The below table shows a list Of the Top Performing Short Duration Funds in 5 Years based on AUM, NAV and minimum SIP.
| Name | AUM (Cr) | NAV (Rs) | Minimum SIP (Rs) |
| ICICI Pru Short-Term Fund | 18228.37 | 60.92 | 5000 |
| Kotak Bond Short-Term Fund | 15045.22 | 53.3 | 100 |
| HDFC Short-Term Debt Fund | 13080.16 | 30.7 | 100 |
| Axis Short-Term Fund | 8413.57 | 31.22 | 100 |
| Aditya Birla SL Short Term Fund | 8019.38 | 47.74 | 100 |
| Nippon India Short-Term Fund | 6213.47 | 53.12 | 5000 |
| UTI Short Duration Fund | 2566.21 | 31.38 | 500 |
| Tata ST Bond Fund | 2209.36 | 49.3 | 150 |
| Sundaram Short Duration Fund | 187.41 | 44.45 | 100 |
| Bank of India Short-Term Income Fund | 75.59 | 26.67 | 100 |
Introduction to Top Performing Short Duration Funds in 5 Years
ICICI Pru Short-Term Fund
ICICI Prudential Short Term Fund is a Short Duration mutual fund scheme from ICICI Prudential Mutual Fund. This fund has existed for 11 years and 7 months, having been launched on January 1, 2013.
ICICI Pru Short Term Fund is categorized as a Short Duration Fund with AUM of ₹18,228.37 Crores, a 5-year CAGR of 7.69%, an exit load of 0% and an expense ratio of 0.45%. SEBI rates the risk as Moderate. The asset allocation includes 0.53% in Commercial Paper, 3.76% in Cash & Equivalents, 5.50% in Certificate of Deposit, 8.14% in Government Securities and 30.32% in Corporate Debt.
Kotak Bond Short-Term Fund
Kotak Bond Short Term Fund is a Short-duration mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
Kotak Bond Short Term Fund is categorized as a Short Duration Fund with AUM of ₹15,045.22 Crores, a 5-year CAGR of 6.96%, an exit load of 0% and an expense ratio of 0.37%. SEBI rates the risk as Moderate. The asset allocation includes 0.24% in Commercial Paper, 0.62% in Secured Debt, 1.44% in Cash & Equivalents, 3.60% in Government Securities and 43.14% in Corporate Debt.
HDFC Short-Term Debt Fund
HDFC Short Term Debt Fund is a Short Duration mutual fund scheme from HDFC Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
HDFC Short Term Debt Fund is categorized as a Short Duration Fund with AUM of ₹13,080.16 Crores, a 5-year CAGR of 7.20%, an exit load of 0% and an expense ratio of 0.40%. SEBI rates the risk as Moderate. The asset allocation includes 0.26% in Certificate of Deposit, 0.68% in Secured Debt, 0.80% in Cash & Equivalents, 3.62% in Government Securities and 27.67% in Corporate Debt.
Axis Short-Term Fund
Axis Short Term Fund is a Short Duration mutual fund scheme from Axis Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
Axis Short Term Fund is categorized as a Short Duration Fund with AUM of ₹8,413.57 Crores, a 5-year CAGR of 7.10%, an exit load of 0% and an expense ratio of 0.35%. SEBI rates the risk as Moderate. The asset allocation includes 2.29% in Floating-rate Debt, 2.19% in Cash & Equivalents, 2.71% in Certificate of Deposit, 5.82% in Government Securities and 31.84% in Corporate Debt.
Aditya Birla SL Short Term Fund
Aditya Birla Sun Life Short Term Fund is a Short Duration 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 Short Term Fund is categorized as a Short Duration Fund with AUM of ₹8,019.38 Crores, a 5-year CAGR of 7.38%, an exit load of 0% and an expense ratio of 0.38%. SEBI rates the risk as Moderate. The asset allocation includes 2.60% in Certificate of Deposit, 2.85% in Floating-rate Debt, 4.68% in Cash & Equivalents, 4.75% in Government Securities and 29.90% in Corporate Debt.
Nippon India Short-Term Fund
Nippon India Short Term Fund is a Short Duration mutual fund scheme from Nippon India Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
Nippon India Short Term Fund is categorized as a Short Duration Fund with AUM of ₹6,213.47 Crores, a 5-year CAGR of 7.15%, an exit load of 0% and an expense ratio of 0.37%. SEBI rates the risk as Moderate. The asset allocation includes 1.16% in Secured Debt, 1.10% in Certificate of Deposit, 5.00% in Cash & Equivalents, 7.80% in Government Securities and 32.83% in Corporate Debt.
