ICICI Prudential Short Term Fund, the topper in the category, offered 7.40% in 2023. HDFC Short Term Debt Fund gave 7.14% and Baroda BNP Paribas Short Duration Fund gave 6.99%. UTI Short Duration Fund and Franklin India Short Term Income Plan gave 6.92% in 2023.
The short duration fund category has an allocation of around 43.83% in AAA papers. The category also had an allocation of 38.48% in sovereign rated papers. It also had an allocation of 7.76% in AA papers. The category had 4.98% in cash and cash equivalents. The category also had an allocation of 4.71% in A1 rated papers. The short duration funds also had minimal allocation of 0.23% and 0.01% in unrated papers and others respectively.
The short duration fund category had an allocation of 32.91% in the papers that had maturity between one to three years. Around 23.33% allocation was made in the papers that had maturity between three to five years. The category had an allocation of 23.1% in papers that had maturity above five years. The category also made an allocation of 14.17% in papers that had maturity up to 12 months. The category also had an allocation of 6.49% in papers that had no maturity.
According to the Amfi data, the short duration fund category in 2023 witnessed a total inflow of Rs 392.96 crore.
The asset under management of the short duration fund category as on December 31, 2023 was at Rs 1 lakh crore. The asset under management of the short duration fund category has grown by 11% in 2023, from Rs 90,304.91 crore in January to Rs 1 lakh crore in December.
Note, the above exercise is not a recommendation. The exercise was done to find how the short duration fund category performed in 2023. One should not make investment or redemption decisions based on the above exercise.
If you are looking for recommendations, see:
Best short duration mutual funds to invest
Short duration schemes invest in treasury bills, commercial papers, certificates of deposits and so on to take care of their liquidity needs. They also invest in corporate bonds, government securities, among others. If you are looking for debt schemes to invest for one to three years without much volatility, you can consider short duration funds.
