Top Performing Liquid Funds in 5 Years

The below table shows a list Of the Top Performing Liquid Funds in 5 Years based on AUM, NAV, and minimum SIP.

Introduction to Top Performing Liquid Funds in 5 Years

Aditya Birla Sun Life Liquid Fund  

Aditya Birla Sun Life Liquid Fund is a Liquid mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.

Aditya Birla SL Liquid Fund is categorized under Liquid Fund with an AUM of ₹42,804.59 Crores, a 5-year CAGR of 5.35%, an exit load of 0.01% and an expense ratio of 0.21%. SEBI rates the risk as Moderate. The asset allocation includes 2.48% in Floating-rate Debt, 2.07% in Treasury Bills, 5.82% in Cash & Equivalents, 11.53% in Certificate of Deposit, 27.56% in Commercial Paper and 50.55% in Corporate Debt.

Nippon India Liquid Fund  

Nippon India Liquid Fund is a Liquid mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on January 1, 2013.

Nippon India Liquid Fund is categorized under Liquid Fund with an AUM of ₹32,733.81 Crores, a 5-year CAGR of 5.32%, an exit load of 0.01% and an expense ratio of 0.2%. SEBI rates the risk as Moderately Low. The asset allocation includes -1.12% in Government Securities, 0.22% in Treasury Bills, 3.20% in Certificate of Deposit, 16.72% in Commercial Paper and 48.49% in Corporate Debt.

LIC MF Liquid Fund  

LIC MF Liquid Fund is a Liquid mutual fund scheme from LIC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on January 1, 2013.

LIC MF Liquid Fund is categorized under Liquid Fund with an AUM of ₹10,588.63 Crores, a 5-year CAGR of 5.33%, an exit load of 0.01% and an expense ratio of 0.16%. SEBI rates the risk as Moderately Low. The asset allocation includes -0.70% in Corporate Debt, 0.23% in Treasury Bills, 22.16% in Certificate of Deposit, 24.17% in Commercial Paper and 53.90% in Cash & Equivalents.

Baroda BNP Paribas Liquid Fund  

Baroda BNP Paribas Liquid Fund is a Liquid mutual fund scheme from Baroda BNP Paribas Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on January 1, 2013.

Baroda BNP Paribas Liquid Fund is categorized under Liquid Fund with an AUM of ₹7,898.99 Crores, a 5-year CAGR of 5.32%, an exit load of 0.01% and an expense ratio of 0.17%. SEBI rates the risk as Moderately Low. The asset allocation includes 0.17% in Cash & Equivalents, 0.38% in Certificate of Deposit, 21.06% in Treasury Bills, 21.62% in Commercial Paper and 56.77% in Corporate Debt.

Edelweiss Liquid Fund  

Edelweiss Liquid Fund is a Liquid mutual fund scheme from Edelweiss Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on January 1, 2013.

Edelweiss Liquid Fund is categorized under Liquid Fund with an AUM of ₹5,428.32 Crores, a 5-year CAGR of 5.37%, an exit load of 0.01% and an expense ratio of 0.08%. SEBI rates the risk as Moderately Low. The asset allocation includes -3.30% in Cash & Equivalents, 0.24% in Treasury Bills, 21.22% in certificates of Deposit, 33.74% in Commercial Paper and 48.10% in Corporate Debt.

Union Liquid Fund  

Union Liquid Fund is a Liquid mutual fund scheme from Union Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on January 1, 2013.

Union Liquid Fund is categorized under Liquid Fund with an AUM of ₹4,309.48 Crores, a 5-year CAGR of 5.33%, an exit load of 0.01% and an expense ratio of 0.07%. SEBI rates the risk as Moderately Low. The asset allocation includes 0.13% in Cash & Equivalents, 7.55% in Treasury Bills, 17.82% in Certificate of Deposit, 33.99% in Commercial Paper and 40.51% in Corporate Debt.

Franklin India Liquid Fund  

Franklin India Liquid Fund is a Liquid mutual fund scheme from Franklin Templeton Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on January 1, 2013.

Franklin India Liquid Fund is categorized under Liquid Fund with an AUM of ₹3,082.93 Crores, a 5-year CAGR of 5.34%, an exit load of 0.01% and an expense ratio of 0.13%. SEBI rates the risk as Moderately Low. The asset allocation includes 3.92% in Cash & Equivalents, 6.14% in Corporate Debt, 14.08% in Treasury Bills, 21.81% in Certificate of Deposit and 24.44% in Commercial Paper.

Quantum Liquid Fund  

Quantum Liquid Fund is a Liquid mutual fund scheme from Quantum Mutual Fund. This fund has been in existence for 18 years and 5 months, having been launched on April 3, 2006.

