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This Low Duration Fund Is Better Than FD, Given Upto 22.07% Returns In 3 Years

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There was a time when all surplus cash - bonuses and raises - was invested in bank FDs. At some point in their lives, our grandparents and parents have all deposited their money in FDs. It was the finest way to make an income while keeping your money safe.

 

Mutual funds have risen to prominence in recent years. As a result, FDs are no longer the most popular long-term investment option. In terms of risk, debt funds are the most similar to traditional FDs.

The basic purpose of a debt fund is to provide consistent income to investors throughout the investment horizon. One such debt fund is a low duration fund, these funds offer good returns. Here, we highlighted one such fund that has given good returns in 3 years. Read to know more!

HDFC Low Duration Fund - Direct Plan-Growth

HDFC Low Duration Fund - Direct Plan-Growth

This Low Duration Debt Mutual Fund is from the house of HDFC Mutual fund. It was launched in January 2013. The fund is open-ended and medium size in its category. 

The fund size of the Assets Under Management (AUM) is Rs 18437.88 Crores. As of 17 March 2022, it has a NAV of Rs 49.6612. The expense ratio of the fund is 0.39%, which is almost close to its category average expense ratio. It is a low-risk fund to invest in, which makes it a good alternative to FDs.

Rating agency CRISIL has given this fund one Star. However, despite good ratings and NAV, it has a relatively weak performance among its peers. Investors, who are looking to park their money for 1.3 years can opt to invest in this fund with one time or through SIP investment. The minimum investment through SIP is required Rs 500.

Absolute and Annualised Returns
 

Absolute and Annualised Returns

On Lump-Sum Investment

It has given good returns on 2, 3 and 5 years investment period. The returns are better than FDs. Since its launch, it has delivered 7.90% average annual returns. While 101.44% absolute returns The since its launch.

Investment TenureAbsolute ReturnsAnnualised Returns
1 Year4.80%4.80%
2 Year13.26%6.42%
3 Year22.07%6.85%
5 Year40.78%7.08%
Since Inception101.44%7.90%


SIP Returns

SIP TenureAbsolute ReturnsAnnualised Returns
1 Year2.23%4.17%
2 Year5.26%5.02%
3 Year9.30%5.87%
5 Year18.26%6.65%

Source - Money Control

Portfolio

Portfolio

The fund invests 96.35 percent of its assets in debt, with 15.89 percent in government securities and 80.46 percent in very low-risk securities. The fund's credit record is excellent, suggesting that it has lent to high-quality customers. Because most funds in this category lend to stronger borrowers, the risk of default is higher in this fund than in others in the category.

 GOI, Reliance Jio Infocomm Ltd., Axis Bank Ltd., Power Finance Corpn. Ltd., and Union Bank of India are among the fund's top holdings.

Disclaimer

Mutual fund investments are subject to market risk. Read all scheme-related documents, and Terms and Conditions carefully before investing. The above-mentioned information is purely informational and doesn't guarantee any return. The Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.

Read more about: mutual fund fd hdfc mutual fund sip
Story first published: Friday, March 18, 2022, 12:37 [IST]
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