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What is Short Duration Mutual Fund?
The short term debt mutual funds are those funds which have primary investments in the money market instruments of high quality and lower risk. The short term debt funds are for the investment goals which are to be acquired by the investors in a short span of time. By providing higher returns in a very short period, the best short term debt mutual funds help in fulfilling the instant financial needs.
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These funds invest at least 80% of their assets in the top 100 companies by market capitalization. These funds invest at least 80% of their assets in the top 100 companies by market capitalization.Having Confusion in Selecting a Fund..?
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Short Duration
Short term debt mutual funds are the schemes which allow the clients to invest their money in a shielded manner and take the maximum output of their invested amount. A short term Debt funds are best suited for the investors who are new to mutual funds. When a child learns to ride, he doesn’t directly start with a geared bike. A toddler’s first vehicle is a tricycle, on which the child learns to paddle. If given a bike straight away, can you imagine the scene? It will generate humor for sure. But, on the serious side, it can be dangerous for the child and the risk of toppling over increases. Thus, all parents make it a point to ensure the safety of their child. So that you must take care and choose short term debt mutual funds accordingly.
In the same way, the novice investors can have the flavor of investing by parking their surplus for a very short span with short term debt funds and then eventually graduate to equity or any other scheme. Keeping the short term needs of the clients, mutual fund experts have come up with the option of short term debt funds. This particular category of mutual fund invests in the money market instruments with a maturity period of less than one year. The ultra short term debt funds were initially known as liquid plus funds owing to their early maturity period. The investment is usually made in the government or corporate treasury bills. The short term debt funds investment is secure and gives the client an excellent overview of dealing with mutual fund industry.
Let us understand the concept of short term debt funds in india with the help of the following example. Rakesh is having an extra amount of Rs. 50,000 due to the maturity of an RD. He would not be requiring the amount for the next 3-5 years, but is not willing to invest in the equity schemes owing to their risky profile. Also, the investment perspective will not provide the required returns to him if he invests in any plans other than short term debt funds. The maturity period of a short term debt funds may vary from 3 to 5 years, depending on the portfolio of a particular company’s debt funds asset allocation. Thus, the time duration coincides with the time constraint requirements of Rakesh. In addition, to the time, he would get a return on his debt mutual funds online investment which would amount to near about 10-12% annually which is far more than any bank can offer.
The short term debt funds are suitable for the investors who are looking for regular income and have an investment goal of a shorter tenure. Although all the short term debt funds in India are influential and helpful in gaining the financial objectives, one must analyse the schemes as per one’s requirement and opt for the best-suited one. There are some simple ways with which you can make the best choice of debt mutual funds.
This way, you can choose the best suitable short term debt funds to invest online in India. MySIPonline provides the convenience of investing online in short term debt mutual funds. You can avail our services anytime for no cost.
Short term mutual funds should be involved in the portfolio of every investor as they help in providing a safety feature. It means that similar to debt mutual funds, this category also allows the clients to invest in the money market instruments and ensure a fixed income for their investments. Short term debt mutual funds are also a beneficial scheme for the novice investors as it gives them the chance to observe the working of debt funds carefully without fearing the loss of their money. The clients based on their investment needs can alter the sum and time span of the scheme.
The points mentioned above make short term debt mutual funds charms the investors having a very short term investment perspective and at the same time it is suitable for the beginners in getting used to the investment strategies followed in the mutual fund industry. Thus, if you have an additional amount that you will not require for some time you can surely invest it in short term debt funds. Our site My SIP Online offers the best options available under debt funds category. The clients have to just determine the amount and leave the rest to us.
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