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Short Duration Funds
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Short Duration Debt Mutual Funds are suitable for investors who wish to invest for periods around 1 year.
Since these are debt funds, returns are not linked to the stock market or the equity shares market.
Since these are debt funds, the returns will be in the form of short or long term capital gains and are taxable.
Since these are debt instruments, generally timing is not important and investment can be made as a lumpsum.
Contents
Examples of Short Duration Funds
- Franklin India Short Term Income Plan - Direct Plan
- HDFC Short Term Debt Fund
- DHFL Pramerica Short Maturity Fund
Saving money to fund down payment for home
I want to save some money for a period of 2 1/2 years to fund for a down payment for a house. Which financial instrument is good?*
Since the time frame for the goal is less than 3 years, we should never try equity asset class.
Instead, we can use the debt asset class.
Within the debt asset class, I would prefer Short Duration Funds.
For example, *Aditya Birla Sun Life Short Term Opportunities Fund - Direct Plan* is one such fund.
You can invest when ever you have some excess money to the scheme.
The scheme returns are around 8 to 9% CAGR. They give slighly better than the fixed deposit returns.
When withdrawing funds, just ensure that the holding is held for a minimum of 90 days. First In First Out.
Exit Load: For units in excess of 15% of the investment, 0.5% will be charged for redemption within 90 days
Birla Sunlife Short Term Fund
- Birla Sunlife Short Term Fund is an okay short term debt fund.
- Gave 9.87% returns which is ok
- No entry/exit load. So highly liquid.
- Close to 17k cr assets.
- Go for DIRECT plan - GROWTH option
Liquid or Short term funds for 6-months
Advice on liquid fund or short term fund which gives better return than fd. I want to invest for 6 months
6 months is too short a period for investing for a retail investor because most retail investors might not be patient enough.
If your financial goal is a really important one and cannot afford to miss it, better to go for an FD itself.
However, if you wish to take some chance and the risks associated with debt mutual fund schemes and interest-rate volatility, you may go for Short Term Debt Funds.
The average returns of the category at around 9% while the best ones gave around 12%.
Some good picks from the category at the moment are
- Franklin India Low Duration Fund (90-day exit load)
- UTI Banking & PSU Debt Fund (no exit load)
- Birla Sun Life Short Term Opportunities Fund (has a six months exit load)
- DHFL Pramerica Short Maturity Fund (six-month exit load)
All the schemes have a minimum of Rs 1000 cr or over AUM.
As usual, invest on your own from the mutual fund website. Go for Direct Plan - Growth Option
- Dated: March 20, 2017
Related Topics
- Equity Mutual Funds
- Debt Mutual Funds
- Balanced Funds
- Diversified Equity Funds
- Equity Linked Savings Schemes (ELSS)
- Liquid Mutual Fund Schemes
- Arbitrage Mutual Fund Schemes
- Monthly Income Plans
- Exchange Traded Funds
- International Mutual Fund Schemes
- Smallcap Mutual Fund Schemes
- Thematic Mutual Fund Schemes