Low Duration Mutual Funds

Securities and Exchange Board of India (SEBI) recategorised mutual fund schemes in 2017. Three major categories were created- Equity funds, Debt funds, and Hybrid funds. The idea was to ease investor decision-making as many mutual fund companies had introduced many schemes. View More

The best low duration funds majorly invest in debt securities with a shorter time frame. In actual finance terms, duration is a complex concept. It is safe to assume that funds that invest in bonds with shorter maturity are low-duration funds. According to SEBI’s classification, low duration funds invest in securities that mature within 6-12 months.

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Low Duration Mutual Funds List

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Who Should Invest in Low Duration Funds?

Retail investors usually invest with a financial goal in mind that should be fulfilled at the maturity of the fund. For example, a father may begin setting aside money every month for his child’s higher education ten years from today. Investing with a goal in mind helps determine the investment horizon and the risk that the investor can take. Investors’ best low duration funds are funds with a shorter investment horizon and a lower risk preference.

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The risk of low duration funds is lower than high duration funds and higher than ultra-low duration funds. As the duration of a fund increases, the interest rate risk associated with it also increases. Interest rate risk is fluctuations in low duration funds return due to changes in market interest rate.

So, in essence, low duration funds are perfect for an investor who has short-term financial goals. For example, a salaried employee wants to save little by little for an abroad vacation next year. They can start a Systematic Investment Plan (SIP) today with that aim. They can invest in low duration fund as it fits his investment horizon of 12 months.

In addition to investment horizon and risk profile, investors for low duration funds can also be determined using individual factors like idle funds. For example, an individual has idle funds that need to be used elsewhere after seven months. They can invest it in low duration funds instead of a Fixed Deposit that gives a lower return.

Popular Low Duration Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 22,238
  • 3Y Return
  • 7.20%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 12,214
  • 3Y Return
  • 7.11%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 18,131
  • 3Y Return
  • 7.10%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 11,755
  • 3Y Return
  • 7.08%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 373
  • 3Y Return
  • 7.03%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 531
  • 3Y Return
  • 7.00%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 613
  • 3Y Return
  • 6.98%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 7,276
  • 3Y Return
  • 6.97%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 5,933
  • 3Y Return
  • 6.95%

  • Min SIP Investment Amt
  • ₹ ₹ 99
  • AUM (Cr.)
  • ₹ 1,200
  • 3Y Return
  • 6.92%

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