Updated on August 26, 2021 , 19164 views

Generally, people believe that Mutual Fund investments are for long-term investors. Well, thats not true! There is a category of funds called Short Duration Funds or Short Term Debt fund that allow investors to invest for short-term along with keeping their money accessible. Though there are various Short Duration Funds available in the market, investors are suggested to look for best Short Duration (Short Term) Debt Funds.

The best Short Duration (Short Term) Debt Funds are funds that allow investors to invest for a short term, typically for three years, to earn good returns with less market risk. These funds are highly suitable investors with a low-risk appetite who seek quick returns and a steady flow of Income without being affected by the daily changes in the bond markets.

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Best Short Duration Funds or Short Term Debt Funds FY 21 - 22

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2020 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
HDFC Short Term Debt Fund Growth ₹25.2053
↑ 0.00
₹18,6841.33.36.28.7 5.08%2Y 1M 17D2Y 11M 12D
Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹37.5128
↑ 0.01
₹8,2541.43.37.18.5 0%
ICICI Prudential Short Term Fund Growth ₹46.9258
↑ 0.03
₹20,7931.12.96.18.5 5.43%2Y 4M 24D4Y 1M 10D
Axis Short Term Fund Growth ₹24.4338
↑ 0.01
₹12,0941.12.75.48.3 4.87%1Y 10M 17D2Y 10M 24D
IDFC Bond Fund Short Term Plan Growth ₹45.6181
↑ 0.01
₹13,5111.12.94.98.2 4.65%1Y 10M 10D2Y 1M 20D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 27 Aug 21
*List Funds based on Assets >= 100 Crore & Sorted on 3 Year CAGR Return.

1. HDFC Short Term Debt Fund

(Erstwhile HDFC Short Term Opportunities Fund)

To generate regular income through investments in Debt/Money Market Instruments and Government Securities with maturities not exceeding 36 months.

HDFC Short Term Debt Fund is a Debt - Short term Bond fund was launched on 25 Jun 10. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 8.6% since its launch.  Ranked 30 in Short term Bond category. .

Below is the key information for HDFC Short Term Debt Fund

HDFC Short Term Debt Fund
Growth
Launch Date 25 Jun 10
NAV (27 Aug 21) ₹25.2053 ↑ 0.00   (0.02 %)
Net Assets (Cr) ₹18,684 on 31 Jul 21
Category Debt - Short term Bond
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.39
Sharpe Ratio 1
Information Ratio 0.08
Alpha Ratio 0.13
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 5.08%
Effective Maturity 2 Years 11 Months 12 Days
Modified Duration 2 Years 1 Month 17 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 16₹10,000
31 Jul 17₹10,822
31 Jul 18₹11,428
31 Jul 19₹12,483
31 Jul 20₹13,947
31 Jul 21₹14,686

HDFC Short Term Debt Fund SIP Returns

Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125

Invest Now

Returns for HDFC Short Term Debt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Aug 21

DurationReturns
1 Month 0.5%
3 Month 1.3%
6 Month 3.3%
1 Year 6.2%
3 Year 8.7%
5 Year 8%
10 Year
15 Year
Since launch 8.6%
Historical performance (Yearly) on absolute basis
YearReturns
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
Fund Manager information for HDFC Short Term Debt Fund
NameSinceTenure
Anil Bamboli25 Jun 1011.11 Yr.
Sankalp Baid22 Jan 210.52 Yr.

