Best Performing Floating Rate Funds returning over 9%

The policy-tightening cycle might be near its end. Floating rate instruments give a market related rates of return without much added price volatility. The interest rates are high, interest payments in floating rate instruments also go higher. Here is the performance of floating rate mutual funds.

FUND	AUM (Rs Cr)	1wk	1mo	3mo	6mo	1yr
Can Robeco Float Rate-STP	180.52	0.1	0.8	2.3	4.7	9.2
L&T Short Term FRF	2.51	0.1	0.8	2.3	4.6	8.9
SBI Magnum Income - FRP - LTP	5.30	0.1	0.8	2.3	4.7	8.8
HDFC Float Rate Inc-LTP	992.41	0.1	0.7	2.2	5	9.3
SBI Magnum Income - FRP - SPBP	184.46	0.1	0.7	2.2	4.6	9
Tata Floater Fund	4,672.52	0.1	0.7	2.3	4.6	8.9
Principal NTF - Conservative	403.75	0.1	0.7	2.2	4.6	8.8
Kotak Floater LTP	4,031.15	0.1	0.7	2.3	4.6	8.8
ICICI Pru Floating Rate -D	2,237.21	0.1	0.7	2.2	4.5	8.8
Kotak Floater STP	2,825.70	0.1	0.7	2.2	4.5	8.7
Birla SL FRF - LTP - RP	130.17	0.1	0.7	2.3	4.6	8.7
Reliance Floating Rate	1,218.58	0.1	0.7	2.2	4.6	8.6
Principal NT - Moderate Plan	185.29	0.1	0.7	2.2	4.3	8.5
Birla SL FRF - STP - RP	116.65	0.1	0.7	2.2	4.5	8.5
HDFC Float Rate Inc-STP RP	640.13	0.1	0.7	2.1	4.3	8.3
Tata Money Market Fund - RP	18.86	0.1	0.7	2	4.2	8.3
Templeton FRIF (RP)	434.44	0.1	0.7	2.1	4.3	8.3
IDFC MMF-Invest. - RP A	273.18	0.1	0.7	2.1	4.6	8.2
ICICI Pru Floating RP - C	37.55	0.1	0.7	2.1	4.2	8
HSBC FRF - LTP (RP)	45.32	0.1	0.7	2.1	4.1	7.9
ICICI Pru Floating RP - A	380.00	0.1	0.7	2	4.1	7.9
ICICI Pru Floating RP - B	49.23	0.1	0.7	2	4.1	7.8
Tata Floating Rate - LTP	2.78	0.1	0.7	2.4	4.3	7.4
LIC NOMURA Floating Rate	139.95	0.1	0.7	2	3.8	7.1

Birla Sunlife and HDFC’s floating rate funds are good bets.


Returns are absolute returns as of November 6, 2011.
Source of Data: Moneycontrol.com

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!

Float with these Floating Rate Funds

 

When interest rates are high, interest payments in floating rate instruments also go higher. Several floating rate funds have done well recently with increasing rates. Floating rate instruments give a market related rates of return without much added price volatility.

 

The following are some good floating rate mutual funds and their historical performance (absolute return%).

 

FUND	AUM (Rs Cr)	NAV	1wk	1mo	3mo	6mo	1yr	2yr	3yr	5yr
HDFC Float Rate Inc-LTP	1,501.46	16.97	0.1	1.4	2.8	4.3	7	14.5	25.8	45.4
Birla SL FRF - LTP - RP	218.84	16.89	0.1	0.8	2	3.8	6.7	15.1	25.3	45.9
Reliance Floating Rate	2,739.10	15.53	0.1	1.2	2.5	3.9	6.9	12.1	22.2	42.4
Can Robeco Float Rate-STP	142.16	15.27	0.1	0.8	2.2	4.1	7.1	12.2	22.5	42.7
Tata Floater Fund	6,303.53	14.72	0.1	0.8	2.1	4	7	12.2	22.4	42.6
Kotak Floater LTP	3,482.74	15.64	0.1	0.8	2.1	4	6.8	12.2	22.2	43.1

Company Fixed Deposits & Fixed Income

Several companies in India offer fixed deposit schemes (company fds) that offer interest rates higher than banks. However, one needs to know that these companies instruments (and NBFCs also) are unsecured and do not guarantee anything to the investor in case of a default.  Also, liquidity is an issue as each corporate might behave differently and may not return money in time. Hence investors need to carefully analyze the credentials of the company.  However there are several good companies out there who do a professional job at this.  It's better to break up the investment amount and distribute it among 2-3 companies. There is reward for the risk taken. The usual income tax treatment (like bank fixed deposits) apply.
Go to a site like Bajaj Capital or Integrated Enterprises and you will find these (fixed income) instruments. While these companies collect incentives to collect investments from you, they also have lot of knowledge and you can ask them questions, collect data and judge for yourself See some examples below collected from their site (April 13, 2011). Company fd interest rates might be peaking.

