Overview
Ultra Short to Short Term Funds funds typically invest into debt and money market securities with a maturity between 6 to 12 months. Given the maturity can be upto 1 year, the risk involved is typically larger than liquid funds. Do look at the risk o meter rating to make sure that fund is investing in high quality instruments.
Goal
Some Income generation with relatively less interest rate risk.
Taxation
These funds are taxed as debt funds and gains are taxed only on redemption. Taxation rules keep changing so please consider above content for information purpose only and verify things with your tax person.
Questions
- How do these funds compare against liquid funds as well as 5 year government securities?
- If you consider your tax rate do you get positive or negative returns after adjusting for inflation?
- Compare returns of FD with similar maturities vs these funds, who gives better returns and why?
- What was impact of interest rate hike (and cut) on this category on the day it got announced, 1 month after the announcement and 120 days after the announcement, assuming there are no further announcements.
- New investment in these funds are now taxed at slab rate on redemption, why would someone still prefer these over FDs?
Analyze rolling returns, drawdowns, win/loss distributions, and risk metrics for the CATEGORY-ULTRA-SHORT-TO-SHORT-TERM-FUNDS benchmark series.
View Ultra Short to Short Term Funds Series Details