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6 Best Ultra Short Term Mutual Funds 2019 - 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, 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.
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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.
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
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 ₹25.7839
↑ 0.01 ₹14,700 2.9 4.8 9 8.9 8.7 0% 6M 17D Aditya Birla Sun Life Savings Fund Growth ₹362.913
↑ 0.07 ₹14,949 2.4 4.2 7.9 8.1 7.6 8.4% 5M 8D 6M 4D Indiabulls Ultra Short Term Fund Growth ₹1,782.82
↑ 0.42 ₹556 2.1 3.6 7.3 7.7 7.1 8.2% 4M 13D UTI Ultra Short Term Fund Growth ₹2,986.1
↑ 0.22 ₹5,077 2.1 3.7 7.1 7.5 7 9.49% 4M 16D 7M 8D SBI Magnum Ultra Short Duration Fund Growth ₹4,078.35
↑ 0.97 ₹4,419 2.3 4.2 8.1 7.4 7.9 7.97% 3M 7D 3M 14D Kotak Savings Fund Growth ₹29.4717
↑ 0.01 ₹6,888 2.3 3.9 7.6 7.5 7.4 8.4% 5M 12D 5M 26D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 18 Jan 19
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 To provide liquidity with returns commensurate with low risk through a portfolio of money market and debt securities. However, there can be no assurance that the investment objective of the scheme will be achieved. Indiabulls Ultra Short Term Fund is a Debt - Ultrashort Bond fund was launched on 6 Jan 12. It is a fund with Moderately Low risk and has given a Below is the key information for Indiabulls Ultra Short Term Fund Returns up to 1 year are on (Erstwhile UTI - Floating Rate Fund - Short Term Plan) To generate regular income through investment in a portfolio comprising substantially of floating rate debt / money market instruments, fixed rate debt / money market instruments swapped for floating rate returns. The Scheme may also invest a portion of its net assets in fixed rate debt securities and money market instruments .However there can be no assurance that the investment objective of the Scheme will be achieved. The Scheme does not guarantee / indicate any returns. UTI Ultra Short Term Fund is a Debt - Ultrashort Bond fund was launched on 29 Aug 03. It is a fund with Moderately Low risk and has given a Below is the key information for UTI Ultra Short Term Fund Returns up to 1 year are on (Erstwhile SBI Magnum InstaCash Fund) To provide the investors an opportunity to earn returns through investment in
debt & money market securities, while having the benefit of a very high degree of liquidity. SBI Magnum Ultra Short Duration Fund is a Debt - Ultrashort Bond fund was launched on 21 May 99. It is a fund with Low risk and has given a Below is the key information for SBI Magnum Ultra Short Duration Fund Returns up to 1 year are on (Erstwhile 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 1. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized return of 8.9% 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 (18 Jan 19) ₹25.7839 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹14,700 on 30 Nov 18 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆☆ Risk Moderate Expense Ratio 0.37 Sharpe Ratio 6.68 Information Ratio 3.32 Alpha Ratio -4.48 Min Investment 10,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 0% Effective Maturity 6 Months 17 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹11,000 31 Dec 15 ₹12,072 31 Dec 16 ₹13,240 31 Dec 17 ₹14,327 31 Dec 18 ₹15,578 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 18 Jan 19 Duration Returns 1 Month 1% 3 Month 2.9% 6 Month 4.8% 1 Year 9% 3 Year 8.9% 5 Year 9.3% 10 Year 15 Year Since launch 8.9% 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 0.02 Yr. Pallab Roy 1 Jun 08 10.42 Yr. Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 17.61% Debt 77.46% Other 4.93% Debt Sector Allocation
