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6 Best Ultra Short Term Mutual Funds 2023
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.
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 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.
Top 6 Ultra Short Term Funds for Investments in India FY 23 - 24
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 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 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 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 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 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 ₹469.638
↑ 0.11 ₹14,525 2 3.6 6.4 5.2 4.8 7.56% 5M 8D 5M 16D SBI Magnum Ultra Short Duration Fund Growth ₹5,153.67
↑ 0.87 ₹11,493 1.9 3.5 6.2 4.5 4.5 7.44% 5M 12D 5M 26D ICICI Prudential Ultra Short Term Fund Growth ₹23.8823
↑ 0.00 ₹12,645 1.9 3.5 6.2 5.1 4.5 7.57% 4M 17D 5M 5D Kotak Savings Fund Growth ₹37.1208
↑ 0.01 ₹10,606 1.9 3.5 6.1 4.5 4.5 7.54% 6M 25D 9M 18D Nippon India Ultra Short Duration Fund Growth ₹3,489.8
↑ 0.54 ₹5,103 1.9 3.4 6.1 6.1 4.6 7.62% 5M 5D 5M 22D UTI Ultra Short Term Fund Growth ₹3,673.19
↑ 0.49 ₹2,190 1.9 3.4 5.9 5.3 4.2 7.57% 5M 21D 5M 26D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 26 May 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 (26 May 23) ₹469.638 ↑ 0.11 (0.02 %) Net Assets (Cr) ₹14,525 on 30 Apr 23 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.49 Sharpe Ratio -0.55 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.56% Effective Maturity 5 Months 16 Days Modified Duration 5 Months 8 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,830 30 Apr 20 ₹11,630 30 Apr 21 ₹12,388 30 Apr 22 ₹12,890 30 Apr 23 ₹13,625 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 2% 6 Month 3.6% 1 Year 6.4% 3 Year 5.2% 5 Year 6.4% 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 8.88 Yr. Kaustubh Gupta 15 Jul 11 11.8 Yr. Monika Gandhi 22 Mar 21 2.11 Yr. Dhaval Joshi 21 Nov 22 0.44 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 61.38% Debt 38.62% Debt Sector Allocation
Sector Value Corporate 43.74% Cash Equivalent 30.82% Government 25.2% Securitized 0.24% Credit Quality
Rating Value AA 21.44% AAA 78.56% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 29062023
Sovereign Bonds | -6% ₹855 Cr 86,204,130
↓ -5,000,000 Housing Development Finance Corporation Ltd
Debentures | -4% ₹597 Cr 6,000 182 DTB 29092023
Sovereign Bonds | -3% ₹487 Cr 50,000,000 Hindalco Industries Limited
Debentures | -2% ₹350 Cr 35,000 Bharti Telecom Limited
Debentures | -2% ₹325 Cr 3,250 Shriram Finance Limited
Debentures | -2% ₹275 Cr 2,750 Sikka Ports & Terminals Limited
Debentures | -2% ₹252 Cr 2,520 Reliance Industries Limited
Debentures | -2% ₹251 Cr 2,500 National Bank For Agriculture And Rural Development
Debentures | -2% ₹250 Cr 2,500 Cholamandalam Investment And Fin. Co. Ltd
Debentures | -2% ₹250 Cr 2,500 2. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized return of 7.1% 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 (26 May 23) ₹5,153.67 ↑ 0.87 (0.02 %) Net Assets (Cr) ₹11,493 on 30 Apr 23 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.49 Sharpe Ratio -0.87 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.44% Effective Maturity 5 Months 26 Days Modified Duration 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,827 30 Apr 20 ₹11,622 30 Apr 21 ₹12,193 30 Apr 22 ₹12,621 30 Apr 23 ₹13,318 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.9% 6 Month 3.5% 1 Year 6.2% 3 Year 4.5% 5 Year 5.9% 10 Year 15 Year Since launch 7.1% 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 5.42 Yr. Arun R. 1 Jul 21 1.83 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 78.57% Debt 21.43% Debt Sector Allocation
