Top Performing Low Duration Funds in 1 Year

The below table shows a list Of the Best Low Duration Funds Based on AUM, NAV, and minimum SIP.

Introduction to Top Performing Low Duration Funds in 1 Year

ICICI Pru Savings Fund

ICICI Prudential Savings Fund Direct Plan-Growth is a Low Duration mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

ICICI Prudential Savings Fund as a low-duration fund, manages assets valued at ₹19,698.37 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.59%. This fund has no exit load and an expense ratio of 0.42%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 94.33%, and Other- 5.67%.

HDFC Low Duration Fund

HDFC Low Duration Fund Direct Plan-Growth is a Low Duration mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

HDFC Low Duration Fund as a low duration fund, manages assets valued at ₹18,525.40 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.67%. This fund has no exit load and an expense ratio of 0.45%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 98.09%, and Other- 1.91%.

SBI Magnum Low Duration Fund

SBI Magnum Low Duration Fund Direct Plan-Growth is a Low Duration mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

SBI Magnum Low Duration Fund as a low duration fund, manages assets valued at ₹11,828.20 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.16%. This fund has no exit load and an expense ratio of 0.43%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 95.93%, and Other- 4.07%.

Aditya Birla SL Low Duration Fund

Aditya Birla Sun Life Low Duration Fund Direct-Growth is a Low Duration mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Aditya Birla Sun Life Low Duration Fund as a low duration fund, manages assets valued at ₹10,861.44 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.7%. This fund has no exit load and an expense ratio of 0.41%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 96.33%, and Other- 3.67%.

Kotak Low Duration Fund

Kotak Low Duration Fund Direct-Growth is a Low Duration mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Kotak Low Duration Fund as a low duration fund, manages assets valued at ₹9,670.30 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.68%. This fund has no exit load and an expense ratio of 0.42%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 97.47%, and Other- 2.53%.

Nippon India Low Duration Fund

Nippon India Low Duration Fund Direct-Growth is a Low Duration mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Nippon India Low Duration Fund as a low duration fund, manages assets valued at ₹6,227.95 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.61%. This fund has no exit load and an expense ratio of 0.37%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 94.04%, and Other- 5.95%.

Bandhan Low Duration Fund

Bandhan Low Duration Fund Direct-Growth is a Low Duration mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Bandhan Low Duration Fund as a low duration fund, manages assets valued at ₹5,868.00 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 5.95%. This fund has no exit load and an expense ratio of 0.33%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 96.45%, and Other- 3.55%.

Axis Treasury Advantage Fund

Axis Treasury Advantage Fund Direct-Growth is a Low Duration mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 14 years and 11 months, having been launched on 09/10/2009.

Axis Treasury Advantage Fund as a low duration fund, manages assets valued at ₹4,961.63 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.32%. This fund has no exit load and an expense ratio of 0.32%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 101.52%, and Other- (-1.52)%.

DSP Low Duration Fund

DSP Low Duration Fund Direct-Growth is a Low Duration mutual fund scheme from DSP Mutual Fund. This fund has been in existence for 9 years and 6 months, having been launched on 27/02/2015.

DSP Low Duration Fund as a low duration fund, manages assets valued at ₹4,855.18 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.01%. This fund has no exit load and an expense ratio of 0.3%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 96.91%, and Other- 3.09%.

UTI Low Duration Fund

UTI Low Duration Fund Direct-Growth is a Low Duration mutual fund scheme from UTI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013

UTI Low Duration Fund as a low duration fund, manages assets valued at ₹2,794.82 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.18%. This fund has no exit load and an expense ratio of 0.37%. According to SEBI, it falls under the moderate-risk category. The fund’s asset allocation comprises: No Equity, Debt- 94.93%, and Other- 5.07%.

What Are Low Duration Funds?

Low duration funds are a type of debt mutual fund that invests in financial instruments with a short-term maturity, typically between 6 to 12 months. These funds aim to provide stable returns with lower interest rate risk compared to longer-duration funds.

They are suitable for conservative investors seeking relatively safe investment options with moderate returns. The primary focus of low duration funds is to minimize price fluctuations due to interest rate changes, making them a good choice for short-term financial goals.

These funds invest in government securities, corporate bonds, and money market instruments. While they offer lower risk, returns can vary based on interest rate movements and the credit quality of underlying assets.

Features Of Top Performing Low Duration Funds in 1 Year

The main features of top-performing low duration funds in the past year include consistent returns, high credit quality of investments, effective interest rate management, and liquidity. These funds strike a balance between risk and return, suitable for short-term investment goals.

• Consistent Returns: Top-performing low duration funds have delivered stable returns over the past year, offering better performance compared to traditional savings options while keeping volatility low, making them attractive to conservative investors.

• High Credit Quality: These funds primarily invest in instruments with high credit ratings, ensuring lower default risk. The credit quality of the portfolio plays a crucial role in safeguarding capital and generating steady returns.

• Effective Interest Rate Management: By maintaining short maturity durations, these funds effectively manage interest rate risk, ensuring minimal impact from rate fluctuations. This makes them more resilient during periods of rising interest rates.

• Liquidity: Low duration funds offer higher liquidity compared to long-term debt funds, making it easy for investors to redeem units without facing significant price changes. This is especially beneficial for short-term investors seeking quick access to their funds.

Best Performing Low Duration Funds in 1 Year

The table below shows the Best-performing Low Duration Funds Based on the highest to lowest expense ratio.

