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Liquid Mutual Funds Returns in India | Latest Performance & Ratings

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Liquid Mutual Funds: How To Choose?

Updated on August 2, 2022 , 1338 views

Liquid Mutual Funds are essentially money market (debt) funds that invest in small tenure money Market instruments including treasury bills, term deposits, certificate of deposits, commercial papers etc. Generally, liquid Mutual Funds are options to invest your money for small durations. The securities that are part of Liquid Funds have a maturity of fewer than 91 days. Liquid funds have no lock-in period so the assets invested are not bound for long, thus keep your money available. Liquid fund returns are volatile as they are dependent on the fund performance in the financial market. Selecting the best liquid fund is a difficult task, however, one can use certain parameters to judge them.

The basic parameters that can be used to select Liquid Mutual Funds are as follows:

  • Returns or past track record
  • Portfolio & Maturity Profile
  • liquidity & Size of Fund
  • Performance Rating by a rating agency

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1. Liquid Fund Returns

Looking at returns at various liquid funds:

FundNAVNet Assets (Cr)1 MO (%)3 MO (%)6 MO (%)1 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
BOI AXA Liquid Fund Growth ₹2,464.71
↑ 0.35
₹3180.41.22.13.83.35.29%1M 17D1M 20D
IDBI Liquid Fund Growth ₹2,305.9
↑ 0.30
₹6500.41.223.83.44.73%25D25D
Baroda Pioneer Liquid Fund Growth ₹2,467.24
↑ 0.33
₹5,8300.41.223.83.35.3%1M 13D1M 17D
Axis Liquid Fund Growth ₹2,384.38
↑ 0.30
₹22,4260.41.223.83.34.75%1M 3D1M 3D
Mahindra Liquid Fund Growth ₹1,394.76
↑ 0.18
₹1,2300.41.223.73.30%
JM Liquid Fund Growth ₹58.6239
↑ 0.01
₹1,9000.41.123.73.35.11%1M 8D1M 11D
UTI Liquid Cash Plan Growth ₹3,516.98
↑ 0.48
₹27,5860.41.123.73.34.7%1M 2D1M 4D
DSP BlackRock Liquidity Fund Growth ₹3,061.89
↑ 0.40
₹8,8510.41.223.73.35.12%1M 6D1M 13D
Mirae Asset Cash Management Fund Growth ₹2,248.78
↑ 0.29
₹3,4720.41.223.73.35.1%1M 10D1M 11D
Aditya Birla Sun Life Liquid Fund Growth ₹345.35
↑ 0.05
₹36,7350.41.123.73.35.26%1M 17D1M 17D
Invesco India Liquid Fund Growth ₹2,946.97
↑ 0.39
₹3,6430.41.123.73.35%1M 4D1M 6D
IDFC Cash Fund Growth ₹2,593.92
↑ 0.36
₹13,8500.41.123.73.25.05%1M 12D1M 13D
PGIM India Insta Cash Fund Growth ₹279.245
↑ 0.04
₹6240.41.223.73.34.61%20D22D
Canara Robeco Liquid Growth ₹2,578.24
↑ 0.31
₹1,9060.41.123.73.24.87%21D22D
SBI Liquid Fund Growth ₹3,357.87
↑ 0.42
₹60,1870.41.123.73.34.66%25D29D
HDFC Liquid Fund Growth ₹4,210.88
↑ 0.55
₹50,1290.41.123.73.25.11%1M 17D1M 17D
Tata Liquid Fund Growth ₹3,379.99
↑ 0.43
₹15,4120.41.123.73.24.77%29D29D
Nippon India Liquid Fund  Growth ₹5,237.37
↑ 0.71
₹27,7030.41.123.73.25.12%1M 15D1M 17D
Principal Cash Management Fund Growth ₹1,893.16
↑ 0.24
₹2,3630.41.123.73.25.14%1M 5D1M 5D
ICICI Prudential Liquid Fund Growth ₹317.593
↑ 0.04
₹43,5020.41.123.73.24.74%28D1M
Kotak Liquid Fund Growth ₹4,339.52
↑ 0.58
₹36,1760.41.123.73.25.08%1M 13D1M 13D
LIC MF Liquid Fund Growth ₹3,880.25
↑ 0.47
₹5,3840.41.123.63.35.11%1M 9D1M 9D
IIFL Liquid Fund Growth ₹1,657.4
↑ 0.23
₹9950.41.123.634.63%25D26D
Edelweiss Liquid Fund Growth ₹2,746.69
↑ 0.37
₹1,3170.41.11.93.53.24.72%27D27D
Indiabulls Liquid Fund Growth ₹2,079.02
↑ 0.26
₹2290.41.11.93.43.14.35%17D18D
Sundaram Money Fund Growth ₹44.1929
↑ 0.00
₹3,1440.30.81.73.3 3.5%1M 2D1M 2D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Aug 22
95% of the funds have a return between 7.25% to 7.75%. Hence liquid fund returns are in a very close Range and even if one does not pick the “best liquid fund” they are not very far off from the highest or average return.

