% Credit Quality
Rating Value AA 18.7% AAA 81.3% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 29062023
Sovereign Bonds | -5% ₹683 Cr 70,000,000 National Bank For Agriculture And Rural Development
Debentures | -4% ₹574 Cr 5,750 182 DTB 06072023
Sovereign Bonds | -3% ₹463 Cr 47,500,000 Housing Development Finance Corporation Ltd
Debentures | -2% ₹310 Cr 3,100 Embassy Office Parks Reit
Debentures | -2% ₹271 Cr 2,750 Shriram Finance Limited
Debentures | -2% ₹200 Cr 2,000 Tata Housing Development Company Limited
Debentures | -2% ₹200 Cr 20,000 Ongc Petro Additions Limited
Debentures | -1% ₹190 Cr 1,900 Mahindra Rural Housing Finance Limited
Debentures | -1% ₹150 Cr 1,500 Embassy Office Parks Reit
Debentures | -1% ₹149 Cr 1,500 3. Nippon India Ultra Short Duration Fund
CAGR/Annualized
return of 6% since its launch. Ranked 62 in Ultrashort Bond
category. Return for 2022 was 4.6% , 2021 was 7.8% and 2020 was 4.9% . Nippon India Ultra Short Duration Fund
Growth Launch Date 7 Dec 01 NAV (24 Mar 23) ₹3,444.09 ↑ 0.30 (0.01 %) Net Assets (Cr) ₹5,115 on 28 Feb 23 Category Debt - Ultrashort Bond AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Low Expense Ratio 1.12 Sharpe Ratio -1.62 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.83% Effective Maturity 4 Months 28 Days Modified Duration 4 Months 16 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹10,769 29 Feb 20 ₹10,866 28 Feb 21 ₹11,306 28 Feb 22 ₹12,202 28 Feb 23 ₹12,799 Returns for Nippon India Ultra Short Duration Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3% 1 Year 5.1% 3 Year 6.2% 5 Year 5.1% 10 Year 15 Year Since launch 6% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.6% 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% Fund Manager information for Nippon India Ultra Short Duration Fund
Name Since Tenure Vivek Sharma 1 Oct 13 9.34 Yr. Kinjal Desai 25 May 18 4.69 Yr. Data below for Nippon India Ultra Short Duration Fund as on 28 Feb 23
Asset Allocation
Asset Class Value Cash 74.21% Debt 25.79% Debt Sector Allocation
Sector Value Corporate 41.39% Cash Equivalent 40.01% Government 18.59% Credit Quality
Rating Value AA 22.72% AAA 77.28% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 10082023
Sovereign Bonds | -4% ₹193 Cr 20,000,000
↑ 20,000,000 The Tata Power Company Limited
Debentures | -3% ₹165 Cr 1,650 Tata Realty And Infrastructure Limited
Debentures | -3% ₹149 Cr 1,500 National Housing Bank
Debentures | -2% ₹124 Cr 1,250 Reliance Industries Limited
Debentures | -2% ₹101 Cr 1,000 08.39 RJ UDAY 2024
Domestic Bonds | -2% ₹101 Cr 10,000,000 Shriram Housing Finance Limited
Debentures | -2% ₹101 Cr 1,000 182 DTB 22062023
Sovereign Bonds | -2% ₹98 Cr 10,000,000 Shriram Finance Limited
Debentures | -2% ₹90 Cr 900 Nabha Power Limited
Debentures | -1% ₹75 Cr 750 4. Kotak Savings Fund
CAGR/Annualized
return of 7.2% since its launch. Ranked 44 in Ultrashort Bond
category. Return for 2022 was 4.5% , 2021 was 3.2% and 2020 was 5.8% . Kotak Savings Fund
Growth Launch Date 13 Aug 04 NAV (24 Mar 23) ₹36.6187 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹12,325 on 28 Feb 23 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.44 Sharpe Ratio -1.66 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.69% Effective Maturity 6 Months 18 Days Modified Duration 4 Months 20 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹10,779 29 Feb 20 ₹11,586 28 Feb 21 ₹12,192 28 Feb 22 ₹12,609 28 Feb 23 ₹13,221 Returns for Kotak Savings Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3.1% 1 Year 5.1% 3 Year 4.9% 5 Year 5.7% 10 Year 15 Year Since launch 7.2% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.5% 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% Fund Manager information for Kotak Savings Fund
Name Since Tenure Deepak Agrawal 15 Apr 08 14.81 Yr. Vihag Mishra 30 Apr 22 0.76 Yr. Manu Sharma 1 Nov 22 0.25 Yr. Data below for Kotak Savings Fund as on 28 Feb 23
Asset Allocation
Asset Class Value Cash 66.51% Debt 33.49% Debt Sector Allocation
Sector Value Corporate 45.38% Cash Equivalent 28.35% Government 26.27% Credit Quality
Rating Value AA 11.66% AAA 88.34% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 16032023
Sovereign Bonds | -4% ₹498 Cr 50,000,000 182 DTB 01062023
Sovereign Bonds | -4% ₹490 Cr 50,000,000 182 DTB 09032023
Sovereign Bonds | -4% ₹438 Cr 44,000,000 Mahindra & Mahindra Financial Services Ltd
Debentures | -3% ₹348 Cr 3,500 7.16 5/20/2023 12:00:00 Am
Sovereign Bonds | -2% ₹250 Cr 25,000,000 Shriram Finance Limited
Debentures | -2% ₹247 Cr 2,450 Federal Bank
Debentures | -2% ₹232 Cr 25,000
↑ 25,000 The Tata Power Company Limited
