The best performing Mutual Funds in Liquid and Ultra Short-Term Mutual Funds




Liquid funds, money market funds, ultra short-term Mutual Funds are good for parking surplus funds that is likely to be deployed elsewhere in less than 2-3 months.  Liquid mutual funds hold securities with maturities of less than 91 days. Liquid mutual funds provide opportunity to earn returns higher than savings bank account. Ultra short-term bond funds can hold securities of maturity longer than 91 days and hence can provide marginally higher returns than liquid funds. Money in a liquid fund can be redeemed within a day. Tax on dividend income is 25 per cent for liquid funds and 12.5 per cent for other debt funds. Capital gains tax is applicable on liquid funds and indexation benefits apply for debt funds.

When considering investing in debt schemes, it's important to consider the average maturity profile of the portfolio (published in AMC website). To reduce the risk of volatility, the investor's holding period for the fund should be close to the fund's average maturity profile.

How have Liquid Funds performed? The following are the best performing Liquid mutual funds ranked based on risk adjusted performance. These funds have produced annual returns in the 7-8% range, which is much better than your bank account.  LIC MF Liquid Fund, HDFC Cash Management Fund and HDFC Liquid Fund have performed very well over short as well as longer period of time.  So, check your savings account balance and park your money in these funds instead.

FUND AUM (Rs Cr) NAV 1wk 1mo 3mo 6mo 1yr 2yr 3yr 5yr
LIC MF Liquid Fund 8,053.79 18.05 0.1 0.7 2 3.8 6.7 11.7 21.8 41.8
HDFC Cash Management 2,403.08 20.63 0.1 0.7 2.1 3.9 6.8 11.7 21.2 40.9
HDFC CMF-Treasury Advg 5,782.69 21.40 0.1 0.7 2 3.8 6.7 11.6 20.9 40.6
Principal Cash Management 731.77 15.36 0.1 0.7 2 3.9 6.7 11.3 20.8 40.2
HDFC Liquid Fund 539.17 19.51 0.1 0.7 2 3.8 6.6 11.2 20.5 39.8
Birla Sun Life Cash Manager 234.81 24.01 0.1 0.7 2 3.7 6.5 11.1 20.2 38.8
UTI Money Market Fund 125.00 2,742.94 0.1 0.7 1.9 3.7 6.3 10.9 20.5 38.9
SBI Magnum Insta Cash 3,320.77 21.92 0.1 0.7 2 3.9 6.8 11.1 20.2 38.8
IDFC Liquid Fund 478.73 1,392.95 0.1 0.8 2.3 4.2 7.2 11.9 19.5 38.4
Reliance Liquid Fund TP 727.57 23.58 0.1 0.7 2 3.8 6.4 11.1 20.4 38.5
Birla SL Cash Plus - RP 202.46 26.07 0.1 0.7 1.9 3.7 6.1 10.1 19 37.7
Templeton Treasury MA 199.33 2,419.35 0.1 0.7 1.9 3.7 6.4 10.6 19.8 38.1
UTI Liquid Cash Plan 354.99 1,588.70 0.1 0.7 1.9 3.7 6.3 10.5 19.5 37.9
ICICI Pru Liquid Plan 406.55 236.96 0.1 0.6 1.9 3.6 6.1 10 18.8 37.3
L&T Liquid 238.58 19.60 0.1 0.7 2 3.8 6.4 10.7 19.8 37.7
DSP-BR Liquidity Fund 163.65 23.42 0.1 0.7 2 3.8 6.7 10.4 18.9 35.8
HSBC Cash Fund 102.55 15.79 0.1 0.6 1.8 3.3 5.7 8.1 15.4 33.1
IDFC Cash Fund 102.26 17.52 0.1 0.7 1.9 3.7 6.4 10.6 19.3 34.6
Reliance Liquid - Cash 638.21 16.00 0.1 0.7 2.1 3.9 6.4 8.9 15.5 29.5

The numbers are absolute return.


See this article for ultra short-term funds.

Happy Investing!

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