Sector Value Corporate 84.57% Cash Equivalent 7.92% Government 2.58% Credit Quality
Rating Value A 43.34% AA 36% AAA 20.66% Top Securities Holdings / Portfolio
Name Holding Value Quantity Call, Cash & Other Assets
Receivables | -5% ₹742 Cr Renew Power Ventures Private Limited
Debentures | -4% ₹673 Cr 6,740 Vodafone Mobile Services Limited
Debentures | -4% ₹618 Cr 6,410
↑ 350 Adani Infra (India) Limited
Debentures | -4% ₹538 Cr 500 Aditya Birla Retail Limited
Debentures | -3% ₹496 Cr 400 Indostar Capital Finance Limited
Debentures | -3% ₹440 Cr 4,400 EDELWEISS COMMODITIES SERVICES LIMITED
Debentures | -2% ₹375 Cr 7,500
↑ 7,500 Piramal Realty Private Limited
Debentures | -2% ₹351 Cr 3,500 INDIAN OIL CORPORATION LIMITED
Commercial Paper | -2% ₹349 Cr 7,000
↑ 7,000 Aasan Developers & Constructions Private Limited
Debentures | -2% ₹346 Cr 3,450 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 (18 Jan 19) ₹362.913 ↑ 0.07 (0.02 %) Net Assets (Cr) ₹14,949 on 30 Nov 18 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.35 Sharpe Ratio 5.49 Information Ratio 0.77 Alpha Ratio 2.73 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 8.4% Effective Maturity 6 Months 4 Days Modified Duration 5 Months 8 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹10,966 31 Dec 15 ₹11,941 31 Dec 16 ₹13,044 31 Dec 17 ₹13,982 31 Dec 18 ₹15,049 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 0.9% 3 Month 2.4% 6 Month 4.2% 1 Year 7.9% 3 Year 8.1% 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 4.06 Yr. Kaustubh Gupta 15 Jul 11 7.3 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 34.86% Debt 61.79% Other 3.35% Debt Sector Allocation
Sector Value Corporate 54.49% Cash Equivalent 31.11% Government 6.86% Securitized 4.2% Credit Quality
Rating Value AA 31.61% AAA 68.39% Top Securities Holdings / Portfolio
Name Holding Value Quantity Vodafone Mobile Services Limited
Debentures | -5% ₹687 Cr 6,950 L & T INFRASTRUCTURE FINANCE COMPANY LIMITED
Commercial Paper | -3% ₹483 Cr 10,000
↑ 10,000 Net Receivables / (Payables)
Receivables | -3% ₹469 Cr ONGC Petro Additions Limited
Debentures | -3% ₹461 Cr 460 Indiabulls Infraestates Ltd
Debentures | -3% ₹442 Cr 4,420
↑ 4,140 Adani Infra (India) Limited
Debentures | -3% ₹378 Cr 350
↑ 350 INDUSIND BANK LIMITED
Certificate of Deposit | -3% ₹364 Cr 37,500
↑ 37,500 NRSS XXIX TRANSMISSION LIMITED
Debentures | -3% ₹351 Cr 3,500 Parimal Finance Private Limited
Debentures | -2% ₹349 Cr 3,500 INDUSIND BANK LIMITED
Certificate of Deposit | -2% ₹338 Cr 35,000
↑ 25,000 3. Indiabulls Ultra Short Term Fund
CAGR/Annualized return of 8.6% since its launch. Ranked 17 in Ultrashort Bond category. Return for 2018 was 7.1% , 2017 was 6.9% and 2016 was 8.8% . Indiabulls Ultra Short Term Fund