Debentures | -2% ₹200 Cr 2,000 364 Dtb 15062023
Sovereign Bonds | -2% ₹196 Cr 20,000,000 Indian Bank
Domestic Bonds | -2% ₹186 Cr 20,000
↑ 20,000 5. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized
return of 7% since its launch. Return for 2022 was 4.5% , 2021 was 3.4% and 2020 was 5.9% . SBI Magnum Ultra Short Duration Fund
Growth Launch Date 21 May 99 NAV (24 Mar 23) ₹5,085.03 ↑ 1.16 (0.02 %) Net Assets (Cr) ₹8,908 on 28 Feb 23 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.49 Sharpe Ratio -1.4 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.53% Effective Maturity 5 Months 23 Days Modified Duration 5 Months 5 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹10,819 29 Feb 20 ₹11,644 28 Feb 21 ₹12,263 28 Feb 22 ₹12,699 28 Feb 23 ₹13,312 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month 0.6% 3 Month 1.6% 6 Month 3.2% 1 Year 5.1% 3 Year 5% 5 Year 5.9% 10 Year 15 Year Since launch 7% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.5% 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% Fund Manager information for SBI Magnum Ultra Short Duration Fund
Name Since Tenure Mohit Jain 30 Nov 17 5.18 Yr. Arun R. 1 Jul 21 1.59 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 28 Feb 23
Asset Allocation
Asset Class Value Cash 81.17% Debt 18.83% Debt Sector Allocation
Sector Value Cash Equivalent 49.68% Corporate 33.09% Government 17.23% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 18052023
Sovereign Bonds | -5% ₹492 Cr 50,000,000
↑ 50,000,000 7.37 4/16/2023 12:00:00 Am
Sovereign Bonds | -5% ₹411 Cr 41,000,000 91 DTB 20042023
Sovereign Bonds | -3% ₹297 Cr 30,000,000 7.10% Govt Stock 2029
Sovereign Bonds | -3% ₹250 Cr 25,000,000 182 DTB 30032023
Sovereign Bonds | -3% ₹224 Cr 22,550,400 91 DTB 16022023
Sovereign Bonds | -2% ₹200 Cr 20,000,000 7.16 5/20/2023 12:00:00 Am
Sovereign Bonds | -2% ₹150 Cr 15,000,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹149 Cr 1,500
↑ 1,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹149 Cr 1,500 Rec Limited
Debentures | -1% ₹125 Cr 1,250 6. UTI Ultra Short Term Fund
CAGR/Annualized
return of 6.8% since its launch. Ranked 27 in Ultrashort Bond
category. Return for 2022 was 4.2% , 2021 was 6.1% and 2020 was 5.3% . UTI Ultra Short Term Fund
Growth Launch Date 29 Aug 03 NAV (24 Mar 23) ₹3,625.45 ↑ 0.36 (0.01 %) Net Assets (Cr) ₹2,131 on 28 Feb 23 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.95 Sharpe Ratio -2.11 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.51% Effective Maturity 4 Months 30 Days Modified Duration 4 Months 25 Days Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹10,720 29 Feb 20 ₹11,018 28 Feb 21 ₹11,584 28 Feb 22 ₹12,297 28 Feb 23 ₹12,867 Returns for UTI Ultra Short Term Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month 0.5% 3 Month 1.6% 6 Month 3% 1 Year 4.9% 3 Year 5.6% 5 Year 5.2% 10 Year 15 Year Since launch 6.8% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.2% 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% Fund Manager information for UTI Ultra Short Term Fund
Name Since Tenure Ritesh Nambiar 1 Jul 15 7.59 Yr. Data below for UTI Ultra Short Term Fund as on 28 Feb 23
Asset Allocation
Asset Class Value Cash 79.74% Debt 20.26% Debt Sector Allocation
Sector Value Corporate 51.97% Cash Equivalent 37.58% Government 10.45% Credit Quality
Rating Value AA 14.94% AAA 85.06% Top Securities Holdings / Portfolio
Name Holding Value Quantity Bharti Telecom Limited
Debentures | -3% ₹59 Cr 600 National Bank For Agriculture And Rural Development
Debentures | -2% ₹50 Cr 500 National Bank For Agriculture And Rural Development
Debentures | -2% ₹50 Cr 500 Indian Railway Finance Corporation Limited
Debentures | -2% ₹50 Cr 500 Grasim Industries Limited
Debentures | -2% ₹50 Cr 500 Kotak Mahindra Prime Limited
Debentures | -2% ₹49 Cr 500 Embassy Office Parks Reit
Debentures | -2% ₹49 Cr 500 Shriram Finance Limited
Debentures | -2% ₹42 Cr 420 Bharti Airtel Limited
Debentures | -2% ₹35 Cr 350 Mahindra & Mahindra Financial Services Ltd
Debentures | -1% ₹29 Cr 300
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.
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.
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.
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.
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.
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).
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).
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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!
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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