This Short Term Debt Mutual Fund SIP, Best Rated By Morningstar: Check Portfolio

The Short Term Debt Mutual Funds are chosen by investors who have a lesser risk appetite and are interested in secured income in a short duration.

Short Term Debt Mutual Fund SIP investment rationale

The short-term debt mutual fund SIPs will have an average maturity period of around 1 to 3 years; hence these are lesser exposed to risk due to interest rate changes. So, these are better suited for investors who are shy to risks and want to generate wealth in the near term.

However, the debt funds generally offer lesser returns, because the fund houses will invest in assured investment tools like government securities, debentures, corporate bonds, etc. Along with these, some other money markets investment tools are also explored in this type of investment. These funds will also help you in tax reduction.

HDFC Short Term Debt Fund - Growth

HDFC Short Term Debt Fund is a popular mutual fund SIP investment with a NAV of Rs. 25.60, the fund size (AUM) is quite high at Rs. 17368.11 crore. The Expense Ratio (ER) on the other hand is 0.74%; which is lower than the category average at 1%. ER is considered as the percentage, the investment fund house will use the retail investors' money for its management expenses. The fund size is the total market value of the mutual fund's investments.

This mutual fund SIP by HDFC has been best rated with 5 Star by reputed rating agency Morningstar. Its high fund size will assure you about the investment's high liquidity.

Absolute and annualized returns

HDFC Short Term Debt Fund's SIP's absolute returns are certainly attractive in the long term. In the last 1-year SIP return stood at 2.23%, in the last 2 years it has fetched 5.54% returns, in the last 3 years it has given 10.43% returns, and in the last 5 years, it has fetched 20.27% returns. Annualized returns of this fund's SIP were 7.3% in the past 5 years, and 6.53% in the past 3 years.

HDFC Short Term Debt Fund's absolute mutual fund returns are highest in 5 years terms. In the last 1 year return stood at 4.80%, in the last 2 years it has fetched 13.60% returns, in the last 3 years it has given 25.71% returns, and in the last 5 years, it has given 43.32% returns. In addition to that, in the past 5 years, the HDFC Short Term Debt Fund's annualized returns stood at 7.46%, beating the category average at 5.95%.

Portfolio

HDFC Short Term Debt Fund's total debt holding is 84.66%, and the rest of the 15.34% is invested in other sectors. This fund has total of 173 debt portfolio holdings. The GOI holdings are19.69%, CD holdings are 2.27%, CP holdings are 1.97%, NCD & Bonds holdings are 59.77%, and PTC holdings are 0.96%. Along with these, this fund holds 13.03% position in TREPS, and 2.31% position in Net Receivables.

Other funds under this category are IDFC Bond Fund - Short Term - Regular Plan - Growth, Kotak Bond Short Term Plan - Growth, IDBI Short Term Bond Fund - Growth, Nippon India Short Term Fund - Growth, etc.

(Also read: This Large & Mid-Cap Mutual Fund SIP Is 4 Star Rated By Morningstar, Suited For Good Returns)

Disclaimer

Investing in equities/mutual funds/SIPs/debts poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, and the author are not liable for any losses caused as a result of decisions based on the article. (Data mentioned as on February 21, 2022)