Growth Launch Date 6 Jan 12 NAV (18 Jan 19) ₹1,782.82 ↑ 0.42 (0.02 %) Net Assets (Cr) ₹556 on 30 Nov 18 Category Debt - Ultrashort Bond AMC Indiabulls Asset Management Company Ltd. Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.71 Sharpe Ratio 8.85 Information Ratio 0.8 Alpha Ratio -0.91 Min Investment 500 Min SIP Investment 500 Exit Load NIL Yield to Maturity 8.2% Effective Maturity 4 Months 13 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹10,928 31 Dec 15 ₹11,893 31 Dec 16 ₹12,945 31 Dec 17 ₹13,840 31 Dec 18 ₹14,825 Returns for Indiabulls Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 0.8% 3 Month 2.1% 6 Month 3.6% 1 Year 7.3% 3 Year 7.7% 5 Year 8.2% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2018 7.1% 2017 6.9% 2016 8.8% 2015 8.8% 2014 9.3% 2013 8.8% 2012 2011 2010 2009 Fund Manager information for Indiabulls Ultra Short Term Fund
Name Since Tenure Malay Shah 22 Aug 14 4.36 Yr. Sourabh Sharma 17 Jan 19 0 Yr. Data below for Indiabulls Ultra Short Term Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 68.75% Debt 29.35% Other 1.9% Debt Sector Allocation
Sector Value Corporate 59.17% Cash Equivalent 38.93% Credit Quality
Rating Value AA 9.28% AAA 90.72% Top Securities Holdings / Portfolio
Name Holding Value Quantity Indiabulls Housing Finance Limited
Debentures | -9% ₹50 Cr 5,000,000 TALWANDI SABO POWER LTD
Debentures | -9% ₹50 Cr 5,000,000 Cholamandalam Investment And Fin. Co. Ltd
Commercial Paper | -9% ₹49 Cr 5,000,000
↑ 5,000,000 Dewan Housing Finance Corporation Limited
Debentures | -6% ₹33 Cr 2,050,000 AXIS BANK LIMITED
Certificate of Deposit | -5% ₹30 Cr 3,000,000
↑ 3,000,000 Small Industries Development Bank Of India
Certificate of Deposit | -5% ₹25 Cr 2,620,000
↑ 2,620,000 Shapoorji Pallonji & Company Limited
Commercial Paper | -5% ₹25 Cr 2,500,000 BHARTI AIRTEL LIMITED
Commercial Paper | -4% ₹25 Cr 2,500,000 Edelweiss Commodities Services Limited
Commercial Paper | -4% ₹25 Cr 2,500,000
↑ 2,500,000 HDB Financial Services Limited
Commercial Paper | -4% ₹25 Cr 2,500,000
↑ 2,500,000 4. UTI Ultra Short Term Fund
CAGR/Annualized return of 7.4% 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 (18 Jan 19) ₹2,986.1 ↑ 0.22 (0.01 %) Net Assets (Cr) ₹5,077 on 30 Nov 18 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 1.16 Sharpe Ratio 6.87 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 2,500 Exit Load NIL Yield to Maturity 9.49% Effective Maturity 7 Months 8 Days Modified Duration 4 Months 16 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹10,884 31 Dec 15 ₹11,810 31 Dec 16 ₹12,857 31 Dec 17 ₹13,712 31 Dec 18 ₹14,674 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 0.7% 3 Month 2.1% 6 Month 3.7% 1 Year 7.1% 3 Year 7.5% 5 Year 8% 10 Year 15 Year Since launch 7.4% 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 3.34 Yr. Ritesh Nambiar 1 Jul 15 3.34 Yr. Data below for UTI Ultra Short Term Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 61.91% Debt 38.09% Debt Sector Allocation
Sector Value Cash Equivalent 57.2% Corporate 42.8% Credit Quality
Rating Value AA 46.51% AAA 53.49% Top Securities Holdings / Portfolio
Name Holding Value Quantity Net Current Assets
Net Current Assets | -18% ₹920 Cr 00 PIRAMAL ENTERPRISES LIMITED
Commercial Paper | -5% ₹247 Cr 2,500,000,000
↑ 2,500,000,000 Shriram Transport Finance Company Limited
Debentures | -5% ₹247 Cr 2,500 NTPC Limited
Commercial Paper | -5% ₹246 Cr 2,500,000,000
↑ 2,500,000,000 Avanse Financial Services Limited
Debentures | -4% ₹234 Cr 2,350 Edelweiss Commodities Services Limited
Debentures | -4% ₹200 Cr 2,000 Indiabulls Consumer Finance Limited
Debentures | -4% ₹197 Cr 2,000,000,000
↑ 2,000,000,000 Business Broadcast News Holdings Limited
Debentures | -3% ₹159 Cr 1,500 Shriram Transport Finance Company Limited
Debentures | -3% ₹150 Cr 1,500 REC LIMITED
Commercial Paper | -3% ₹146 Cr 1,500,000,000