Quantum Liquid Fund is categorized under Liquid Fund with an AUM of ₹2,600.85 Crores, a 5-year CAGR of 5.74%, an exit load of 0.01% and an expense ratio of 0.27%. SEBI rates the risk as Moderate. The asset allocation includes 0.27% in Treasury Bills, 9.97% in Certificate of Deposit, 13.99% in Cash & Equivalents, 18.88% in Commercial Paper and 56.89% in Corporate Debt.

Mahindra Manulife Liquid Fund  

Mahindra Manulife Liquid Fund is a Liquid mutual fund scheme from Mahindra Manulife Mutual Fund. This fund has been in existence for 8 years and 2 months, having been launched on July 4, 2016.

Mahindra Manulife Liquid Fund is categorized under Liquid Fund with an AUM of ₹1,516.2 Crores, a 5-year CAGR of 5.37%, an exit load of 0% and an expense ratio of 0.15%. SEBI rates the risk as Moderate. The asset allocation includes 2.69% in Government Securities, 3.53% in Corporate Debt, 6.21% in Treasury Bills, 16.55% in Certificate of Deposit and 49.69% in Commercial Paper.

PGIM India Liquid Fund  

PGIM India Liquid Fund is a Liquid mutual fund scheme from PGIM India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on January 1, 2013.

PGIM India Liquid Fund is categorized under Liquid Fund with an AUM of ₹431.71 Crores, a 5-year CAGR of 5.34%, an exit load of 0.01%, and an expense ratio of 0.13%. SEBI rates the risk as Moderately Low. The asset allocation includes 4.66% in Government Securities, 4.46% in Corporate Debt, 5.59% in Treasury Bills, 13.68% in Certificate of Deposit and 43.99% in Commercial Paper.

What Are Liquid Funds?

Liquid Funds are a category of debt mutual funds that invest in highly liquid money market instruments with a maturity of up to 91 days. These funds aim to provide investors with high liquidity, capital preservation and returns that are slightly higher than savings account interest rates.

Liquid Funds primarily invest in instruments such as treasury bills, commercial papers, certificates of deposit and other short-term debt securities. They are designed to maintain a high degree of safety and liquidity.

These funds are suitable for investors looking to park their surplus cash for very short periods, typically ranging from a few days to a few months. They offer a good alternative to savings accounts for managing short-term liquidity needs.

Features Of Top Performing Liquid Funds in 5 Years

The main features of top-performing Liquid Funds in 5 years include high liquidity, low risk, stable returns, and professional management. These funds offer a safe haven for short-term cash parking while aiming to provide returns slightly higher than savings accounts.

• High liquidity: Liquid Funds invest in securities with very short maturities, allowing investors to easily redeem their investments on short notice without any significant exit load.

• Low risk: Due to their investment in high-quality, short-term debt instruments, these funds carry minimal interest rate and credit risk, making them one of the safest investment options.

• Stable returns: While returns are generally modest, they tend to be stable and slightly higher than savings account interest rates, providing a predictable income stream.

• Professional management: Experienced fund managers handle the daily reinvestment of maturing securities, ensuring optimal returns within the fund’s investment mandate.

Best Performing Liquid Funds in 5 Years

The table below shows the Best Performing Liquid Funds in 5 Years based on the lowest to highest expense ratio.

Top Performing Liquid Funds in 5 Years In India

The table below shows Top Performing Liquid Funds in 5 Years In India Based on the Highest 3Y CAGR.

Top Performing Liquid Funds in 5 Years List

The table below shows the Top Performing Liquid Funds in the 5 Years List based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Factors To Consider When Investing In Top Performing Liquid Funds in 5 Years

The main factors to consider when investing in top-performing Liquid Funds in 5 years include fund size, expense ratio, portfolio quality, consistency of returns and your investment horizon. These factors can impact the fund’s performance and suitability for your financial goals.

• Fund size: Larger funds may have better negotiating power for short-term rates, potentially leading to slightly higher returns. However, very large funds might face challenges in deploying all assets efficiently.

• Expense ratio: Compare expense ratios across different liquid funds. Lower expenses can contribute to better overall returns, especially given the typically low returns of this category.
• Portfolio quality: Examine the fund’s portfolio composition, focusing on the credit quality of its holdings to ensure the fund maintains a low-risk profile.

• Consistency of returns: Look for funds that have consistently provided returns slightly above the prevailing short-term rates over the past five years.

• Investment horizon: Ensure that your investment timeframe aligns with the short-term nature of liquid funds. These are best suited for very short-term cash parking needs.

