Investment Objective :
It is a fund that seeks to generate regular income by investing primarily in investment grade debt and money market instruments.
"Saving ka Bahubali"
The fund focuses on adding value through credit identification, while strict portfolio discipline and actively managed mark to market holdings help in moderating the return volatility. The fund also actively seeks to identify mispriced securities in the shorter tenor space (residual maturity of 12 months), primarily in corporate bonds / CPs. Portfolio invested in debt and money market securities across the credit spectrum.
Out of all the major Mutual Fund categories in the market, perhaps the one segment which has time and time again proven its worth is the Low Duration Mutual Funds. The best low duration funds have continued to grow at roughly 6 % YoY. Also known as short duration Mutual Funds, such schemes have continued to attract rising investment levels from retail and institutional investors.
Compared to Large-Cap and Mid-Cap funds, these funds are meant for those who do not have too much time to spare to be deliberate about their investments. Most individuals who invest in these vehicles are those looking to recoup their investment and profits within a 1-3 years’ time span.
One of the primary ways in which these funds differ from other offerings is their duration as is obvious. All those MFs which expire in 1-3 years are categorized as Low Duration Mutual Funds. Since there is an extra taxation mechanism on those investors who exit before 1 year is complete, the defaulters list is not a long one in these schemes.
There are several reasons why low duration bond funds are so popular. They are remarkably resilient even in a bullish market, offer high returns without the accompanying factor of extra risk, and have maintained their own identity despite the rise of ultra-short-term Mutual Funds.
There are several advantages that these funds have over the others. For instance, these funds are often pooled under a comparatively lower Capital Gains taxation slab because they have a very short duration and the tax exemption threshold is rarely reached.