List Of Best Mutual Funds For Short Term For 6  Months

The below table shows a List Of The Best Mutual Funds For the Short Term For 6 Months based on AUM, NAV, and minimum SIP.

Short Term Mutual Funds Meaning

Short-term mutual funds are investment funds that primarily invest in assets with a short maturity period, typically less than three years. They aim to offer investors higher liquidity with lower risks compared to long-term investments, making them suitable for short-term financial goals.

These funds generally invest in government securities, corporate bonds, and money market instruments. The objective is to preserve capital while providing reasonable returns. Investors prefer these funds for parking surplus cash that might be needed in the near future.

Short-term mutual funds are ideal for investors who seek minimal risk exposure. They are less affected by interest rate fluctuations, which helps in maintaining a stable portfolio. The fund’s performance might offer lower returns compared to long-term funds, but they provide safety and quick access to money.

Best Mutual Fund For Short Term For 6 Months In India

The table below shows Best Mutual Fund For Short Term For 6 Months In India based on the lowest to highest expense ratio.

Mutual Fund For Short Term For 6 Months

The table below shows Mutual Fund For Short Term For 6 Months based on the Highest 3Y CAGR.

Best Mutual Fund For Short Term For 6 Months

The table below shows Best Mutual Fund For Short Term For 6 Months based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Mutual Funds For Short Term For 6 Months

The table below shows Mutual Funds For Short Term For 6 Months based on Absolute 1 Year Return and AMC.

Who Should Invest In  Best Mutual Funds For 6 Months in the Short Term?

Investors looking for a safe parking place for their funds for a duration of six months should consider the best short-term mutual funds. These funds are designed to provide stability and relatively quick returns, making them ideal for short-term financial commitments.

Individuals with an immediate financial goal in sight, such as a forthcoming large purchase or expense, can benefit from these funds. They offer a low-risk option for earning returns on cash that would otherwise remain idle.

Short-term mutual funds are also suitable for conservative investors who wish to avoid the volatility of the stock market. These funds provide a safer alternative to keep funds liquid while still capturing some returns on investment.

How To Invest in the  Mutual Funds For Short Term For 6 Months?

To invest in mutual funds for a short term of six months, start by identifying funds that specialize in short-duration investments. Consider factors like past performance, risk profile, and management fees. It’s advisable to consult a financial advisor to match your specific financial goals.

Next, ensure that you understand the investment strategy of the fund, which should align with your risk tolerance and return expectations. Review the fund’s holdings to confirm it invests primarily in high-quality, short-term instruments like treasury bills and commercial paper.

Finally, you can invest through an online brokerage account or directly through the mutual fund’s website. Set up an investment account, complete the necessary KYC (Know Your Customer) formalities, and make your investment. Regular monitoring and readiness to adjust your investments based on market conditions are advisable.

Performance Metrics Of Mutual Funds For Short Term For 6 Months

Performance metrics for short-term mutual funds over six months include yield, expense ratio, and volatility. Investors should also consider the fund’s Sharpe ratio, which measures risk-adjusted returns, to understand how efficiently the fund delivers returns relative to its risk.

Yield is a crucial metric for short-term funds, reflecting the interest earned by the fund’s assets. A higher yield can indicate better performance, but it’s essential to balance this with the risk involved. Investors should compare yields against similar funds and benchmarks.

The expense ratio impacts net returns, especially in short-term scenarios where high fees can significantly eat into profits. Volatility indicates how much the fund’s value fluctuates. A lower volatility is typically preferred in short-term investments, as it suggests more stability.

Benefits of Investing in Best Mutual Funds For Short Term For 6 Months

The main benefits of investing in the best mutual funds for a short term of six months include higher liquidity and lower risk. These funds offer quick access to money and a safer investment option compared to stocks, making them ideal for meeting near-term financial goals.