How To Invest In Top Performing Liquid Funds in 5 Years?

To invest in top-performing Liquid Funds in 5 years, start by researching and comparing different funds based on their performance, expense ratios and portfolio quality. Once you’ve selected a fund that aligns with your short-term liquidity needs, you can invest through Alice Blue.

Alice Blue is a user-friendly online investment platform that provides tools and resources to help you make informed investment decisions. You can choose to invest a lump sum amount or opt for a Systematic Investment Plan (SIP), although lump sum investments are more common for liquid funds.

Remember that Liquid Funds are designed for very short-term investments, typically ranging from a few days to a few months. They are best used for parking surplus cash or managing short-term liquidity needs rather than as long-term investment vehicles.

Advantages Of Investing In Top Performing Liquid Funds in 5 Years

The main advantages of investing in top-performing Liquid Funds in 5 years include high liquidity, low risk, potential for better returns than savings accounts and efficient cash management. These funds offer a safe and flexible option for short-term cash parking.

• High liquidity: Liquid Funds allow investors to redeem their investments on very short notice, usually within one business day, without any significant exit load.

• Low risk: These funds carry minimal interest rate and credit risk due to their investment in high-quality, short-term debt instruments, making them one of the safest investment options.

• Better returns than savings accounts: While returns are modest, they are generally slightly higher than savings account interest rates, providing a more efficient way to manage short-term cash.

• Efficient cash management: Liquid Funds offer a professional way to manage surplus cash, potentially optimizing returns on idle money for very short periods.

Risks Of Investing In Top Performing Liquid Funds in 5 Years

The main risks of investing in top-performing Liquid Funds in 5 years include interest rate risk, credit risk, reinvestment risk and the impact of expenses on returns. While generally very low-risk, these funds are not entirely risk-free.

• Interest rate risk: Although minimal due to short maturities, sudden changes in interest rates can still affect returns to some extent.

• Credit risk: While liquid funds invest in high-quality instruments, there’s still a minimal risk of default or credit rating downgrades.

• Reinvestment risk: As securities mature frequently, there’s a risk that proceeds may be reinvested at lower rates if short-term rates decline.

• Impact of expenses: Given the low returns of Liquid Funds, even small differences in expense ratios can significantly impact net returns to investors.

Importance of Liquid Funds

The main importance of Liquid Funds lies in their ability to provide high liquidity, capital preservation and efficient cash management. These funds play a crucial role in managing short-term surplus cash and meeting immediate liquidity needs for various investor profiles.

• Liquidity management: Liquid Funds offer an efficient way to manage short-term liquidity needs, providing easy access to funds while earning returns slightly higher than savings accounts.

• Capital preservation: For conservative investors or those looking to park funds temporarily, these funds offer one of the safest investment options in the mutual fund universe.

• Cash flow optimization: Businesses and individuals can use Liquid Funds to optimize returns on surplus cash that may be needed very shortly.

• Alternative to savings accounts: These funds provide a potential alternative to traditional savings accounts for managing short-term cash, potentially offering slightly better returns with similar liquidity.

How Long to Stay Invested in Liquid Funds?

Liquid Funds are designed for very short-term investments, typically ranging from a few days to a few months. They are best suited for parking surplus cash or managing immediate liquidity needs rather than as long-term investment vehicles. The ideal investment horizon is usually less than three months.

However, some investors may choose to keep a portion of their emergency fund in Liquid Funds for slightly better returns than savings accounts while maintaining high liquidity. In such cases, the investment period could be longer, but it’s important to remember that these funds are not meant for long-term wealth creation.

Tax Implications of Investing in Liquid Funds

Liquid Funds are taxed as debt mutual funds in India. For holding periods up to 3 years, gains are considered short-term capital gains and taxed at the investor’s income tax slab rate. For holding periods over 3 years, gains are treated as long-term capital gains.

Given the short-term nature of Liquid Funds, most investors will fall under the short-term capital gains tax category. It’s important to note that the taxation of debt funds is generally less favourable than equity funds for short-term investments, which should be considered when comparing returns with other investment options.

Future of Liquid Funds

The future of Liquid Funds in India looks stable, driven by the ongoing need for efficient short-term cash management solutions. As financial markets evolve and investors become more aware of various investment options, these funds are likely to remain an important tool for liquidity management.

However, their growth may be influenced by factors such as changes in short-term interest rates, regulatory developments, and innovations in cash management products. The increasing digitalization of financial services may also lead to more efficient and accessible Liquid Fund offerings in the future.

Top Performing Liquid Funds in 5 Years – FAQs   

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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.