Post these elections, when investors are looking forward to maximizing their returns, the FD rates of most banks is dangling below of 8 percent. Most of the investors think they are left with no choice but one savior in this situation is short-term debt funds. on a general note, short-term debt funds manage to beat FD returns plus they are tax-efficient as well. The returns on FDs is charged as per applicable slab but with short-term debt funds, the indexation benefit is there post three years of staying invested.
If you have a decent risk appetite and have a plan to stay invested for at least a year, debt funds are the go-to investment avenue for you.
Here are some recommendations on short-term debt funds based on the Value Research ratings;
Franklin India Low Duration Fund
This fund scheme was launched on 26th of July, 2010 and has given returns as good as 9.64% since its launch. The Crisil short term bond is the benchmark for this fund. It is an open-ended fund from the house of Franklin Templeton Mutual Fund standing against funds like BOI AXA short term income fund, Baroda Pioneer short term fund, Indiabulls short term fund, PSU debt fund, and UTI Banking. The fund is managed by Santosh Kamath and Kunal Agarwal and holds an AUM of Rs. 6,632 crores as on June 30th, 2019.
Reliance Medium-term fund (Reliance Prime Debt Fund)
Launched on 5th of September, 2000, Reliance Medium-term fund is another big name in this segment. The fund benchmarks against Crisil short term bonds and has given returns of 7.71% since its launch. The fund is now called Reliance Prime Debt Fund and holds an AUM of Rs. 1,173 Crores as on June 30th, 2019. The fund is managed by Amit Tripathi and competes against funds like HDFC Short term fund, Escorts short term fund, BOI AXA short term fund and Birla Sun Life Short Term fund.
HDFC short term fund
The HDFC short term fund was launched on 28th of February, 2002 benchmarking against Crisil short term bond. It is an open-ended fund and has given returns of 8.13% since launch. The fund holds an AUM of Rs. 3.978 Crores and competes against fund like BOI AXA short term fund, Birla Sun life short term fund, Reliance Medium-term fund, and escorts short term debt fund.
Indiabulls short term fund regular plan
Launched on 13th of September, 2013, the Indiabulls short term fund regular plan has delivered returns of 9.10% since its launch. The fund benchmarks against Crisil short term bond. It is an open-ended fund and manages an AUM of Rs. 8,021 Crores. The competitors to this fund are UTI Banking, BOI AXA short term income fund plan, Franklin India low duration fund, Baroda Pioneer short term bond fund and PSU debt fund. The fund is managed by Mr. Malay Shah.
Birla sun life short term opportunities fund
The Birla Sun Life short term opportunities fund was launched on 3rd of March, 1997 benchmarking against Crisil Short term bond. The fund has given returns of 9.59% since its launch. The fund manages an AUM of Rs. 3.193 Crores and competes against HDFC short term fund, BOI AXA short term fund, Reliance medium-term fund, and Escorts short term debt fund. The fund is managed by Maneesh Dangi and Kaustubh Gupta.
Before you plan your investment in a fixed deposit, do consider investing in these short-term debt funds for greater returns.