		INTEREST ( % )						Updated on - Apr 11, 2011
COMPANY	RATING	6 MON	1 YEAR	2 YEAR	3 YEAR	5 YEAR	ADDITIONAL SR.CT	EFFECTIVE FROM	DOWNLOAD	ORDER
Apollo Hospitals Enterprises Ltd			8.25	8.50	9.00			23/02/2011	DOWNLOAD
CANFIN HOMES LTD	ICRA-MAA+		8.30	8.30	8.30	7.60	0.50(upto 1 cr)	10/01/2011	DOWNLOAD
DHFL Aashray Deposit Scheme	CARE-AA+ and BWR-FAAA		365 Days-Trusts Only-10.50%	400 Days-General-10.25%			0.25% for General only	22/03/2011	DOWNLOAD
DHFL-Aashray Deposit Plus	CARE-AA+ and BWR-FAAA		10.00	10.00	10.00	10.00	0.25%	22/03/2011	DOWNLOAD
DHFL-Swayam Sidha Deposit			500 Days-10.00%				0.25%	22/03/2011	DOWNLOAD
Elder Pharmaceuticals Limited			8.00	9.50	10.50		0.50	15/02/2011	DOWNLOAD
EXIM BANK OF INDIA	CRISIL-FAAA, ICRA-MAAA, FITCH- TAAA		8.50	8.50	8.75	9.00	0.50	20/01/2011	DOWNLOAD
FIRST LEASING COMPANY OF INDIA LIMITED	CARE-AA+, FITCH-tAA+		10	10.25	10.50			07/02/2011	DOWNLOAD
Gabriel India Limited			9.00%	9.50%	10.00%			10/02/2011	DOWNLOAD
HDFC LIMITED	CRISIL-FAAA, ICRA-MAAA		9.00	9.15	9.25	9.00	0.25	03/02/2011	DOWNLOAD
HDFC LTD-PLATINUM DEPOSIT	CRISIL-FAAA, ICRA-MAAA		15 MONTHS: 9.50%	22 MONTHS-9.30%	33 MONTHS-9.50%		0.25	04/02/2011	DOWNLOAD
HUDCO	FITCH-TAAA, CARE-AA+		8.70	8.85	8.95	9.05	0.25	02/04/2011	DOWNLOAD
ICICI HOME FINANCE	ICRA-MAAA, CARE-AAA		8.25	8.75	8.75	8.50	0.25	31/01/2011	NOT AVAILABLE
J.K LAXMI CEMENT LTD			8.00	8.50	8.50			15/12/2009	DOWNLOAD
J.K.TYRE & INDUSTRIES LIMITED			9.00	9.25	9.50			15/01/2011	DOWNLOAD
JAIPRAKASH ASSOCIATES LTD		10.50	10.50	11.00	11.50			22/09/2010	DOWNLOAD
Jaypee Infratech Limited		10.50	10.50	11.00	11.50			01/10/2010	DOWNLOAD
JK PAPER LIMITED			8.00	8.25	8.50			14/09/2010	DOWNLOAD
Kerala Transport Development Finance Corporation Limited	NA		9.25	9.25	9.50	9.50	0.25	04/04/2011	DOWNLOAD
LIC HOUSING FINANCE LTD	CRISIL- FAAA		9.00	9.25	9.50	9.50	0.10 upto Rs. 50,000 and 0.25 for above Rs. 50,000	24/02/2011	DOWNLOAD
MAHINDRA & MAHINDRA FIN SERV LTD	CRISIL-FAAA		8.50	9.50	10.00	10.00	0.25%	24/01/2011	DOWNLOAD
NATIONAL HOUSING BANK (SUNIDHI SCHEME)	CRISIL-FAAA, FITCH-TAAA		8.75	8.75	9.00	9.25	0.60	14/02/2011	DOWNLOAD
NATIONAL HOUSING BANK(SUVRIDHI TAX SAVING SCHEME)	CRISIL-FAAA, FITCH-TAAA					9.25	0.60	14/02/2011	DOWNLOAD
NTPC Limited	CRISIL-FAAA		6.50 (Non cumulative)	6.75 (Non-Cumulative)	7.00 (Cumulative)			26/09/2010	NOT AVAILABLE
OCL Limited			7.50	8.00	8.00			18/09/2010	DOWNLOAD
Plethico Pharmaceuticals Limited			11.00%	11.50%	12.00%		0.50%	25/03/2011	DOWNLOAD
PNB Housing Finance Ltd	FAAA by CRISIL		9.00	9.00	9.50	9.50	0.50	01/04/2011	DOWNLOAD
Shriram Transport Finance UNNATI Scheme	CRISIL-FAA+ & ICRA-MAA+		9.25	9.75	10.75	10.75		07/01/2011	DOWNLOAD
SIDBI	CRISIL-FAAA, CARE-AAA		8.75	8.75	8.75	8.50	0.50	17/02/2011	DOWNLOAD
TN Power Finance & Infrastructure Dev Corp. Ltd			9.00	9.25	9.50	9.50	0.25% upto 2 years and 0.50% for 3 years & above	16/12/2010	NOT AVAILABLE
UNITECH LMITED		11.00	11.00	11.50	12.00		0.50	01/05/2009	DOWNLOAD
United Spirits Limited			11.00	11.50				01/02/2011	NOT AVAILABLE

