Bandhan Low Duration Fund - Direct Plan
An open ended low duration debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 6 months and 12 months. A scheme with relatively low interest rate risk and relatively low credit risk.
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What is a Low Duration Fund?
Low-duration funds are an ideal option for short-term investments, offering low risk while providing potential returns by investing in short-term debt and money market instruments.
Low-duration debt funds are open-ended schemes that invest primarily in debt and money market instruments with a Macaulay duration of 6 to 12 months. These low duration funds are considered low-risk due to their short investment horizon and offer high liquidity with the potential for short-term returns.
While both low-duration debt funds and liquid funds are low-risk debt funds, low-duration mutual funds have a Macaulay duration of 6 to 12 months, compared to liquid funds, which mature within 91 days.
Investors can choose between SIP and lumpsum investments, though due to the short horizon, lumpsum investments may be more suitable for low duration funds.
Taxation of low-duration mutual funds depends on the holding period. Units held for less than three years are taxed as Short-Term Capital Gains (STCG) based on the investor's tax bracket. Units held for more than three years are subject to Long-Term Capital Gains (LTCG) at 20%.
- Min Investment 100
- Min SIP Amount 100
- Exit LoadNil (Since 29th June 2012)
Scheme is suitable as 'Core' debt allocation and is recommended for a minimum investment horizon of 6 months
Tier 1 Benchmark : NIFTY Low Duration Debt Index A-I (w.e.f. 1st April 2022)Alternate Benchmark : CRISIL 1 Year T-Bill Index
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Performance as on 31st October 2024
| Scheme Names | CAGR Returns (%) | Current value of Investment of 10,000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 year | 3 year | 5 year | 10 year | 17/01/2006 Since inception | 1 year | 3 year | 5 year | 10 year | 17/01/2006 Since inception | |
| Bandhan Low Duration Fund - Regular Plan - Growth | 7.39 | 5.91 | 5.68 | 6.89 | 7.16 | 10,741 | 11,886 | 13,188 | 19,476 | 36,700 |
| 7.58 | 6.16 | 5.71 | 6.82 | 7.61 | 10,760 | 11,965 | 13,206 | 19,345 | 39,728 | |
| 7.54 | 5.97 | 5.52 | 6.39 | 6.17 | 10,756 | 11,902 | 13,087 | 18,593 | 30,813 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Harshal Joshi (w.e.f 28/07/2021)
View fund performance of other funds managed by Mr. Harshal Joshi
Past performance may or may not be sustained in future.
Regular and Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
Taxation:
For taxation, please refer the link : https://bit.ly/46xQzi1
Bandhan Low Duration Fund
(Scheme Risk-o-meter)
NIFTY Low Duration Debt Index A-I (w.e.f. 1st April 2022)
(Tier 1 Benchmark Risk-o-meter)
This product is suitable for investors who are seeking* :
- To generate short term optimal returns with relative stability and high liquidity.
- Investments in debt and money market instruments such that the Macaulay duration of the portfolio is between 6 months- 12 months
Who Should Invest in Low Duration Debt Funds?
Low-duration debt funds are low-risk investments suitable for investors with a low-risk appetite. These low duration funds are less vulnerable to market fluctuations and may offer potential short-term returns.
Low-duration funds are ideal for investors seeking short-term, highly liquid investments, making them suitable for building emergency funds. These funds are taxed like other debt funds and may not suit investors seeking tax-saving options.
FAQs on Low Duration Debt Funds
What is a low duration fund?
Low duration mutual funds are an open-ended debt mutual fund scheme that invest primarily in debt and money market instruments for a Macaulay duration of 6 to 12 months. They may be suitable for investors with a low-risk appetite, seeking short-term and liquid investments.
Is a Low Duration Debt Fund taxable?
Low Duration Debt Funds are essentially a type of debt funds and are subject to taxation accordingly. Units of low duration funds held for less than 3 years may be subject to STCG as per the income tax slab of the investor. For units held over 3 years, LTCG tax at 20% is levied.
What are the advantages of Low Duration Funds?
Low Duration Debt Funds are a highly liquid and relatively low-risk investment option for investors seeking to invest for a short period of time. Investors may be able to potentially earn reasonable returns in the short-term. Low duration funds returns may be low, but may be relatively more favourable than letting money sit idle.
Are Low Duration Funds safe?
Low Duration Funds are classified as a low-risk investment option. As they invest in debt and money market securities for a relatively short duration, they are less vulnerable to market volatility and fluctuations and may provide investors with reasonable returns. However, all mutual funds are subject to risk; low duration debt funds may be vulnerable to credit risk, inflation risk and interest rate risk.
Who should invest in Low Duration Funds?
Low Duration Debt Funds are suitable for investors seeking short-term investments in debt and money market instruments. These funds are a low-risk and highly liquid investment option and may generate potentially reasonable returns. Investors seeking these characteristics may benefit from low duration mutual funds.
What are the disadvantages of Low Duration Debt Funds?
Low Duration Debt Funds are largely regarded as a low-risk and short-term investment option. However, all mutual funds are subject to some risks; low duration debt funds are subject to credit risk or the risk of default and interest rate risk due to their short holding period. Moreover, low duration debt funds are not a suitable instrument for wealth creation.