Amid high volatility in the stock market over the past six months, short-duration mutual fund schemes have yielded investors with better returns than bank fixed deposits, giving up to 7.51% returns. Over three years, these schemes have delivered returns of up to 7%. Actually, short-duration funds allow investors to invest for a shorter period. These schemes primarily invest in debt instruments, ensuring better security while offering reasonably stable returns.
Axis Short Duration Fund is one such scheme, which is an open-ended short-term debt scheme that mainly invests for one to three years. This fund follows a high-quality, low-risk strategy, ensuring stable returns. By focusing on short-duration assets and interest rates, it aims to generate balanced returns over the long term.
Its portfolio is well-diversified, making it suitable for investments with a one-year outlook. It primarily invests in AAA and A1+ rated assets or their equivalents. The fund does not invest in assets rated below AA.
Such fund schemes track corporate bonds, government securities, and money market instruments. They invest in corporate bonds and government securities with a tenure of two to five years, though there is no restriction on individual securities.
Axis Short Duration Fund allocates 61% of its investments to corporate bonds and over 25% to government bonds. A key advantage for investors is that the fund has no entry or exit load. Its assets under management stand at ₹8,780 crore. Investors can start with a lump sum of ₹5,000 or a monthly SIP of ₹1,000. If an investor had invested ₹10,000 in this scheme at the beginning of 2013, its value would have grown to ₹25,824 crore by January 31, 2025.
According to Arthlabh data, among the top-performing fund houses over three years, HDFC delivered a return of 6.60%, Aditya Birla 6.59%, Axis 6.43%, ICICI Prudential 7.02%, and Bandhan Fund 6.15%.