UTI Ultra Short Duration Fund
UTI Ultra Short Duration Fund is an Ultra Short Duration mutual fund scheme from UTI Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
UTI Short Duration Fund is categorized as a Short Duration Fund with an AUM of ₹2,566.21 Crores, a 5-year CAGR of 8.09%, an exit load of 0% and an expense ratio of 0.38%. SEBI rates the risk as Moderate. The asset allocation includes 0.23% in Cash & Equivalents, 4.74% in Certificate of Deposit, 11.15% in Government Securities and 14.07% in Corporate Debt.
Tata ST Bond Fund
Tata Short Term Bond Fund is a Short Duration mutual fund scheme from Tata Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
Tata ST Bond Fund is categorized as a Short Duration Fund with AUM of ₹2,209.36 Crores, a 5-year CAGR of 6.76%, an exit load of 0%, and an expense ratio of 0.36%. SEBI rates the risk as Moderate. The asset allocation includes 0.24% in Certificate of Deposit, 0.24% in Cash & Equivalents, 2.00% in Government Securities, and 2.88% in Corporate Debt.
Sundaram Short Duration Fund
Sundaram Short Duration Fund is a Short Duration mutual fund scheme from Sundaram Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
Sundaram Short Duration Fund is categorized as a Short Duration Fund with AUM of ₹187.41 Crores, a 5-year CAGR of 6.68%, an exit load of 0% and an expense ratio of 0.29%. SEBI rates the risk as Moderate. The asset allocation includes 0.29% in Cash & Equivalents, 8.33% in Certificate of Deposit, 10.66% in Government Securities and 39.61% in Corporate Debt.
Bank of India Short-Term Income Fund
Bank of India Short Term Income Fund is a Short Duration mutual fund scheme from Bank of India Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on January 1, 2013.
Bank of India Short Term Income Fund is categorized as a Short Duration Fund with AUM of ₹75.59 Crores, a 5-year CAGR of 8.61%, an exit load of 0% and an expense ratio of 0.50%. SEBI rates the risk as Moderate. The asset allocation includes 2.57% in Certificate of Deposit, 6.71% in Commercial Paper, 10.98% in Cash & Equivalents, 14.84% in Government Securities and 22.87% in Corporate Debt.
What Are Short Duration Funds?
Short Duration Funds are debt mutual funds that invest in fixed-income securities with a Macaulay duration between 1 to 3 years. These funds aim to provide relatively stable returns while maintaining lower interest rate risk compared to longer-duration funds. They offer a balance between yield and stability for short to medium-term investors.
Short Duration Funds typically invest in a mix of government securities, corporate bonds, and money market instruments. This diversified portfolio helps manage credit risk while aiming for returns higher than traditional savings accounts or short-term deposits.
These funds can be suitable for investors with a short to medium-term investment horizon, typically 1 to 3 years. They offer the potential for better returns than savings accounts while providing more stability than longer-duration debt funds or equity funds.
Features Of Top Performing Short Duration Funds in 5 Years
The main features of top-performing Short Duration Funds in 5 years include moderate interest rate sensitivity, potential for higher returns than savings accounts, diversified portfolio and professional management. These funds aim to balance yield and stability for short to medium-term investors.
- Moderate duration: Short Duration Funds maintain a Macaulay duration between 1 to 3 years, offering lower interest rate sensitivity compared to longer-duration funds, potentially providing more stable returns.
- Diversified portfolio: These funds invest in a mix of government securities, corporate bonds, and money market instruments. This diversification helps spread credit risk and potentially enhance returns.
- Professional management: Short Duration Funds are managed by experienced fund managers who analyze credit quality, interest rate trends and market conditions to optimize the portfolio.
- Liquidity: These funds generally offer good liquidity, allowing investors to redeem their units on any business day and providing flexibility to manage investments according to needs.
Best Performing Short Duration Funds in 5 Years
The table below shows the Best Performing Short Duration Funds in 5 Years based on the lowest to highest expense ratio.
| Name | Expense Ratio (%) | Minimum SIP (Rs) |
| Sundaram Short Duration Fund | 0.29 | 100 |
| Axis Short-Term Fund | 0.35 | 100 |
| Tata ST Bond Fund | 0.36 | 150 |
| Kotak Bond Short-Term Fund | 0.37 | 100 |
| Nippon India Short-Term Fund | 0.37 | 5000 |
| Aditya Birla SL Short Term Fund | 0.38 | 100 |
| UTI Short Duration Fund | 0.38 | 500 |
| HDFC Short-Term Debt Fund | 0.4 | 100 |
| ICICI Pru Short-Term Fund | 0.45 | 5000 |
| Bank of India Short-Term Income Fund | 0.5 | 100 |
Top Performing Short Duration Funds in 5 Years In India
The table below shows the Top Performing Short Duration Funds in 5 Years In India Based on the Highest 3Y CAGR.