↑ 1,500,000,000 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 (18 Jan 19) ₹4,078.35 ↑ 0.97 (0.02 %) Net Assets (Cr) ₹4,419 on 30 Nov 18 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.22 Sharpe Ratio 13.15 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment Exit Load NIL Yield to Maturity 7.97% Effective Maturity 3 Months 14 Days Modified Duration 3 Months 7 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹10,903 31 Dec 15 ₹11,809 31 Dec 16 ₹12,713 31 Dec 17 ₹13,553 31 Dec 18 ₹14,626 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 0.8% 3 Month 2.3% 6 Month 4.2% 1 Year 8.1% 3 Year 7.4% 5 Year 7.9% 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 8.51 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 57.84% Debt 41.43% Other 0.73% Debt Sector Allocation
Sector Value Cash Equivalent 46.34% Corporate 42.37% Government 10.56% Credit Quality
Rating Value AA 10.36% AAA 89.64% Top Securities Holdings / Portfolio
Name Holding Value Quantity CHOLAMANDALAM INVESTMENT AND FIN. CO. LTD (CHOLAMANDALAM DBS FINANCE LTD)
Commercial Paper | -6% ₹290 Cr 6,000
↑ 6,000 Novy MIR Lightweighting Solutions Private Limited
Debentures | -4% ₹211 Cr 42 LIC Housing Finance Limited
Debentures | -4% ₹200 Cr 2,000
↑ 2,000 National Housing Bank
Debentures | -4% ₹200 Cr 2,000 JSW STEEL LIMITED
Commercial Paper | -4% ₹196 Cr 4,000 REC LIMITED
Commercial Paper | -4% ₹195 Cr 4,000
↑ 4,000 NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Commercial Paper | -4% ₹193 Cr 4,000
↑ 4,000 RMZ Infotech Private Limited
Debentures | -4% ₹184 Cr 1,750 AXIS BANK LIMITED
Certificate of Deposit | -3% ₹180 Cr 19,300
↑ 19,300 Small Industries Development Bank Of India
Debentures | -3% ₹175 Cr 1,750 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 (18 Jan 19) ₹29.4717 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹6,888 on 30 Nov 18 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.39 Sharpe Ratio 6.81 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 8.4% Effective Maturity 5 Months 26 Days Modified Duration 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 13 ₹10,000 31 Dec 14 ₹10,943 31 Dec 15 ₹11,887 31 Dec 16 ₹12,858 31 Dec 17 ₹13,714 31 Dec 18 ₹14,731 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 18 Jan 19 Duration Returns 1 Month 0.8% 3 Month 2.3% 6 Month 3.9% 1 Year 7.6% 3 Year 7.5% 5 Year 8.1% 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 10.55 Yr. Data below for Kotak Savings Fund as on 30 Nov 18
Asset Allocation
Asset Class Value Cash 38.39% Debt 61.61% Debt Sector Allocation
Sector Value Corporate 44.54% Cash Equivalent 36.73% Government 14.71% Securitized 4.03% Credit Quality
Rating Value AA 16.62% AAA 83.38% Top Securities Holdings / Portfolio
Name Holding Value Quantity REC LIMITED
Commercial Paper | -7% ₹536 Cr 11,000
↑ 11,000 Nabha Power Limited
Debentures | -5% ₹364 Cr 3,650
↑ 1,750 ONGC Mangalore Petrochemicals Limited
Debentures | -4% ₹325 Cr 3,250
↓ -750 INDUSIND BANK LIMITED
Certificate of Deposit | -4% ₹290 Cr 30,000
↓ -15,000 Power Finance Corporation Ltd.
Debentures | -3% ₹249 Cr 2,500
↑ 1,500 Reliance Jio Infocomm Limited
Debentures | -3% ₹220 Cr 2,200 Triparty Repo
CBLO/Reverse Repo | -3% ₹218 Cr Piramal Housing Finance Limited
Commercial Paper | -3% ₹213 Cr 4,500 Reliance Jio Infocomm Limited
Debentures | -3% ₹210 Cr 2,100
↑ 250 MAHINDRA & MAHINDRA FINANCIAL SERVICES LIMITED
Debentures | -3% ₹201 Cr 2,000
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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