The scheme, which has completed two decades of operations, also saw its assets under management (AUM) cross ₹6,500 crore, marking a dual milestone for the fund managed by Bandhan AMC.
Over the past one year, the Direct Plan (Growth) option of the fund delivered a return of 7.49%. The fund house said the scheme has outperformed its benchmark index across the one-, three- and five-year periods, as well as since inception.
Investment approach
Managed by Harshal Joshi, the open-ended low duration debt scheme invests in debt and money market instruments while maintaining a Macaulay duration between six and 12 months. This strategy seeks to limit sensitivity to interest rate movements. The fund house stated that it follows a relatively conservative credit approach within the portfolio.
The scheme has been rated in the highest safety category (AAA mfs) by ICRA, as per the statement.
Low duration funds typically cater to investors looking to park surplus funds for shorter time frames while aiming for relatively stable returns compared to longer-duration debt strategies.
Access and suitability
The fund allows a minimum investment of ₹100 for both systematic investment plans (SIPs) and lump-sum investments, lowering the entry barrier for retail participants.
Investor caution
Market participants note that although low duration funds generally carry lower interest rate risk than longer-tenure debt funds, they are not free from risk. Returns depend on prevailing interest rates, liquidity conditions and the credit quality of underlying securities. Past returns do not guarantee future performance.
Investors should align such investments with their time horizon, liquidity needs and risk profile before allocating funds to debt mutual funds.
ALSO READ | Land vs residential home buying: Where should investors put their money?