Top Performing Low Duration Funds in 1 Year In India

The table below shows the Best Low Duration Funds Based on the Highest 3Y CAGR.

Top Performing Low Duration Funds in 1 Year List 

The table below shows Best Performing Low Duration Funds In India 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 Low Duration Funds in 1 Year

The main factors to consider when investing in top-performing low duration funds over one year include interest rate sensitivity, credit quality, fund manager’s strategy, and historical performance.

• Interest Rate Sensitivity: Low duration funds are less sensitive to interest rate changes, which helps protect against price fluctuations. Evaluate how well the fund manages interest rate risk to ensure stable returns.

• Credit Quality: Examine the credit ratings of the fund’s holdings. High-quality assets generally mean lower default risk and more stable returns, which is crucial for low duration funds focused on capital preservation.

• Fund Manager’s Strategy: Assess the fund manager’s approach and experience. A skilled manager will effectively navigate short-term market fluctuations and interest rate changes, optimizing returns while maintaining low duration.

• Historical Performance: Review the fund’s past performance to understand its stability and return consistency. While past performance doesn’t guarantee future results, it provides insight into how the fund has performed in various market conditions.

How To Invest In Top Performing Low Duration Funds in 1 Year?

To invest in top-performing low duration funds, you first need to research funds with stable returns, high credit quality, and low interest rate risk. Focus on past performance, expense ratio, and portfolio composition before selecting a fund for short-term financial goals.

You can invest in low duration funds through brokerage platforms like Alice Blue. Alice Blue offers a seamless investment experience, allowing you to compare fund performances, track returns, and execute trades easily. Their platform ensures efficient management of your mutual fund investments.

Before investing, create an account with Alice Blue, complete the KYC process, and link your bank account. Once registered, you can invest directly through their portal or app, making it convenient to manage and monitor your investments.

Advantages Of Investing In Top Performing Low Duration Funds in 1 Year

The main advantages of investing in top-performing low duration funds over one year include reduced interest rate risk, capital preservation, stable returns, and greater liquidity compared to longer-duration investments.

• Reduced Interest Rate Risk: Low duration funds are less impacted by interest rate fluctuations, which helps minimize the risk of price declines when rates rise. This stability is beneficial in volatile interest rate environments.

• Capital Preservation: These funds focus on shorter-term securities, which typically have lower price volatility. This emphasis on preserving capital makes them a safer investment compared to funds with longer durations.

• Stable Returns: With their lower sensitivity to interest rate changes, low duration funds tend to offer more consistent returns. This stability can be appealing to investors seeking reliable income without significant fluctuations.

• Greater Liquidity: Low duration funds generally invest in short-term securities, which are easier to buy and sell. This liquidity provides investors with more flexibility and quicker access to their funds when needed.

Risks Of Investing In Top Performing Low Duration Funds in 1 Year

The main risks of investing in top-performing low duration funds over one year include credit risk, reinvestment risk, lower yield potential, and limited diversification.

• Credit Risk: Even though low duration funds are less sensitive to interest rates, they can still be affected by defaults or downgrades in the credit quality of their holdings, impacting returns.

• Reinvestment Risk: With shorter durations, the fund may face reinvestment risk as maturing securities need to be reinvested at potentially lower interest rates, which can reduce overall income.

• Lower Yield Potential: To maintain low duration, these funds often invest in short-term securities that typically offer lower yields compared to longer-term investments, potentially resulting in reduced income opportunities.

• Limited Diversification: Low duration funds may focus on a narrower range of securities, which can limit diversification. This lack of diversification can increase vulnerability to specific credit or sector-related risks.

Importance of Low Duration Funds

Low duration funds are crucial for investors seeking short-term investments with minimal risk. These funds invest in debt securities with short maturities, typically ranging from six months to three years, offering stability and protection against interest rate fluctuations.

These funds provide better liquidity and lower volatility than longer-duration funds, making them ideal for conservative investors or those looking to park their money temporarily. They also offer relatively higher returns compared to traditional savings accounts, making them a suitable option for balancing risk and return in short-term portfolios.

How Long to Stay Invested in Low Duration Mutual Funds?

Investors should typically stay invested in low duration mutual funds for a period of six months to three years. These funds are designed for short-term goals, offering stability and modest returns with lower risk compared to long-term investment options.

Holding these funds for this duration helps optimize returns while minimizing interest rate risk. However, the investment horizon can be adjusted based on market conditions, personal financial goals, or liquidity needs, allowing flexibility for investors seeking both safety and reasonable returns over a short period.

Tax Implications of Investing in Low Duration Funds

The tax implications for low duration funds depend on the holding period. If held for less than three years, gains are taxed as short-term capital gains (STCG) at the investor’s applicable income tax rate, increasing the overall tax burden.

For investments held beyond three years, gains are classified as long-term capital gains (LTCG) and taxed at 20% with the benefit of indexation. Indexation adjusts the purchase price for inflation, effectively reducing the taxable amount, and making long-term investments in low duration funds more tax-efficient.

Future of Low Duration Funds

The future of low duration funds looks promising as they continue to attract investors seeking low-risk, short-term investment options. With interest rate volatility, these funds provide stability and liquidity, making them appealing for conservative investors during uncertain market conditions.

As market dynamics evolve, low duration funds will likely adapt to changing interest rates, offering competitive returns relative to traditional savings accounts. Their flexibility and balance of risk and return ensure they remain a popular choice for investors looking to manage short-term financial goals effectively.

Top Performing Low Duration Funds in 1 Year FAQs  

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.