Data below for HDFC Short Term Debt Fund as on 31 Jul 21

Asset Allocation
Asset ClassValue
Cash23.91%
Debt76.09%
Debt Sector Allocation
SectorValue
Corporate46.16%
Government30.02%
Cash Equivalent22.52%
Securitized1.29%
Credit Quality
RatingValue
AA17.77%
AAA82.23%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
6.79% Govt Stock 2027
Sovereign Bonds | -
2%₹413 Cr40,000,000
↑ 40,000,000
5.77% GOI 2030
Sovereign Bonds | -
2%₹372 Cr38,500,000
↑ 38,500,000
Housing Development Finance Corporation Limited
Debentures | -
2%₹358 Cr3,500
↑ 3,500
6.97% Govt Stock 2026
Sovereign Bonds | -
2%₹349 Cr33,500,000
↑ 33,500,000
Housing Development Finance Corporation Limited
Debentures | -
2%₹310 Cr3,000
↑ 3,000
Indinfravit Trust
Debentures | -
2%₹296 Cr2,900
↑ 2,900
State Bank of India
Debentures | -
2%₹290 Cr2,750
↑ 2,750
Rural Electrification Corporation Limited
Debentures | -
1%₹258 Cr2,500
↑ 2,500
State Bank of India
Debentures | -
1%₹256 Cr2,500
↑ 2,500
Motherson Sumi Systems Limited
Debentures | -
1%₹253 Cr2,500
↑ 2,500

2. Aditya Birla Sun Life Short Term Opportunities Fund

An Open ended Income scheme with the objective to generate regular income by investing primarily in investment grade fixed income securities / money market instruments with short to medium term maturities and across the credit spectrum within the universe of investment grade rating.

Aditya Birla Sun Life Short Term Opportunities Fund is a Debt - Short term Bond fund was launched on 9 May 03. It is a fund with Moderate risk and has given a CAGR/Annualized return of 7.5% since its launch.  Ranked 18 in Short term Bond category. .

Below is the key information for Aditya Birla Sun Life Short Term Opportunities Fund

Aditya Birla Sun Life Short Term Opportunities Fund
Growth
Launch Date 9 May 03
NAV (27 Aug 21) ₹37.5128 ↑ 0.01   (0.03 %)
Net Assets (Cr) ₹8,254 on 15 Aug 21
Category Debt - Short term Bond
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderate
Expense Ratio 1.13
Sharpe Ratio 1.35
Information Ratio -0.13
Alpha Ratio 1.11
Min Investment 1,000
Min SIP Investment 1,000
Exit Load 0-90 Days (0.5%),90 Days and above(NIL)
Yield to Maturity 0%
Effective Maturity
Modified Duration

Growth of 10,000 investment over the years.

DateValue
31 Jul 16₹10,000
31 Jul 17₹10,842
31 Jul 18₹11,307
31 Jul 19₹12,390
31 Jul 20₹13,605
31 Jul 21₹14,440

Aditya Birla Sun Life Short Term Opportunities Fund SIP Returns

Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125

Invest Now

Returns for Aditya Birla Sun Life Short Term Opportunities Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Aug 21

DurationReturns
1 Month 0.6%
3 Month 1.4%
6 Month 3.3%
1 Year 7.1%
3 Year 8.5%
5 Year 7.5%
10 Year
15 Year
Since launch 7.5%
Historical performance (Yearly) on absolute basis
YearReturns
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
Fund Manager information for Aditya Birla Sun Life Short Term Opportunities Fund
NameSinceTenure
Kaustubh Gupta11 Sep 146.89 Yr.
Mohit Sharma6 Aug 200.98 Yr.

Data below for Aditya Birla Sun Life Short Term Opportunities Fund as on 15 Aug 21

Asset Allocation
Asset ClassValue
Cash19.25%
Debt80.75%
Debt Sector Allocation
SectorValue
Corporate50.24%
Government31.15%
Cash Equivalent18.61%
Credit Quality
RatingValue
A1.05%
AA15.05%
AAA83.76%
Below B0.14%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Reliance Industries Limited
Debentures | -
3%₹217 Cr2,100
↑ 2,100
GOVT STOCK
Sovereign Bonds | -
3%₹210 Cr21,000,000
↑ 21,000,000
8.60% Bihar SDL 2026
Sovereign Bonds | -
2%₹174 Cr15,887,000
↑ 15,887,000
8.15% Govt Stock 2026
Sovereign Bonds | -
2%₹159 Cr14,500,000
↑ 14,500,000
National Bank For Agriculture And Rural Development
Debentures | -
2%₹150 Cr1,500
↑ 1,500
Rural Electrification Corporation Limited
Debentures | -
2%₹142 Cr1,400
↑ 1,400
Shriram Transport Finance Company Limited
Debentures | -
2%₹140 Cr1,400
↑ 1,400
Embassy Office Parks REIT
Debentures | -
2%₹125 Cr1,250
↑ 1,250
6.90% Oil Mktg Cos GOI Sb 2026
Domestic Bonds | -
1%₹107 Cr10,397,000
↑ 10,397,000
Reliance Industries Limited
Debentures | -
1%₹104 Cr1,000
↑ 1,000