Sector Value Cash Equivalent 59.11% Government 20.48% Corporate 20.41% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 03082023
Sovereign Bonds | -10% ₹1,202 Cr 122,000,000
↑ 122,000,000 182 DTB 22092023
Sovereign Bonds | -3% ₹439 Cr 45,000,000 91 DTB 01062023
Sovereign Bonds | -2% ₹282 Cr 28,331,000 182 DTB 31082023
Sovereign Bonds | -2% ₹245 Cr 25,000,000 182 DTB 14092023
Sovereign Bonds | -2% ₹196 Cr 20,000,000 09.63 AP Sdl 2024
Sovereign Bonds | -1% ₹184 Cr 18,100,000 Kotak Mahindra Prime Limited
Debentures | -1% ₹173 Cr 1,750 7.16% Govt Stock 2023
Sovereign Bonds | -1% ₹147 Cr 14,700,000 Bajaj Housing Finance Limited
Debentures | -1% ₹147 Cr 1,500
↑ 1,000 National Bank For Agriculture And Rural Development
Debentures | -1% ₹125 Cr 1,250 3. 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 (26 May 23) ₹23.8823 ↑ 0.00 (0.01 %) Net Assets (Cr) ₹12,645 on 30 Apr 23 Category Debt - Ultrashort Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.93 Sharpe Ratio -0.94 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 7.57% Effective Maturity 5 Months 5 Days Modified Duration 4 Months 17 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,787 30 Apr 20 ₹11,574 30 Apr 21 ₹12,307 30 Apr 22 ₹12,778 30 Apr 23 ₹13,502 Returns for ICICI Prudential Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.9% 6 Month 3.5% 1 Year 6.2% 3 Year 5.1% 5 Year 6.3% 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 6.46 Yr. Ritesh Lunawat 15 Jun 17 5.88 Yr. Data below for ICICI Prudential Ultra Short Term Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 75.14% Debt 24.86% Debt Sector Allocation
Sector Value Corporate 50.89% Cash Equivalent 39.91% Government 9.2% Credit Quality
Rating Value AA 18.72% AAA 81.28% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 29062023
Sovereign Bonds | -5% ₹694 Cr 70,000,000 182 DTB 06072023
Sovereign Bonds | -4% ₹471 Cr 47,500,000 Sikka Ports & Terminals Limited
Debentures | -3% ₹375 Cr 3,750
↓ -250 Embassy Office Parks Reit
Debentures | -2% ₹272 Cr 2,750 National Bank For Agriculture And Rural Development
Debentures | -2% ₹259 Cr 2,600 Power Finance Corporation Ltd.
Debentures | -2% ₹244 Cr 2,450 Embassy Office Parks Reit
Debentures | -2% ₹200 Cr 2,000 Apollo Building Products Private Limited
Debentures | -2% ₹199 Cr 20,000 Tata Housing Development Company Limited
Debentures | -2% ₹196 Cr 19,500
↓ -500 Ongc Petro Additions Limited
Debentures | -1% ₹190 Cr 1,900 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 (26 May 23) ₹37.1208 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹10,606 on 30 Apr 23 Category Debt - Ultrashort Bond AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.44 Sharpe Ratio -1.06 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.54% Effective Maturity 9 Months 18 Days Modified Duration 6 Months 25 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,787 30 Apr 20 ₹11,559 30 Apr 21 ₹12,122 30 Apr 22 ₹12,538 30 Apr 23 ₹13,229 Returns for Kotak Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.9% 6 Month 3.5% 1 Year 6.1% 3 Year 4.5% 5 Year 5.8% 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 15.05 Yr. Vihag Mishra 30 Apr 22 1 Yr. Manu Sharma 1 Nov 22 0.5 Yr. Data below for Kotak Savings Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 61.16% Debt 38.84% Debt Sector Allocation
Sector Value Government 37.68% Corporate 37.01% Cash Equivalent 25.31% Credit Quality
Rating Value AA 11.04% AAA 88.96% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 07092023
Sovereign Bonds | -9% ₹1,121 Cr 114,500,010 182 DTB 14092023
Sovereign Bonds | -7% ₹880 Cr 90,000,010 6.75% Govt Stock 2024
Sovereign Bonds | -3% ₹389 Cr 39,000,000
↓ -1,000,000 Mahindra & Mahindra Financial Services Ltd
Debentures | -3% ₹349 Cr 3,500 Shriram Finance Limited