Source: (Bajaj Capital)

Select Manufacturing Companies Accepting fresh deposits

Company Name Rate of Interest (%) 1 Year 2 Years 3 Years Remarks Min. Amount Multiples of  Apollo Hospitals Enterprises Ltd 8.25 8.50 9 -- 25000 1000  Elder Pharmaceuticals Ltd 7 8.50 9.50 0.50% additional for senior citizens & shareholders 25000 1000  Godrej Industries Ltd -- 8 8.50 -- 10000 1000  India Cements Ltd 7.5 8 8.5 -- 21000 1000  Mahindra & Mahindra Ltd 7 -- 8 -- 25000 1000

Select Non Banking Finance Companies Accepting fresh deposits

Company Name Rate of Interest (%) 12 Months 24 Months 36-60 Months Remarks Min. Amount Multiples of Rating   Shriram Transport Fin.Co. Ltd. (UNNATI) 9.25 9.75 10.75 -- 25000 1000 FAA+/stable(CRISIL) MAA+/stable(ICRA)   Mahindra Finance - Samruddhi [Cumulative Scheme] 8.5 9.5 10.00 0.25% additional for senior citizens 10000 1000 FAAA / stable (CRISIL)   Mahindra Finance - Samruddhi [Non – Cumulative Scheme] 8.25 9.25 9.75 0.25% additional for senior citizens 25000 1000 FAAA / stable (CRISIL)

Company Name Rate of Interest (%) 12 Months 24 Months 36,48 & 60 Months Remarks Min. Amount Multiples of  Tamil Nadu Power Finance & Infrastructure Development Corporation Ltd [Cumulative Scheme] 9.25 9.50 10 0.25% ( for 12 & 24 months) & 0.50% (for 36,48 & 60 months) additional for senior citizens 10000 1   Tamil Nadu Power Finance & Infrastructure Development Corporation Ltd [Non Cumulative Scheme] -- 9.58 10.08 0.25% ( for 24 months) & 0.50% (for 36,48 & 60 months) additional for senior citizens 10000 1000

Select Home Finance Companies Accepting fresh deposits

Company Name Rate of Interest (%) 400 Days 12-84 Months Special Additional Interest Min. Amount Multiples of Rating  DHFL AASHRAY Deposit 400 Days  Non-Cumulative Scheme 10.51 - 0.25% extra for senior citizen & share holders 10000 1000 CARE (AA+) FD BWR FAAA  DHFL AASHRAY Deposit 400 Days  Cumulative Scheme 10.25 - 0.25% extra for senior citizen & share holders 10000 1000 CARE (AA+) FD BWR FAAA  DHFL AASHRAY Deposit Plus Non-Cumulative Scheme (Deposit < Rs.25 lac) - 10.25 0.25% extra for senior citizen & share holders 10000 1000 CARE (AA+) FD BWR FAAA  DHFL AASHRAY Deposit Plus Cumulative Scheme (Deposit < Rs.25 lac) - 10.00 0.25% extra for senior citizen & share holders 2000 1000 CARE (AA+) FD BWR FAAA

Company Name Rate of Interest (%) 15 Months 22 Months 33 Months Remarks Min. Amount Multiples of Rating  HDFC Ltd(Platinum Deposits) 9.50 9.30 9.50 0.25% additional for senior citizens 20000 1000 FAAA (CRISIL) MAAA (ICRA)

Company Name Rate of Interest (%) 12 Months 15 Months 20 Months 30 Months 40 Months 60 Months Remarks Min. Amount Multi- ples of Rating  ICICI Home Finance (<=1Crore)[Annual/Cumulative]Special Scheme 8.50% 8.60% 9% 9% 8.75% 8.50% 0.25% additional for senior citizens 10000 1000 AAA (CARE) MAAA (ICRA)

Company Name Rate of Interest (%) 12 Months 24 Months 36 Months 60 Months Remarks Min. Amount Multiples of Rating  LIC Housing Finance Ltd 9 9.25 9.50 9.50 0.10% additional for senior citizen upto Rs. 50000     & 0.25%  additional  for senior citizen for Rs.51000/- and above 10000 1000 FAAA (CRISIL)  National Housing Bank Sunidhi Term Deposit[Non Cumulative] 7.25 7.25 8 8 0.50% extra  for senior citizen 50000 10000 CRISIL “FAAA” / FITCH “TAAA”  National Housing Bank Sunidhi Term Deposit[Cumulative] 7.45 7.45 8.24 8.24 0.50% extra  for senior citizen 50000 10000 CRISIL “FAAA” / FITCH “TAAA”

Company Name Rate of Interest (%) 12 Months 24 Months 36 Months Remarks Min. Amount Multiples of Rating  Sundaram BNP Paribas  Home Finance 9.25 9.50 9.50 0.50% additional for senior citizens 10000 1000 MAA+/stable (ICRA)

Source: (Integrated Enterprises)