Short Term Mutual Fund Investment

What Are Best Short Term Mutual Funds

The best short term mutual funds are debt schemes that invest in securities with maturity duration of 1-3 years. Short term mutual funds invest in low risk, high-quality securities. They best suit investors who prefer little to moderate risk with moderate returns. Short term mutual funds are an alternative to a savings bank account and fixed deposits as they give slightly better returns than these and have high liquidity. Within short term mutual funds, investors with horizon less than 91 days can opt for the liquid fund, ultra short term bond funds for the horizon of 3-6 months, low duration funds for the horizon of 6-12 months, and short duration funds for 1-3 years.

Nippon India Mutual Fund

As on Jun 30, 2022

• Phone: 1800-300-11111
• Address: NG-1 & 1A, North BlockManipal Centre,Dickenson Road,

• National Bank For Agriculture & Rural Development

  2.92%

• Small Industries Devp. Bank of India Ltd.

  2.28%

• Reliance Ports and Terminals Ltd

  1.51%

• John Deere Financial India Pvt. Ltd.

  1.45%

• AU Small Finance Bank Ltd.

  1.14%

• Reliance Jio Infratel Pvt. Ltd.

  0.76%

• National Thermal Power Corp. Ltd.

  0.46%

• Housing Development Finance Corpn. Ltd.

  0.38%

• Indian Railway Finance Corpn. Ltd.

  0.04%

Import external investments on ET Money to:

• Manage all your investments in one place
• View and track fund details, updates and more
• Switch to direct and earn upto 1% extra returns

It’s about your money!Take our Free Investor Personality Test. Know how to make investment decisions that are right for you

You have already selected 4 funds. Please remove a selected fund to compare this one.

The Nippon India Short-term Fund is a 9 yrs 9 m old fund and has delivered average annual returns of 8.14% since inception.

Axis Short Term Fund Returns

NAV or Net Asset Value is the per-unit price of the Mutual Fund. The NAV of a Mutual Fund changes every day. It is calculated by taking the current value of the holdings of the fund at end of the day, subtracting the expenses, and dividing the value by the number of units issued to date.

The NAV of Axis Short Term Fund for Sep 30, 2022 is 27.0722.

Axis Short Term Fund has an ET Money Rank of # 1 of 22 and a consistency rating of 4.

This indicates the fund has not only delivered solid returns in the past but has done so with exceptional consistency. All this means Axis Short Term Fund can be a good addition to your portfolio.

On ET Money, Investing in Axis Short Term Fund is fast, easy, and 100% paperless. And it takes only minutes. Here is what you need to do –

The Expense Ratio of the direct plan of Axis Short Term Fund is 0.3%. .

If you have invested in Axis Short Term Fund from anywhere else, you can go to the fund house website and put a request through it.

Recommended Reading: Gw& k Investment Management Reviews

What Are Short Duration Funds

Short duration funds are debt mutual fund schemes which invest in debt and money market securities such that the Macaulay Duration of the scheme is 1 to 3 years. The investment objective of these funds is income generation through accrual over the maturity term of the instruments in the scheme portfolio. These funds have moderately low interest rate risk. The credit risk of short duration funds may vary from scheme to scheme depending on the credit quality of the underlying instruments.

Taxation Rules Of Short Term And Long Term Investments

The definition of short term vs. long term investment from a taxation perspective depends on whether you are invested in an or a debt mutual fund. According to existing rules, a short term investment in an equity fund is for a period of 1 year or less calculated from the date of unit allotment.

Therefore, in case you have held equity fund units for a period of over 1 year from the date of unit allotment, they would qualify as long-term investments. In case you redeem or switch your mutual fund units before the completion of 1 year from the date of unit allotment, you are liable to pay 15% tax on profits as short term capital gains.

At present i.e. profits from equity investments that have been held for over a year are taxed at 10% If net profits of redeemed unit exceeds Rs. 1 lakh. However, if the long-term gains are any less than Rs. 1 lakh, they are treated as tax-exempt gains.

The definition of short term and long term with respect to non-equity investments such as debt investments is completely different. For debt funds, the short-term refers to investments that have been held for 3 years or less. In case non-equity investments have been held for over 3 years from the date of unit allotment, long-term capital gains rules apply.

Read more: about Mutual fund tax benefits

Our observation

Recommended Reading: How To Invest In Cryptocurrency Mutual Funds

Best Short Term Mutual Funds For Investing

• Akshatha Sajumon

Short-term mutual funds are a part of the debt category mutual funds. They invest in a range of debt securities such as corporate bonds, securitized debt, government securities, derivatives, bonds of financial institutions, and public sector undertakings . They also have investments in money market instruments like T- bills, commercial paper, certificate of deposits , etc. The duration of the funds portfolio is between 1 to 3 years.