| Name | CAGR 3Y (Cr) | Minimum SIP (Rs) |
| Bank of India Short-Term Income Fund | 12.82 | 100 |
| UTI Short Duration Fund | 7.85 | 500 |
| ICICI Pru Short-Term Fund | 6.91 | 5000 |
| Aditya Birla SL Short Term Fund | 6.5 | 100 |
| Axis Short-Term Fund | 6.25 | 100 |
| HDFC Short-Term Debt Fund | 6.2 | 100 |
| Nippon India Short-Term Fund | 6.19 | 5000 |
| Sundaram Short Duration Fund | 6.09 | 100 |
| Kotak Bond Short-Term Fund | 6.08 | 100 |
| Tata ST Bond Fund | 5.95 | 150 |
Top Performing Short Duration Funds in 5 Years List
The table below shows the Top Performing Short Duration Funds in 5 Years List based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.
| Name | AMC | Exit Load (%) |
| Bank of India Short-Term Income Fund | Bank of India Investment Managers Private Limited | 0 |
| UTI Short Duration Fund | UTI Asset Management Company Private Limited | 0 |
| ICICI Pru Short-Term Fund | ICICI Prudential Asset Management Company Limited | 0 |
| Aditya Birla SL Short Term Fund | Aditya Birla Sun Life AMC Limited | 0 |
| Axis Short-Term Fund | Axis Asset Management Company Ltd. | 0 |
| HDFC Short-Term Debt Fund | HDFC Asset Management Company Limited | 0 |
| Nippon India Short-Term Fund | Nippon Life India Asset Management Limited | 0 |
| Sundaram Short Duration Fund | Sundaram Asset Management Company Limited | 0 |
| Kotak Bond Short-Term Fund | Kotak Mahindra Asset Management Company Limited | 0 |
| Tata ST Bond Fund | Tata Asset Management Private Limited | 0 |
Factors To Consider When Investing In Top Performing Short Duration Funds in 5 Years
The main factors to consider when investing in top-performing Short Duration Funds in 5 years include credit quality, yield to maturity, expense ratio, fund manager’s expertise and your investment horizon. These factors can significantly impact the fund’s performance and suitability for your portfolio.
- Credit quality: Assess the fund’s portfolio composition and the credit ratings of its holdings. Higher credit quality generally implies lower risk but may offer slightly lower yields.
- Yield to maturity (YTM): Compare the YTM of different funds. A higher YTM indicates potential for better returns, but also consider the associated risks and the fund’s expense ratio.
- Expense ratio: Look for funds with lower expense ratios, as these costs directly impact your returns. However, also consider the fund’s performance and strategy alongside costs.
- Fund manager’s expertise: Evaluate the fund manager’s experience and track record in managing short-duration funds. Their ability to navigate credit and interest rate risks is crucial.
- Your investment horizon: Ensure your investment timeframe aligns with the fund’s duration. Short Duration Funds are typically suitable for 1-3 year investment horizons.
How To Invest In Top Performing Short Duration Funds in 5 Years?
To invest in top-performing Short Duration Funds in 5 years, start by researching and comparing different funds based on their performance, credit quality and expense ratios. Once you’ve selected a fund that aligns with your financial goals and risk tolerance, 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), which allows you to invest a fixed amount regularly.
For most investors, a SIP is recommended as it helps in rupee cost averaging and reduces the impact of market volatility on your investment over time. Remember to review and rebalance your investment periodically to ensure it remains aligned with your financial goals.
Advantages Of Investing In Top Performing Short Duration Funds in 5 Years
The main advantages of investing in top-performing Short Duration Funds in 5 years include the potential for higher returns than savings accounts, moderate interest rate sensitivity, portfolio diversification and professional management. These funds offer a balance between yield and stability.
- Higher return potential: Short Duration Funds aim to provide better returns than savings accounts or liquid funds while maintaining relatively lower risk compared to longer-duration funds.
- Moderate interest rate sensitivity: With a Macaulay duration of 1-3 years, these funds have lower sensitivity to interest rate changes compared to longer-duration funds, potentially offering more stable returns.
- Portfolio diversification: Short Duration Funds invest in a mix of government securities, corporate bonds, and money market instruments, helping to spread credit risk and potentially enhance returns.
- Professional management: These funds are managed by experienced professionals who analyze market conditions and credit risks to optimize the portfolio, potentially leading to better risk-adjusted returns.
Risks Of Investing In Top Performing Short Duration Funds in 5 Years
The main risks of investing in top-performing Short Duration Funds in 5 years include interest rate risk, credit risk, liquidity risk and reinvestment risk. While these funds generally have moderate risk profiles, investors should be aware of potential factors that can impact returns.