Debentures | -2% ₹245 Cr 2,450 182 DTB 10082023
Sovereign Bonds | -2% ₹226 Cr 23,000,000 Bajaj Finance Limited
Debentures | -2% ₹225 Cr 2,250 Rural Electrification Corporation Limited
Debentures | -2% ₹209 Cr 2,100 The Tata Power Company Limited
Debentures | -2% ₹200 Cr 2,000 Housing Development Finance Corporation Ltd
Debentures | -1% ₹175 Cr 1,750 5. 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 (26 May 23) ₹3,489.8 ↑ 0.54 (0.02 %) Net Assets (Cr) ₹5,103 on 30 Apr 23 Category Debt - Ultrashort Bond AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Low Expense Ratio 1.12 Sharpe Ratio -1.2 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load NIL Yield to Maturity 7.62% Effective Maturity 5 Months 22 Days Modified Duration 5 Months 5 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,666 30 Apr 20 ₹10,713 30 Apr 21 ₹11,294 30 Apr 22 ₹12,151 30 Apr 23 ₹12,820 Returns for Nippon India Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.9% 6 Month 3.4% 1 Year 6.1% 3 Year 6.1% 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 9.58 Yr. Kinjal Desai 25 May 18 4.93 Yr. Data below for Nippon India Ultra Short Duration Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 68.99% Debt 31.01% Debt Sector Allocation
Sector Value Corporate 35.78% Cash Equivalent 33.87% Government 30.36% Credit Quality
Rating Value AA 19.16% AAA 80.84% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 07092023
Sovereign Bonds | -5% ₹244 Cr 25,000,000 182 DTB 10082023
Sovereign Bonds | -4% ₹196 Cr 20,000,000 Tata Realty And Infrastructure Limited
Debentures | -3% ₹150 Cr 1,500 Shriram Transport Finance Company Limited
Debentures | -2% ₹125 Cr 12,500
↑ 12,500 08.39 RJ UDAY 2024
Domestic Bonds | -2% ₹101 Cr 10,000,000 Reliance Industries Limited
Debentures | -2% ₹101 Cr 1,000 Shriram Housing Finance Limited
Debentures | -2% ₹100 Cr 1,000 182 DTB 14092023
Sovereign Bonds | -2% ₹97 Cr 10,000,000 Samvardhana Motherson International Limited
Debentures | -1% ₹75 Cr 750 Manappuram Finance Limited
Debentures | -1% ₹70 Cr 700 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 (26 May 23) ₹3,673.19 ↑ 0.49 (0.01 %) Net Assets (Cr) ₹2,190 on 30 Apr 23 Category Debt - Ultrashort Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.95 Sharpe Ratio -1.59 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.57% Effective Maturity 5 Months 26 Days Modified Duration 5 Months 21 Days Growth of 10,000 investment over the years.
Date Value 30 Apr 18 ₹10,000 30 Apr 19 ₹10,733 30 Apr 20 ₹11,006 30 Apr 21 ₹11,522 30 Apr 22 ₹12,228 30 Apr 23 ₹12,879 Returns for UTI Ultra Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 May 23 Duration Returns 1 Month 0.6% 3 Month 1.9% 6 Month 3.4% 1 Year 5.9% 3 Year 5.3% 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 7.84 Yr. Data below for UTI Ultra Short Term Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 68.76% Debt 31.24% Debt Sector Allocation
Sector Value Corporate 45.28% Cash Equivalent 38.14% Government 16.58% Credit Quality
Rating Value AA 15.04% AAA 84.96% Top Securities Holdings / Portfolio
Name Holding Value Quantity Bharti Hexacom Limited
Debentures | -3% ₹64 Cr 650
↑ 500 Bharti Telecom Limited
Debentures | -3% ₹59 Cr 600 Mahindra Rural Housing Finance Limited
Debentures | -2% ₹50 Cr 500 Reliance Industries Limited
Debentures | -2% ₹50 Cr 500 Embassy Office Parks Reit
Debentures | -2% ₹50 Cr 500 Torrent Power Limited
Debentures | -2% ₹49 Cr 500
↑ 500 National Bank For Agriculture And Rural Development
Debentures | -2% ₹49 Cr 500 Godrej Properties Limited
Debentures | -2% ₹49 Cr 490 182 DTB 07092023
Sovereign Bonds | -2% ₹49 Cr 500,000,000 182 DTB 14092023
Sovereign Bonds | -2% ₹49 Cr 500,000,000
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