When Should You Book Profits

Investments in mutual funds should be based on financial goals.

If you have achieved your financial goal, then you can book profits or redeem your units to utilize the amount for that specific goal, or you can book profits when you are near your goals, and you have achieved your financial target, or if your fund is underperforming.

In such scenarios, you can book profits. Majorly investments in mutual funds are for long-term financial goals. You should avoid booking short-term profits on your SIP.

Additional read: What are alternate investment funds?

You May Like: How Do I Invest In The Canadian Stock Market

Hdfc Short Term Debt Fund

DEBT SHORT DURATION

• Amar Kalkundrikar

  Mr. Kalkundrikar has done B.Com, CA, CFA, and MBA from Columbia Business School.

  Prior to joining Nippon India Mutual Fund, he has worked with HDFC Asset Management Company Limited where he has handled multiple roles in Investment ??? Equity function such as Portfolio Management for PMS business, & performing Equity research in various sectors such as Consumer Staples, Consumer Discretionary, Retail, Construction Materials.

What Are Short Term Mutual Fund

Mutual Fund Schemes enabling the customers with a short-term investment avenue of up to 4 years are generally termed as short-term mutual funds. These are financial schemes whose portfolio consists of securities offering a maturity period from 15 days up to a maximum of 91 days. This mutual fund scheme is an investment instrument that facilitates stable returns with low to moderate risk. This piece features a brief on the Short-Term Mutual Funds. These fund schemes have been specifically designed to earn stable returns over a short time period.

Many times, a Short Term Mutual Fund scheme has been compared to Fixed Deposits since the investment returns of both these schemes are very identical.

Even though the Short term debt funds are riskier instruments when compared with Fixed Deposits, in terms of tax efficiency, liquidity, as well as, stable returns, these mutual fund schemes edge out the fixed deposits.

Investors with very short horizons 15 days or less can opt for the liquid funds, whereas investors looking for a greater investment period say 2 to 3 months can choose from a wide-range of ultra-short-term funds. Debt fund investments have produced an annual return of 10% in contrast to fixed deposit schemes who yield a mere 7% of annualized returns.

You May Like: Allentown Pa Real Estate Investing

Taxation Of Short Term Mutual Funds

There are mainly two ways in which investors earn by investing in short-duration debt mutual funds.

Dividend income is taxable as per the individuals applicable slab rates. Capital gains are taxable, too, but the rate depends on the length of the time that the investor holds the units of the debt funds. Here are the two broad tax categories on income from short term mutual funds:

Investors also benefit from indexation in the case of long-term gains, which reduces the overall tax amount.

What Factors One Should Look In A Short Term Fund Before Investing

Investors should look at expense ratio , duration and credit quality of a short term fund before investing. Higher TER will impact scheme returns and hence lower TER is preferable. Longer the duration of a fund, more sensitive it will be to interest rate changes. You should select funds according to your risk appetite. Credit quality is one of the most important factors to be considered when investing in short term funds. Though lower rated bonds give higher yields, the risk of making a loss is also higher. You should try to invest in funds with high credit quality.

You May Like: Real Estate Investment Firms San Diego

Don’t Miss: Fisher Investments Assets Under Management

About Nippon India Short

• Nippon India Short Term Fund Direct-Growth returns of last 1-year are 3.10%. Since launch, it has delivered 8.14% average annual returns. The fund has doubled the money invested in it every 9 yrs.
• Nippon India Short Term Fund Direct-Growth scheme’s ability to deliver returns consistently is higher than most funds of its category. Its ability to control losses in a falling market is above average.
• The fund’s credit profile is high indicating it has lent to borrowers whose quality is great. Most funds in this category lend to better borrowers and hence the risk of default in this fund is higher than the category.
• The fund’s top holdings are in GOI, India Infradebt Ltd., LIC Housing Finance Ltd., India Grid Trust, National Bank For Agriculture & Rural Development.

Answer a few simple questions and understand why you take the financial decisions you do.

You would have earned 1,001 more by investing in ET Money Direct Plan

Disclaimer: Products compared like fixed deposits may provide fixed guaranteed returns. Mutual Funds investments are subject to market risk, read all scheme related documents carefully. Past performance is not an indicator of future returns.

Short Term Mutual Funds

Let us understand the concept of short term debt funds in india with the help of the following example. Rakesh is having an extra amount of Rs. 50,000 due to the maturity of an RD. He would not be requiring the amount for the next 3-5 years, but is not willing to invest in the equity schemes owing to their risky profile. Also, the investment perspective will not provide the required returns to him if he invests in any plans other than short term debt funds. The maturity period of a short term debt funds may vary from 3 to 5 years, depending on the portfolio of a particular companys debt funds asset allocation. Thus, the time duration coincides with the time constraint requirements of Rakesh. In addition, to the time, he would get a return on his debt mutual funds online investment which would amount to near about 10-12% annually which is far more than any bank can offer.