- Interest rate risk: Although lower than longer-duration funds, Short Duration Funds are still affected by interest rate changes. Rising rates can lead to a temporary decline in fund value.
- Credit risk: The fund’s investments in corporate bonds carry the risk of default or credit rating downgrades, which can impact returns. Careful credit analysis by fund managers is crucial.
- Liquidity risk: In times of market stress, some bonds in the portfolio might face reduced liquidity, potentially affecting the fund’s ability to meet large redemption requests.
- Reinvestment risk: As securities in the portfolio mature, there’s a risk that proceeds may be reinvested at lower rates if interest rates have fallen, impacting overall returns.
Importance of Short-Duration Funds
The main importance of Short Duration Funds lies in their ability to offer a balance between potential returns and stability, serve as a short to medium-term investment tool, provide portfolio diversification and offer tax-efficient returns. These funds play a crucial role in many investors’ portfolios.
- Balancing returns and stability: Short Duration Funds aim to provide better returns than savings accounts while maintaining lower volatility compared to longer-duration funds. This makes them suitable for short to medium-term financial goals.
- Short to medium-term investment tool: These funds can be effective tools for managing surplus cash for periods of 1-3 years, offering potentially higher returns than traditional savings accounts while maintaining good liquidity.
- Portfolio diversification: Including Short Duration Funds in an investment portfolio can help balance overall risk, especially when combined with equity investments or longer-duration debt funds.
- Tax efficiency: For holding periods over 3 years, gains from Short Duration Funds are treated as long-term capital gains and taxed at 20% with indexation benefits, potentially offering tax advantages over fixed deposits.
How Long Can You Stay Invested in Short-Duration Funds?
The ideal investment horizon for Short Duration Funds typically ranges from 1 to 3 years. This timeframe aligns with the Macaulay duration of these funds and allows investors to potentially benefit from the fund’s strategy while managing interest rate risk effectively.
However, the exact duration can vary based on individual financial goals and market conditions. Some investors use these funds for slightly longer periods as part of their debt portfolio strategy. Regular review of your investment is important to ensure it aligns with your financial objectives.
Tax Implications of Investing in Short-Duration Funds
Short Duration 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.
Long-term capital gains from Short Duration Funds are taxed at 20% with indexation benefits. Indexation adjusts the purchase price for inflation, potentially reducing the tax liability. This tax treatment can make Short Duration Funds more tax-efficient for periods over 3 years compared to fixed deposits.
Future of Short-Duration Funds
The future of Short Duration Funds in India looks promising, driven by factors such as increasing financialization of savings, growing awareness about debt mutual funds and the need for efficient short to medium-term investment options. As investors seek alternatives to traditional savings products, these funds are likely to gain more traction.
However, their performance will continue to be influenced by interest rate movements and credit market conditions. Innovations in fund management strategies and the introduction of new fixed-income products could further enhance the appeal of Short Duration Funds in the coming years.
Top Performing Short Duration Funds in 5 Years – FAQs
Short Duration Funds are debt mutual funds that invest in securities with a duration of one to three years. They aim to provide stable returns by balancing interest rate risk and credit risk, making them ideal for conservative investors seeking moderate returns with lower volatility.
Top Performing Short Duration Funds in 5 Years #1: ICICI Pru Short-Term Fund
Top Performing Short Duration Funds in 5 Years #2: Kotak Bond Short-Term Fund
Top Performing Short Duration Funds in 5 Years #3: HDFC Short-Term Debt Fund
Top Performing Short Duration Funds in 5 Years #4: Axis Short-Term Fund
Top Performing Short Duration Funds in 5 Years #5: Aditya Birla SL Short-Term Fund
These funds are listed based on the Highest AUM.
The best-performing short-duration funds based on expense ratio in the last 5 years are Sundaram Short Duration Fund, Axis Short Term Fund, Tata ST Bond Fund, Kotak Bond Short Term Fund and Nippon India Short Term Fund. These funds offer competitive returns with lower expense ratios, making them efficient options for investors.
The top performing short-duration funds based on 3-year CAGR are the Bank of India Short Term Income Fund, UTI Short Duration Fund, ICICI Pru Short Term Fund, Aditya Birla SL Short Term Fund and Axis Short Term Fund. These funds have consistently delivered strong returns, making them solid investment choices.
Investing in top-performing Short Duration Funds can be good for short to medium-term goals (1-3 years). They offer the potential for better returns than savings accounts with moderate risk. However, consider your investment horizon, risk tolerance and overall financial plan before investing.
Yes, you can buy top-performing Short Duration Funds through various online platforms like Alice Blue or directly from fund houses. These funds are open-ended, allowing purchases on any business day. Remember, they’re best suited for short to medium-term investments, typically 1-3 years.
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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.
