Introduction:
Looking for stability and liquidity in your investments? Ultra short-term funds might be the answer. These mutual funds focus on short-term fixed-income securities with maturities of up to six months. They offer high liquidity and remain one of the lowest-risk categories in debt mutual funds. They can be an ideal option if you seek a short-term parking spot for your capital without compromising potential earnings. Let's explore the top options in this category in the Indian market for 2024.
Best ultra short mutual funds in 2024
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1. Nippon India Ultra Short Duration Fund Direct-Growth
Nippon India Ultra Short Duration Fund Direct Growth, managed by Vivek Sharma, has a meticulously crafted portfolio comprising 98.6% debt holdings and 1.4% cash reserves. With an expense ratio of just 0.38% and no exit load, this fund presents an attractive proposition for 2024 if you are seeking low-cost, low-risk options. As of February 21, 2024, the fund's Assets Under Management (AUM) stand impressively at ₹ 5,319.17 crore.
2. PGIM India Ultra Short Duration Fund
PGIM India Ultra Short Duration Fund stands out with its investor-friendly features, including no exit load and a low expense ratio of 0.28%. With an impressive AUM of ₹ 293 crore, the fund's debt holdings include the State Bank of India, Reserve Bank of India (RBI), HDFC Bank Ltd., and Small Industries Devp. Bank of India Ltd., further enhancing its credibility in the market. The fund follows the CRISIL Ultra Short Duration Debt B-I Index benchmark.
3. ICICI Prudential Ultra Short-Term Fund
ICICI Prudential Ultra Short-Term Fund emerges as a robust option in 2024 with its substantial AUM of ₹ 13,854 crore and adherence to the CRISIL Ultra Short Duration Debt B-I Index as its benchmark. This fund boasts a nil exit load and a well-diversified portfolio, with 92.86% allocated to debt and 7.14% to other instruments. Notable debt holdings include Reserve Bank of India, Axis Bank Ltd., Small Industries Devp., Bank of India Ltd., and IndusInd Bank Ltd. Managed by Manish Banthia and Ritesh Lunawat, this fund can be a viable option in 2024 if you plan for your short-term goals.
4. HDFC Ultra Short-Term Fund
HDFC Ultra Short-Term Fund emerges as a formidable choice with an AUM of ₹ 12,397 crores and a competitive expense ratio of 0.36%. The fund aligns with the CRISIL Ultra Short Duration Debt B-I Index as its benchmark and has no exit load. Its well-balanced portfolio allocates 95.49% to debt and 4.51% to other instruments, showcasing a prudent diversification strategy. Its noteworthy debt holdings include Axis Bank Ltd., Punjab National Bank, Canara Bank, and ONGC Petro Additions Ltd. Three fund managers manage the fund, including Anil Bamboli, Amar Kalkundrikar, and Vikash Agarwal.
5. Axis Ultra Short-Term Fund - Direct Plan
Axis Ultra Short-Term Fund - Direct Plan is another option with a focused approach, dedicating 99.29% of its portfolio to debt and 0.71% to cash and cash equivalents. Some of its notable holdings feature esteemed institutions like the National Bank for Agriculture and Rural Development, Canara Bank, Godrej Industries Ltd, HDFC Bank Ltd, Bharti Telecom Ltd., and the Reserve Bank of India. With an expense ratio of 0.31% and no exit load, this fund is managed by two fund managers, Aditya Pagaria and Sachin Jain.
6. Tata Ultra Short-Term Fund – Direct-Growth
Tata Ultra Short-Term Fund - Direct-Growth can offer a strategic avenue with its focused portfolio and a substantial fund size of ₹ 2,377 crore. With a minimal expense ratio of 0.31% and no exit load, this fund prioritises cost efficiency. Managed by Akhil Mittal, its holdings encompass GSEC2024, Power Finance Corporation, Canara Bank, and Export-Import Bank of India (EXIM). With a commitment to prudent management, this fund can be one of the options for you to invest in 2024.
7. IDBI Ultra Short-Term Fund – Direct-Growth
IDBI Ultra Short-Term Fund - Direct-Growth has a low expense ratio of 0.25% and a sizable fund size of ₹ 146 crore. The fund's holdings primarily consist of TREPS, TBILL-91D, and investments in Kotak Mahindra Bank. With a zero exit load, you can enjoy managing your investments flexibly. The IDBI ultra short-term fund is an attractive choice managed by Raju Sharma.
To sum it up
Ultimately, the best ultra-short mutual funds for 2024 will depend on your individual investment objectives, risk tolerance, and time horizon. Aligning these factors with the fund options mentioned above can help you create an effective portfolio strategy.
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