• Quick Cash Access: Short-term mutual funds provide the flexibility of quick withdrawals, making them perfect for investors who may need access to their funds on short notice. This feature is particularly useful for covering unexpected expenses or taking advantage of sudden investment opportunities without significant penalties.
• Lower Risk Exposure: By investing in instruments with shorter maturities, these funds generally maintain a lower risk profile compared to long-term investments. This makes them an ideal choice for conservative investors or those nearing a financial goal who wish to minimize the chance of loss.
• Steady Income Stream: Many short-term mutual funds aim to deliver consistent returns over periods as short as six months. They can serve as a reliable source of income through interest from bonds and dividends from other securities, which is especially appealing during volatile market conditions.
• Flexibility in Investment: These funds often allow investors to start with lower capital, making them accessible to a wider audience. They also offer various plans like systematic investment plans (SIPs) and systematic withdrawal plans (SWPs), providing flexibility in how investors choose to contribute or withdraw funds.
• Portfolio Diversification: Investing in short-term mutual funds can help diversify an investment portfolio, which might otherwise be heavily weighted in more volatile long-term assets. Diversification can reduce overall investment risk and smooth out returns over time, contributing to more stable financial planning.

Challenges Of Investing In Mutual Funds For Short Term For 6 Months

The main challenges of investing in mutual funds for a short term of six months include lower returns due to conservative investment strategies and the impact of fees, which can significantly eat into profits, especially given the short investment horizon.

• Limited Growth Potential: Short-term mutual funds typically focus on low-risk, low-return investments. This conservative strategy limits the potential for high returns, making these funds less suitable for investors seeking significant growth over a six-month period.
• Fee Impact: Even minor fees can have a disproportionate impact on net returns in short-term investments. Since the investment period is brief, fees, including management and transaction costs, can eat into the profits more significantly than in long-term investments.
• Interest Rate Sensitivity: Short-term funds are often sensitive to interest rate changes. If rates rise, the value of existing bonds in the fund’s portfolio can decrease, potentially leading to lower returns for investors, which is a critical risk to consider.
• Market Timing Challenges: Successfully investing in short-term funds often requires precise market timing, which can be difficult even for seasoned investors. Misjudging entry or exit points can lead to suboptimal returns and undermine the benefits of short-term investing.
• Liquidity Concerns: While generally liquid, some short-term mutual funds might have specific trading restrictions or high redemption fees during the initial holding period. These factors can limit accessibility to funds when they are needed most.

Introduction to List Of Best Mutual Funds For Short Term For 6  Months

ICICI Pru Short Term Fund

ICICI Prudential Short Term Fund Direct Plan-Growth is a Short Duration mutual fund scheme from Icici Prudential Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013.

The ICICI Pru Short Term Fund is categorized as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 20,427.68 crore. The fund boasts a 5-year Compound Annual Growth Rate (CAGR) of 7.93%. With an expense ratio of 0.45% and no exit load, it falls under the Moderate-risk category as per SEBI.

The actual asset composition includes: 63.56% in Corporate Debt, 27.78% in Government Securities, 5.33% in Secured Debt, and 3.00% in Cash & Equivalents, with a small 0.28% allocated to other assets.

Kotak Bond Short Term Fund

Kotak Bond Short Term Fund Direct-Growth is a Short Duration mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013.

The Kotak Bond Short Term Fund is classified as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 16,681.43 crore. It has a 5-year Compound Annual Growth Rate (CAGR) of 7.20%. The fund carries an expense ratio of 0.38% and has no exit load, placing it under the Moderate-risk category as per SEBI.

The actual asset composition includes: 59.78% in Corporate Debt, 34.97% in Government Securities, 3.36% in Secured Debt, and 1.61% in Cash & Equivalents, with a small 0.27% allocated to other assets.

HDFC Short Term Debt Fund

HDFC Short Term Debt Fund Direct Plan-Growth is a Short Duration mutual fund scheme from Hdfc Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013.

The HDFC Short Term Debt Fund is classified as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 14,207.90 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 7.45%. With an expense ratio of 0.40% and no exit load, it falls under the Moderate-risk category according to SEBI.

The actual asset composition includes: 70.74% in Corporate Debt, 21.41% in Government Securities, 4.57% in Cash & Equivalents, and 2.99% in Secured Debt, with a small 0.29% allocated to other assets.

SBI Short Term Debt Fund

SBI Short Term Debt Fund Direct-Growth is a Short Duration mutual fund scheme from Sbi Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013. 