2. Portfolio & Maturity Profile Of Liquid Mutual Funds

The portfolio of liquid Mutual Funds contains securities that have a residual maturity of fewer than 91 days. While one can go and talk about credit quality (in simple words, how good are the securities in the portfolio) and try to differentiate portfolios, however, the real experience is that, unless there are real issues with the portfolio carrying some very bad quality securities, Liquid funds should not be an issue. Till date, there has been no known Default in liquid fund portfolios and companies don’t usually default on the short maturity papers. However, having said the above the portfolio of the fund would give ideas on the yield of the fund and its subsequent performance. It’s often said “past performance is not an indicator of future performance” and for liquid mutual funds, if one were to try to do some projections, all they have to do is to look at the portfolio. The kind of securities (Commercial Papers (CPs), Certificate of Deposits(CDs) etc.), credit quality and the yield gives an idea of what the return profile of the fund could be. The portfolio quality is a good indicator of the performance of the liquid fund. The maturity of all liquid Mutual Funds is usually a couple of days and much less than 91 days. In most cases it is similar.

3. Liquidity & Size Of Fund

FundNAVNet Assets (Cr)1 MO (%)3 MO (%)6 MO (%)1 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
BOI AXA Liquid Fund Growth ₹2,464.71
↑ 0.35
₹3180.41.22.13.83.35.29%1M 17D1M 20D
IDBI Liquid Fund Growth ₹2,305.9
↑ 0.30
₹6500.41.223.83.44.73%25D25D
Baroda Pioneer Liquid Fund Growth ₹2,467.24
↑ 0.33
₹5,8300.41.223.83.35.3%1M 13D1M 17D
Axis Liquid Fund Growth ₹2,384.38
↑ 0.30
₹22,4260.41.223.83.34.75%1M 3D1M 3D
Mahindra Liquid Fund Growth ₹1,394.76
↑ 0.18
₹1,2300.41.223.73.30%
JM Liquid Fund Growth ₹58.6239
↑ 0.01
₹1,9000.41.123.73.35.11%1M 8D1M 11D
UTI Liquid Cash Plan Growth ₹3,516.98
↑ 0.48
₹27,5860.41.123.73.34.7%1M 2D1M 4D
DSP BlackRock Liquidity Fund Growth ₹3,061.89
↑ 0.40
₹8,8510.41.223.73.35.12%1M 6D1M 13D
Mirae Asset Cash Management Fund Growth ₹2,248.78
↑ 0.29
₹3,4720.41.223.73.35.1%1M 10D1M 11D
Aditya Birla Sun Life Liquid Fund Growth ₹345.35
↑ 0.05
₹36,7350.41.123.73.35.26%1M 17D1M 17D
Invesco India Liquid Fund Growth ₹2,946.97
↑ 0.39
₹3,6430.41.123.73.35%1M 4D1M 6D
IDFC Cash Fund Growth ₹2,593.92
↑ 0.36
₹13,8500.41.123.73.25.05%1M 12D1M 13D
PGIM India Insta Cash Fund Growth ₹279.245
↑ 0.04
₹6240.41.223.73.34.61%20D22D
Canara Robeco Liquid Growth ₹2,578.24
↑ 0.31
₹1,9060.41.123.73.24.87%21D22D
SBI Liquid Fund Growth ₹3,357.87
↑ 0.42
₹60,1870.41.123.73.34.66%25D29D
HDFC Liquid Fund Growth ₹4,210.88
↑ 0.55
₹50,1290.41.123.73.25.11%1M 17D1M 17D
Tata Liquid Fund Growth ₹3,379.99
↑ 0.43
₹15,4120.41.123.73.24.77%29D29D
