Low Duration Mutual Funds are the debt funds that invest in the money market instruments whose investment duration ranges between 6 to 12 months. Low duration mutual funds are suitable for low-risk appetite investors with one hear investment horizon. These debt funds offer low risk features along with higher return profits approximately ranging from 6.5 and 8.5 percent range. When it comes to select the better mutual fund investment option, an investor must consider the following factors such as financial goals, risk preferences and investment horizon. Based on these factors the individual can choose the suitable type of investment option.
What are the factors of Low Duration Mutual Funds?
Though this is a low-risk investment option, every individual must remember that be it a low risk or high risk every mutual fund investment instrument comes with some risks like, Credit risk, interest rate risk and liquidity risk, low quality debt securities, etc. Based on that any investor must choose the suitable type of investment option.
As it is a low duration investment option, we should track the expense ratio. Go for the investment scheme that offers low expense ratio to profit more gains.
Implication of tax is based on the holding period, if the holding period is less than 3 years then it is termed as Short-Term Capital Gain. For such short-term holding period, tax is applied based on income tax slab. If the holding period is more than 3 years, it is termed as Long-Term Capital Gains, for low duration investment options the LTCG is taxed about 20% on the benefits.
- Short duration
- Low risk
- Excellent returns
- Direct chance to invest in nation's economy.
List of India's Top Low Duration Funds:
- Kotak Low Duration Fund
- Aditya Birla Sun Life Low Duration
- ICICI Prudential Savings Plan
- HDFC Low Duration
- Axis Treasury Advantage Fund
- Invesco India Treasury Advantage Fund
- SBI Magnum Low Duration Fund
Investor who is looking for low duration investment option and for low risk factors with excellent returns then this is the best option to invest your money.