3. ICICI Prudential Short Term Fund

To generate income through investments in a range of debt and money market instruments of various maturities with a view to maximising income while maintaining the optimum balance of yield, safety and liquidity.

ICICI Prudential Short Term Fund is a Debt - Short term Bond fund was launched on 25 Oct 01. It is a fund with Moderate risk and has given a CAGR/Annualized return of 8.1% since its launch.  Ranked 11 in Short term Bond category. .

Below is the key information for ICICI Prudential Short Term Fund

ICICI Prudential Short Term Fund
Growth
Launch Date 25 Oct 01
NAV (27 Aug 21) ₹46.9258 ↑ 0.03   (0.06 %)
Net Assets (Cr) ₹20,793 on 31 Jul 21
Category Debt - Short term Bond
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 1.15
Sharpe Ratio 0.99
Information Ratio -0.3
Alpha Ratio 0.18
Min Investment 5,000
Min SIP Investment 1,000
Exit Load 0-7 Days (0.25%),7 Days and above(NIL)
Yield to Maturity 5.43%
Effective Maturity 4 Years 1 Month 10 Days
Modified Duration 2 Years 4 Months 24 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 16₹10,000
31 Jul 17₹10,916
31 Jul 18₹11,350
31 Jul 19₹12,384
31 Jul 20₹13,778
31 Jul 21₹14,482

ICICI Prudential Short Term Fund SIP Returns

Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125

Invest Now

Returns for ICICI Prudential Short Term Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Aug 21

DurationReturns
1 Month 0.6%
3 Month 1.1%
6 Month 2.9%
1 Year 6.1%
3 Year 8.5%
5 Year 7.6%
10 Year
15 Year
Since launch 8.1%
Historical performance (Yearly) on absolute basis
YearReturns
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
Fund Manager information for ICICI Prudential Short Term Fund
NameSinceTenure
Manish Banthia19 Nov 0911.71 Yr.
Nikhil Kabra29 Dec 200.59 Yr.

Data below for ICICI Prudential Short Term Fund as on 31 Jul 21

Asset Allocation
Asset ClassValue
Cash14.1%
Debt85.9%
Debt Sector Allocation
SectorValue
Government46.09%
Corporate39.02%
Cash Equivalent14.1%
Securitized0.79%
Credit Quality
RatingValue
AA18.06%
AAA81.94%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
6.64% Govt Stock 2035
Sovereign Bonds | -
8%₹1,712 Cr172,352,600
↑ 172,352,600
National Bank For Agriculture And Rural Development
Debentures | -
4%₹902 Cr9,000
↑ 9,000
182 DTB 09122021
Sovereign Bonds | -
4%₹738 Cr75,000,000
↑ 75,000,000
6.79% Govt Stock 2027
Sovereign Bonds | -
3%₹714 Cr69,125,000
↑ 69,125,000
GOVT STOCK
Sovereign Bonds | -
3%₹680 Cr68,000,000
↑ 68,000,000
Pipeline Infrastructure Private Limited
Debentures | -
2%₹443 Cr4,129
↑ 4,129
Housing Development Finance Corporation Limited
Debentures | -
2%₹422 Cr4,096
↑ 4,096
GOI Floating Rate Bond 2024
Sovereign Bonds | -
2%₹380 Cr38,500,000
↑ 38,500,000
07.19 UP SDL 2031
Sovereign Bonds | -
2%₹377 Cr37,000,000
↑ 37,000,000
182 DTB 30122021
Sovereign Bonds | -
1%₹295 Cr30,000,000
↑ 30,000,000

4. Axis Short Term Fund

To generate stable returns with a low risk strategy while maintaining liquidity through a portfolio comprising of debt and money market instruments. However, there can be no assurance that the investment objective of the scheme will be achieved.

