Best Ultra Short-term Funds to Invest in 2022

Introduction to Ultra Short Term Funds

 

Investment funds are popular worldwide. With the intent of gaining benefits, investors often tend to seek beneficial funds that do not take long to mature. That said, mutual funds, as recommended by investment experts, are claimed to be secure, safe, and verified investment opportunities. 

 

However, one of the biggest setbacks of such investment funds is that their maturity terms are very long. Unlike these funds, liquid funds can provide liquid money immediately and perhaps are recommended to be very preferable in this aspect. Yet, a mid-road of these two types of investment funds is the ultra short mutual fund. 

 

For those who wish to invest their money in a short-term investment opportunity, ultra short-term investment funds are highly recommended. Another plus point that these funds offer is that investors get higher dividends as compared to a regular liquid fund. 

 

Simply put, ultra short-term funds can be defined as investment funds that offer high liquidity and higher dividends. In this blog, we will be discovering the top 10 ultra short term funds for investments. Let us get started.

 

(Also discover - Ultra short bond fund) 

 

 

Top 10 Ultra Short-term Funds for Investments

 

1. Aditya Birla Sun Life Ultra Short Term Fund

 

With a fund size of INR 17,499.89Cr, the best ultra short-term fund in this list is Aditya Birla Sun Life Ultra Short Term Fund. 

 

Characterized by its moderate risks and ultra short duration of maturity, this investment fund offers investors a series of maturity periods - 1yr, 3yr, and 5yr. 

 

With respective fund returns of 4%, 6.8%, and 6.9%, this ultra short term fund has got a 5 stars rating! Launched in 2013, the Aditya Birla Group has many golden holdings, including Reliance Industries Limited. 

 

Other holdings of this company include Tata Steel Limited, the Government of India, and LIC Housing Finance Limited. 

 

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2. ICICI Prudential Ultra Short Term Fund

 

An open-ended, ultra short term scheme, the ICICI Prudential Ultra Short term fund aims to produce short-term regular income for investors. 

 

With varying maturities, this ultra short term investment fund by ICICI was earlier known as ICICI Prudential Regular Income Fund. 

 

Launched in 2011, the scheme carries a moderate market risk level. When it comes to redemption, the minimum redemption amount is INR 500. 

 

“ICICI Prudential Balanced Advantage Fund is managed by ICICI Mutual Fund AMC, one of India’s largest Fund houses with a proven track record of delivering returns. “

ICICI Prudential Ultra Short Term Fund 

 

3. Kotak Savings Fund

 

Another top ultra short-term investment fund, Kotak Savings Fund was launched in the year 2004. Like many other ultra short term funds, Kotak Savings Fund was also launched with the purpose to create regular incomes for investors. 

 

When it comes to the moderate risks that this fund offers, the risks can be divided into 2 categories - interest rate and credit risk. 

 

Despite the hyped-up risks that one can be subjected to in this realm, Kotak Savings Fund, as suggested by SEBI, is placed in the category of Low to Moderate Risk level. The suggested investment horizon in this ultra short-term fund is 3-6 months. 

 

 

4. Axis Ultra Short term Fund

 

A short-term debt instrument, Axis Ultra Short Term is another topmost ultra short term investment fund that aims to generate regular income. Launched in 2018, this debt instrument currently has a fund size of INR 6,169.99Cr. 

 

Among its holdings, some are as follows - Reserve Bank of India, Chennai Petroleum Corporation Ltd., and National Bank for Agriculture and Rural Development. 

 

Among this debt instrument’s benefits, some are as follows - lowered risks, superior Axis ultra short term fund returns, higher yields, suitable for STP, and an efficient ultra short term fund for investing money. 

 

Other than these features, the Axis Ultra Short Term Fund is a part of the Axis Mutual Fund House. 

  

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5. SBI Magnum Ultra Short Duration Fund

 

Launched in 1999, the SBI Magnum Ultra Short Duration Fund has an annualized return of 1.67%. For this best short term fund as well, the suggested investment horizon is 3-6 months. 

 

With a purpose to generate regular incomes, with high liquidity and compromising debt and money market instruments. Ever since Jun 2021, this ultra short term fund is managed by R. Arun. 

 

With the experience of 12 years, he is very well-versed with such short-term debt funds. With a total AUM of INR 11,568.78Cr, the SBI Magnum is considered to be a top-notch ultra short duration fund.  

 

 

6. IDFC Ultra Short Term Fund

 

With an aim to invest in high-quality debt, the IDFC Ultra Short Term Fund is next in this line. For those looking to gain regular investment income with low risks, IDFC Ultra short term is a good pick. 

 

Managed by Harshal Joshi, this ultra short term fund has various reputed holdings like Reliance Jio Infocomm Ltd, Reserve Bank of India, and Kotak Mahindra Prime Ltd. 

 

With the current fund size of INR 4,728.62Cr, the IDFC ultra short term fund has a rating of 3 stars. 

 

In addition, this ultra short term fund has extremely secure protection against market losses that makes it one of the topmost ultra short term funds. 

 

 

7. Invesco India Ultra Short Term

 

Launched in 2013, the Invesco India Ultra Short term is managed by Hiten Jain. The fund aims to place investments in money markets and debt securities. 

 

By investing in bonds maturing to 3-6 months, the fund aims to generate higher returns as compared to other bank investments and short duration fixed deposit instruments. 

 

Even though the ultra short term funds are suspected of higher risks, the Invesco ultra short term fund provides low-risk levels. Currently, the fund’s AUM size is INR 1,018Cr.  

 

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8. Tata Ultra Short Term Fund

 

Another open-ended ultra short term fund, Tata Ultra Short Term Fund provides a suggestive investment horizon of 3-6 months. The risk level in this investment fund opportunities is moderate. 

 

The Tata Ultra Short Term Fund is managed by Akhil Mittal. The minimum investment amount in this ultra short term fund is INR 5000. Whereas, the minimum redemption amount is INR 500. 

 

The current AUM value of Tata Short Term Fund is INR 1,040Cr. Ever since its launch date, the ultra short term fund has delivered a total of 5.81% in terms of its annual average returns. 

 

 

9. Nippon India Ultra Short Duration Fund

 

Launched in 2013, Nippon India Ultra Short Duration Fund belongs to the Mutual Fund segment of Nippon India. With a current AUM of INR 3,443.28Cr, this ultra short term fund poses a moderate risk level to the debt instruments. 

 

With an annualized return of 5.5%, according to the data accumulated in the previous 6 months. When compared with other ultra short term funds, Nippon India Ultra short duration fund truly has a bright future. 

 

Presently, this ultra short term fund is managed by Vivek Sharma and Kinjal Desai. 

 

 

10. UTI Ultra Short Term Fund

 

With a current fund size of INR 1,933.37Cr, the UTI ultra short term fund is yet another short term debt instrument that one can go for. With a 3-stars rating, this ultra short term fund has an annualized investment return of 5.16%. 

 

An accrual-oriented income fund, this ultra short term fund has a very diversified debt profile. Among its many features, one of the biggest highlights of this ultra short term fund is its high liquidity. 

 

For investors who wish to park their money at a verified and high-yielding debt investment fund, this is a highly preferable option to go for.  

 

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In the end, ultra short term funds offer high liquidity and low-moderate risks that can be managed with reputed holdings. 

 

While one can discover many ultra short term funds out there, the above-mentioned list of the top 10 ultra short duration funds is a set of right picks that one must look forward to.