Nippon India Liquid Fund  Growth ₹5,237.37
↑ 0.71
₹27,7030.41.123.73.25.12%1M 15D1M 17D
Principal Cash Management Fund Growth ₹1,893.16
↑ 0.24
₹2,3630.41.123.73.25.14%1M 5D1M 5D
ICICI Prudential Liquid Fund Growth ₹317.593
↑ 0.04
₹43,5020.41.123.73.24.74%28D1M
Kotak Liquid Fund Growth ₹4,339.52
↑ 0.58
₹36,1760.41.123.73.25.08%1M 13D1M 13D
LIC MF Liquid Fund Growth ₹3,880.25
↑ 0.47
₹5,3840.41.123.63.35.11%1M 9D1M 9D
IIFL Liquid Fund Growth ₹1,657.4
↑ 0.23
₹9950.41.123.634.63%25D26D
Edelweiss Liquid Fund Growth ₹2,746.69
↑ 0.37
₹1,3170.41.11.93.53.24.72%27D27D
Indiabulls Liquid Fund Growth ₹2,079.02
↑ 0.26
₹2290.41.11.93.43.14.35%17D18D
Sundaram Money Fund Growth ₹44.1929
↑ 0.00
₹3,1440.30.81.73.3 3.5%1M 2D1M 2D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Aug 22

The asset break-up between individuals and corporates is somewhat important to see if the liquid Mutual Funds can Handle large redemptions. Large redemptions (at times 100s or 1000s of crores can also be taken place by corporates) can place pressures on the portfolio. At times of liquidity crisis, it would be difficult to find buyers for such a large quantity.

In fact, to ensure that the portfolio does not get impacted on price, liquid funds moved from mark to market to accrual-based Accounting post the Lehman crisis in 2008.

Also, the size of fund protects investors here on Redemption pressures since SEBI has a rule that the highest individual holding in a scheme cannot exceed 20%. Hence, most schemes would be protected to an extent.

Top 5 Liquid Funds

Best performing liquid funds for 2022 are-

FundNAVNet Assets (Cr)1 MO (%)3 MO (%)6 MO (%)1 YR (%)2021 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
BOI AXA Liquid Fund Growth ₹2,464.71
↑ 0.35
₹3180.41.22.13.83.35.29%1M 17D1M 20D
IDBI Liquid Fund Growth ₹2,305.9
↑ 0.30
₹6500.41.223.83.44.73%25D25D
Baroda Pioneer Liquid Fund Growth ₹2,467.24
↑ 0.33
₹5,8300.41.223.83.35.3%1M 13D1M 17D
Axis Liquid Fund Growth ₹2,384.38
↑ 0.30
₹22,4260.41.223.83.34.75%1M 3D1M 3D
Mahindra Liquid Fund Growth ₹1,394.76
↑ 0.18
₹1,2300.41.223.73.30%
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Aug 22

4. Performance Rating Of Liquid Mutual Funds

Performance ratings unless taking into account the current portfolio and the future outlook won’t be able to differentiate tomorrow’s winners from the losers. So, while backward-looking ratings can give an idea about past performance, one can use these as a measure at best for de-selecting a fund.

Conclusion

While looking for liquid mutual funds one needs to look a number of factors and then choose the relevant fund.

Disclaimer: Please consult your advisor and do independent research before making any investment decision.

Disclaimer:
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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