Axis Short Term Fund is a Debt - Short term Bond fund was launched on 22 Jan 10. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 8% since its launch.  Ranked 26 in Short term Bond category. .

Below is the key information for Axis Short Term Fund

Axis Short Term Fund
Growth
Launch Date 22 Jan 10
NAV (27 Aug 21) ₹24.4338 ↑ 0.01   (0.03 %)
Net Assets (Cr) ₹12,094 on 31 Jul 21
Category Debt - Short term Bond
AMC Axis Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.92
Sharpe Ratio 0.74
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 4.87%
Effective Maturity 2 Years 10 Months 24 Days
Modified Duration 1 Year 10 Months 17 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 16₹10,000
31 Jul 17₹10,823
31 Jul 18₹11,332
31 Jul 19₹12,401
31 Jul 20₹13,775
31 Jul 21₹14,411

Axis Short Term Fund SIP Returns

Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125

Invest Now

Returns for Axis Short Term Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Aug 21

DurationReturns
1 Month 0.5%
3 Month 1.1%
6 Month 2.7%
1 Year 5.4%
3 Year 8.3%
5 Year 7.5%
10 Year
15 Year
Since launch 8%
Historical performance (Yearly) on absolute basis
YearReturns
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
Fund Manager information for Axis Short Term Fund
NameSinceTenure
Devang Shah5 Nov 128.74 Yr.

Data below for Axis Short Term Fund as on 31 Jul 21

Asset Allocation
Asset ClassValue
Cash9.08%
Debt90.92%
Debt Sector Allocation
SectorValue
Corporate49.86%
Government41.4%
Cash Equivalent7.49%
Securitized1.25%
Credit Quality
RatingValue
AA9.25%
AAA90.75%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
National Bank For Agriculture And Rural Development
Debentures | -
5%₹586 Cr5,850
↑ 5,850
Food Corporation of India
Debentures | -
4%₹473 Cr4,550
↑ 4,550
GOVT STOCK
Sovereign Bonds | -
3%₹382 Cr38,162,000
↑ 38,162,000
7.27% Govt Stock 2026
Sovereign Bonds | -
3%₹327 Cr31,000,000
↑ 31,000,000
7.42% MH SDL 2022
Sovereign Bonds | -
2%₹301 Cr29,247,500
↑ 29,247,500
8.83% Govt Stock 2023
Sovereign Bonds | -
2%₹283 Cr26,025,000
↑ 26,025,000
Housing Development Finance Corporation Limited
Debentures | -
2%₹274 Cr2,680
↑ 2,680
Mahindra Rural Housing Finance Limited
Debentures | -
2%₹249 Cr2,500
↑ 2,500
6.64% Govt Stock 2035
Sovereign Bonds | -
2%₹248 Cr25,000,000
↑ 25,000,000
State Bank Of India
Debentures | -
2%₹202 Cr2,050
↑ 2,050

5. IDFC Bond Fund Short Term Plan

(Erstwhile IDFC Super Saver Income Fund - Short Term Plan)

The primary investment objective of the scheme is to seek to generate stable returns with a low-risk strategy by creating a portfolio that is invested in good quality fixed income & Money Market securities. However, there can be no assurance that the investment objectives of the scheme will be realized.

IDFC Bond Fund Short Term Plan is a Debt - Short term Bond fund was launched on 14 Dec 00. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 7.6% since its launch.  Ranked 47 in Short term Bond category. .

Below is the key information for IDFC Bond Fund Short Term Plan

IDFC Bond Fund Short Term Plan
Growth
Launch Date 14 Dec 00
NAV (27 Aug 21) ₹45.6181 ↑ 0.01   (0.02 %)
Net Assets (Cr) ₹13,511 on 31 Jul 21
Category Debt - Short term Bond
AMC IDFC Asset Management Company Limited
Rating
Risk Moderately Low
Expense Ratio 0.8
Sharpe Ratio 0.45
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 4.65%
Effective Maturity 2 Years 1 Month 20 Days
Modified Duration 1 Year 10 Months 10 Days

Growth of 10,000 investment over the years.

