Bandhan Ultra Short Term Fund - Direct Plan
An open-ended ultra-short term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3 to 6 months. A scheme with relatively low interest rate risk and relatively low credit risk.
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What is an Ultra Short Term Fund?
Do you have extra cash you might need in a few months but want to earn potentially more than a savings account? Ultra Short-Term Funds may be the solution. These relatively low-risk funds provide a short-term investment option, offering a safe place to park your money while earning potential returns.
Ultra short-term funds are a type of debt fund that invest in debt and money market instruments with a Macaulay duration of 3 to 6 months. They are considered low-risk due to their short investment horizon, offering liquidity and potentially favourable short-term returns.
While both ultra short-term debt funds and liquid funds are short-term debt instruments, liquid funds have a maximum maturity of 91 days, whereas ultra short-term funds mature between 3 to 6 months.
Investors can choose to invest in ultra short-term mutual funds through either SIP (Systematic Investment Plan) or lumpsum. However, the short investment horizon makes lumpsum investing more suitable.
Ultra short-term mutual funds are debt instruments. For taxation, units held for three years or less are subject to short-term capital gains tax, which is taxed according to the investor’s income tax slab.
- Min Investment 100
- Min SIP Amount 100
- Exit Load
Nil
Scheme is suitable as 'Core' debt allocation and is recommended for a minimum investment horizon of 3 months
Tier 1 Benchmark : NIFTY Ultra Short 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 | 19/07/2018 Since inception | 1 year | 3 year | 5 year | 10 year | 19/07/2018 Since inception | |
| Bandhan Ultra Short Term Fund - Regular Plan - Growth | 7.40 | 6.08 | 5.50 | N.A. | 6.09 | 10,742 | 11,944 | 13,071 | N.A. | 14,500 |
| 7.69 | 6.46 | 5.74 | 6.86 | 6.24 | 10,771 | 12,067 | 13,226 | 19,419 | 14,632 | |
| 7.54 | 5.97 | 5.52 | 6.39 | 6.05 | 10,756 | 11,902 | 13,087 | 18,593 | 14,466 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Harshal Joshi (w.e.f 18/07/2018)
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 Ultra Short Term Fund
(Scheme Risk-o-meter)
NIFTY Ultra Short 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 returns over short-term investment horizon with a low risk strategy
- To invest in debt and money market instruments
Who Should Invest in Ultra Short Duration Funds?
Ultra short-term funds are low-risk and suitable for risk-averse investors with a 3 to 6-month horizon. However, as a debt fund, they carry risks such as credit risk, interest rate risk, and liquidity risk, making them slightly riskier than liquid funds.
Ultra short-term funds typically offer relatively lower returns due to their low-risk nature and are subject to short-term capital gains tax, making them unsuitable for tax-saving purposes. They are ideal for investors seeking short-term investments in debt and money market instruments.
FAQs on Ultra Short Term Funds
What are ultra short term funds?
Ultra short term funds are a type of debt mutual fund. These funds invest in debt and money market instruments for a maximum time period of 6 months. They are categorised as a low-risk investment option and may offer potentially lower returns.
What is the tenure for ultra short term funds?
Ultra short duration funds have a maturity period of 3 to 6 months. They are considered a low-risk investment option that have the potential to offer low returns.
What are the risks of ultra short term funds?
Ultra short term debt funds are categorised as a low risk investment option, however as a debt fund they are subject to certain risks. They are vulnerable to credit risk, i.e. risk of default by the issuer, interest rate risk, the effect of increase or decrease in interest rates and liquidity risk, the inability to meet liquidity requests.
Are ultra short term mutual funds safe?
Ultra short term funds are considered a relatively safe and low-risk investment option, owing to their short investment tenure. However, all mutual funds are subject to some risks. These may include credit risk, interest rate risk and liquidity risk.
What are the benefits of ultra short term debt funds?
Ultra short term debt funds may be suitable for investors seeking to generate reasonable returns in the short-term by investing in debt and money market instruments. Risk-averse investors with a short-investment horizon, spanning between 3 to 6 months may potentially benefit from ultra short term funds. Investors may also use it as an emergency fund as they are a liquid investment option.
Where do ultra short term funds invest?
Ultra short term mutual funds invest in debt and money market instruments. The Macaulay duration of the scheme ranges between 3 to 6 months.