Don’t Miss: Investment Account Vs Retirement Account

Mutual Funds For Long Term Investment

In case you are planning to invest for the long term i.e for 5 years or even more like for retirement planning, it is recommended to invest in equity funds such as large-cap funds, diversified equity funds and equity-linked savings schemes .

The benefit in case of long-term equity investments is two-fold. Firstly, no tax is payable in case the investment is held for over a year and secondly the power of compounding works in your favour. Historic data regarding equity fund investments show that those staying invested in equities over the long term have a significantly greater chance of earning higher profits as compared to short term equity investments.

It is, however, worth pointing out that the value of your equity investment will not go up at the same rate during the period you stay invested in the scheme. Some years might feature annual returns of over 20% while during other years the scheme might feature annual returns of 10% or less. Though on average, those staying invested for a longer term are potentially better placed to make their initial investment grow significantly.

Sahara Liquid Fund Variable Pricing Direct

Sahara Liquid Variable Pricing Option Growth is a Debt Mutual Fund Scheme launched by Sahara Mutual Fund. This scheme was made available to investors on 18 Jul 1996. The scheme aims to provide high liquidity and reasonable returns through a highly liquid portfolio of good quality debt as well as money market instruments.

Don’t Miss: Hedge Funds Investing In Residential Real Estate

Things To Consider Before Investing In Short Duration Funds

Short duration funds are the entry-point vehicle for investors who do not mind taking on some interest rate risk in exchange for higher returns. In general, these funds generate stable incomes in the short term. However, fund values can show a lot of volatility if there are unanticipated changes in interest rates. For example, suppose a rate cut is widely expected. Market rates will start declining, and fund managers will increase their holdings of long-term debt. Now, if the RBI unexpectedly pauses in its rate action , yields in the market will correct by rising up again. This will result in a fall in fund value, which will not be reversed until rates decline again and/or fund value is restored by the accumulated interest income of the fund. Thus, investors must be aware that short duration funds experience periodic episodes of volatility and this must be factored into their investment decision.

Some short duration funds may carry higher credit risk than others, which may expose the fund to the risk of default and possibly, loss of value. During the recent NBFC crisis, there were instances of value erosion among debt funds due to default on the part of bond issuers. Investors must keep in mind that returns on short duration funds are not assured, and that past performance is no guarantee for future returns.

Hdfc Short Term Debt Fund Returns

NAV or Net Asset Value is the per-unit price of the Mutual Fund. The NAV of a Mutual Fund changes every day. It is calculated by taking the current value of the holdings of the fund at end of the day, subtracting the expenses, and dividing the value by the number of units issued to date.

The NAV of HDFC Short Term Debt Fund for Sep 30, 2022 is 26.5571.

HDFC Short Term Debt Fund has an ET Money Rank of # 7 of 22 and a consistency rating of 4.

This indicates the fund has generated average returns. However, whatever returns the fund delivers, it does so with exceptional consistency. You can consider this fund if the predictability of returns is what you are looking for

On ET Money, Investing in HDFC Short Term Debt Fund is fast, easy, and 100% paperless. And it takes only minutes. Here is what you need to do –

The Expense Ratio of the direct plan of HDFC Short Term Debt Fund is 0.29%. .

You May Like: 13 Investment Blunders To Avoid

Faqs On Short Term Mutual Funds

What Should I know regarding my long-term mutual fund investment plan.

If you want to take the advantage of interest rate cycles over a long period of time, opt for a Dynamic bond fund.

What should be my first move towards safeshort-term mutual fund investment?

Investment experts ask investors to shortlist schemes first, based on their investment horizon.

Risk Reduction Mantra for Me

Choose liquid funds for a short horizon. Here interest rate risk and credit risk are almost nil.Choose credit opportunity fund for 3-year return horizons.

How Should I maximise good investment opportunities?

Keep good credit rating. It will help you to reduce the credit risk. Such policy carriers release the portfolio of the mutual fund schemes 3-4 times every year.

What is an Ultra Short-Term Fund?

These investments are made into fixed-income instruments that are largely liquid and are backed up by a short-term maturity. While Ultra Short-Term Funds go towards helping investors overcome risky interest rates, they also promise improved returns compared to other instruments.

What are short term bond funds?

Short-term bond funds are funds that invest in bonds for a duration spanning less than 5 years. These can be in the form of investments in commercial papers, certificates of deposits, etc. Rates of interest given by these funds are lower in comparison to long-term bond fund since there is limited maturity period in these short-term bonds.

What is short term debt fund?