Ultra short term debt mutual fund

Q & A Forum › Category: Investments › Ultra short term debt mutual fund

manojkhadilkar asked 8 years ago

I have invested in ABSL short term debt fund & ICICI flexible income fund for the time horizon of 3 to 4 years. My queries are

As RBI started increasing the interest rates. In such case, Short term debt funds may underperform hence I have decided to switch to ultra short term debt funds.

Is this decision is OK.?

I have short listed ABSL savings fund as ultra short term debt fund.& ICICI prud. Ultra short term fund. Is these debt funds are good?

Requested to suggest some more good Ultra short term debt funds.for 3 to 4 year time horizon.

ICICI ultra short term fund ( Formerly known as ICICI pru.Regular income fund)

As per fund site this is ultra short term fund but as per Value research ,it is Hybrid Debt oriented conservative fund,why there is difference

5 Answers

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Sreekanth Staff answered 8 years ago

Hi, In general, a raising interest rate scenario is not that good for debt funds (especially long term ones). The two short-listed ultra short term debt funds are ok. ICICI ultra short term fund is an Ultra ST fund only. Its benchmark is (even as per VR) NIFTY Ultra Short Term. Go by the information available in Fund house's website.

manojkhadilkar replied 8 years ago

Thanks for the reply. Instead of ICICI ultra short term Debt fund ( As per VRO , Credit Quality is medium ) now I have selected UTI Ultra short term Debt fund.
As My investment amount is high , I am selecting two fund ABSL Savings & UTI Ultrashort Debt fund
Pl. let me know your opinion

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manojkhadilkar answered 8 years ago

Thanks for the reply. Instead of ICICI ultra short term Debt fund( As per VRO , Credit Quality is medium ) now I have selected UTI Ultra short term Debt fund.
As My investment amount is high , I am selecting two fund ABSL Savings & UTI Ultrashort Debt fund
Pl. let me know your opinion

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Sreekanth Staff answered 8 years ago

Hi, Ok. The returns from Debt funds may not be as high as previous few years. So, you may kindly keep this point in consideration..

manojkhadilkar replied 8 years ago

Thanks fo reply.My investment horizon is 3 years.I am expecting
interest of FD & also take advantage of indexation.
Request you to suggest any better option

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manojkhadilkar answered 8 years ago

Thanks for reply.My investment horizon is 3 years.I am expecting
interest of FD & also take advantage of indexation.
Request you to suggest any better option than ultra short mutual fund

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Sreekanth Staff answered 8 years ago

Hi, You may kindly look at Secured NCDs as one of the alternatives. But, kindly understand the risks associated with NCDs. You may park a portion of your corpus in secured NCDs. Kindly read :