The SBI Short Term Debt Fund falls under the Short Duration Fund category, with an Assets Under Management (AUM) of Rs. 13,958.73 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 6.92%. With an expense ratio of 0.40% and no exit load, it is classified in the Moderate-risk category according to SEBI.

The actual asset composition includes: 61.48% in Corporate Debt, 31.02% in Government Securities, 3.13% in Cash & Equivalents, and 2.77% in Secured Debt. Additionally, 1.34% is invested in Certificates of Deposit, with a small 0.28% in other assets.

Bandhan Bond Fund – Short Term Plan

Bandhan Bond Fund Short Term Plan Direct-Growth is a Short Duration mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013. 

The Bandhan Bond Fund – Short Term Plan is categorized as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 9,674.05 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 6.88%. With an expense ratio of 0.33% and no exit load, it is classified under the Moderate-risk category according to SEBI.

The actual asset composition includes: 41.09% in Government Securities, 31.17% in Certificates of Deposit, 25.74% in Corporate Debt, and 1.61% in Cash & Equivalents. Additionally, 0.28% is allocated to other assets, with a small 0.11% in additional holdings.

Axis Short Duration Fund

Axis Short Duration Fund Direct Fund-Growth is a Short Duration mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013.

The Axis Short Duration Fund is categorized as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 9,024.40 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 7.35%. With an expense ratio of 0.36% and no exit load, it is classified under the Moderate-risk category according to SEBI.

The actual asset composition includes: 65.05% in Corporate Debt, 21.27% in Government Securities, 5.34% in Cash & Equivalents, and 4.08% in Secured Debt. Additionally, 2.35% is invested in Certificates of Deposit, with a small 1.92% allocated to other assets.

Aditya Birla SL Short Term Fund

Aditya Birla Sun Life Short Term Direct Fund Direct-Growth is a Short Duration mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013.

The Aditya Birla SL Short Term Fund falls under the Short Duration Fund category, with an Assets Under Management (AUM) of Rs. 8,068.03 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 7.97%. With an expense ratio of 0.38% and no exit load, it is classified in the Moderate-risk category according to SEBI.

The actual asset composition includes: 67.72% in Corporate Debt, 24.31% in Government Securities, 2.80% in Cash & Equivalents, and 2.28% in Floating-rate Debt. Additionally, 2.00% is allocated to Secured Debt, with a small 0.89% invested in other assets.

Nippon India Short Term Fund

Nippon India Short Term Fund Direct-Growth is a Short Duration mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013. 

The Nippon India Short Term Fund is categorized as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 6,232.07 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 7.42%. It carries an expense ratio of 0.37% and has no exit load, placing it under the Moderate-risk category as per SEBI.

The actual asset composition includes: 57.27% in Corporate Debt, 32.38% in Government Securities, 5.37% in Cash & Equivalents, and 4.64% in Secured Debt. A small 0.33% is allocated to other assets.

HSBC Short Duration Fund

HSBC Short Duration Fund Direct-Growth is a Short Duration mutual fund scheme from Hsbc Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013. 

The HSBC Short Duration Fund is classified as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 3,683.03 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 6.57%. With an expense ratio of 0.27% and no exit load, it is categorized as Moderate-risk by SEBI.

The actual asset composition includes: 58.13% in Corporate Debt, 28.26% in Government Securities, 6.71% in Certificates of Deposit, 3.08% in Secured Debt, and 2.58% in Commercial Paper. Additionally, 1.23% is allocated to other assets.

DSP Short Term Fund

DSP Short Term Direct Plan-Growth is a Short Duration mutual fund scheme from Dsp Mutual Fund. This fund has been in existence for 12 years, having been launched on 01/01/2013.

The DSP Short Term Fund is classified as a Short Duration Fund, with an Assets Under Management (AUM) of Rs. 3,061.14 crore. The fund has a 5-year Compound Annual Growth Rate (CAGR) of 6.84%. With an expense ratio of 0.34% and no exit load, it is categorized under the Moderate-risk category according to SEBI.

The actual asset composition includes: 65.13% in Corporate Debt, 20.19% in Government Securities, 7.07% in Certificates of Deposit, 4.94% in Secured Debt, and 1.67% in Treasury Bills. Additionally, 1.01% is allocated to other assets.

Best Mutual Funds For Short Term For 6  Months – FAQ

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Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.