DateValue
31 Jul 16₹10,000
31 Jul 17₹10,772
31 Jul 18₹11,256
31 Jul 19₹12,343
31 Jul 20₹13,694
31 Jul 21₹14,274

IDFC Bond Fund Short Term Plan SIP Returns

Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125

Invest Now

Returns for IDFC Bond Fund Short Term Plan

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Aug 21

DurationReturns
1 Month 0.5%
3 Month 1.1%
6 Month 2.9%
1 Year 4.9%
3 Year 8.2%
5 Year 7.3%
10 Year
15 Year
Since launch 7.6%
Historical performance (Yearly) on absolute basis
YearReturns
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
Fund Manager information for IDFC Bond Fund Short Term Plan
NameSinceTenure
Suyash Choudhary11 Mar 1110.4 Yr.

Data below for IDFC Bond Fund Short Term Plan as on 31 Jul 21

Asset Allocation
Asset ClassValue
Cash15.85%
Debt84.15%
Debt Sector Allocation
SectorValue
Government43.96%
Corporate40.15%
Cash Equivalent15.38%
Securitized0.51%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
6.97% Govt Stock 2026
Sovereign Bonds | -
15%₹2,073 Cr198,900,000
↑ 198,900,000
Reliance Industries Limited
Debentures | -
7%₹917 Cr88,900,000
↑ 88,900,000
Housing Development Finance Corporation Limited
Debentures | -
3%₹434 Cr42,000,000
↑ 42,000,000
National Bank For Agriculture and Rural Development
Debentures | -
3%₹416 Cr39,400,000
↑ 39,400,000
Indian Railway Finance Corporation Limited
Debentures | -
3%₹374 Cr36,500,000
↑ 36,500,000
LIC Housing Finance Limited
Debentures | -
2%₹342 Cr34,000,000
↑ 34,000,000
LIC Housing Finance Limited
Debentures | -
2%₹318 Cr31,000,000
↑ 31,000,000
Small Industries Development Bank of India
Debentures | -
2%₹302 Cr29,450,000
↑ 29,450,000
Housing Development Finance Corporation Limited
Debentures | -
2%₹289 Cr28,500,000
↑ 28,500,000
National Bank For Agriculture and Rural Development
Debentures | -
2%₹271 Cr26,400,000
↑ 26,400,000

Why Invest In Best Short Duration Debt Funds?

Given the short term nature of these investments, Short Duration (Short Term) Debt Funds do not offer very high returns like Equity Funds. However, there are certainly several reasons that ensure Investing in the best Short Duration (Short Term) Debt funds is totally worth to consider. Some of those include-

  • Short Duration (Short Term) debt funds are a highly suitable option for investors who are willing to make investments that have a slightly higher maturity than liquid & ultra short term debt funds but on the same hand are not very risky.

  • Being a short term investment, this fund is highly suitable for those who want to park their idle cash for 1-3 years to earn better returns than fixed income investment options like FDs.

  • As per the analysis, short term bond funds offer a better rate of return in accordance with the risk involved as compared to long term Bonds. Short Duration Funds are less sensitive to the rising Inflation than other intermediate and long term debt funds.

  • Lastly, the Short Duration (Short Term) debt funds are highly liquid, meaning that the investors can have an easy access to their cash. However, some schemes under this category do charge an exit load if the investment is redeemed in a very short duration (mostly 1 month to 6 months). So, it is always suggested to invest in best Short Duration Debt Funds wisely.

    How to Invest in Short Duration Debt Funds Online?

  1. Open Free Investment Account for Lifetime at Fincash.com.

  2. Complete your Registration and KYC Process

  3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

    Get Started

Conclusion

Investors can tweak their investment portfolios as per their risk profile. As the bond market offers the advantage of falling interest rates, one can earn better returns by increasing the duration o the investment. This is where Short Duration (Short Term) Debt Funds come in. These funds invest in debt market to offer long term returns over the duration of 2-3 years. So, invest in best Short Duration Funds today!

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