A common misconception among many people is that the mutual fund schemes are only for long-term investment purpose and they can't invest money for a short period of time. Well, that is not at all true as today there are mutual fund schemes for every need and every duration, be it short-term investments, long-term investments, retirement planning, low-risk investments etc. Now one of the best options for short-term investments are the debt low duration funds. In this article we are going to discuss one of the top schemes from this category, which is Kotak Low Duration Fund.
What is this Scheme?
The scheme was launched on Mar 06, 2018, with the purpose to generate reasonable income for investors by investing in short-term debt and money market instruments. The maturity of these instruments can range from 3 months to 1 year. This is one of the safest mutual fund schemes as the money is out into debt instruments, and the chance of loosing your investments with these instruments are higly unlikely. Currently, Kotak Low Duration Fund NAV is Rs 2159.29 (as on Jul 12, 2018) and the assets under management as recorded on Jun 30, 2018, are worth Rs 5053 crore. This scheme has been a consistent performer since its inception and has beaten its benchmark (CCIL T Bill Liquidity Weight) at every occasion. The returns that it has provided in last 1, 3, 5, and 10 years are 6.62%, 7.99%, 8.24%, and 7.72% respectively (as on Jul 12, 2018). These returns are not over the top but are considerably good as compared to the low risk involved. The best thing about the scheme is that there are no exit load charges and it also does not have a lock-in period. When you put a payout request you will get the money in your account within 1 or 2 working days. The expense ratio of the scheme is 1% of your principal amount (As of May 31, 2018 ) which will be charged annually. Mr. Deepak Agarwal is the current fund manager and has been managing this scheme since Jan 2015. He holds around 20 years of experience in the capital market.
Fund Allocation
Kotak Standard Multicap Fund currently has investments in a total of 82 securities from which most of the instruments are AA rated. It has 71.32% investment in AA rated instruments, 13.69% in AAA rated instruments, 4.29% in A1+ rated instruments and 6.41% investment in A and below rated instruments. The scheme invests in a mix of bond, debentures, and commercial papers. The top holdings of the fund are from companies like Uttar Pradesh Power Corporation, Bank of Baroda, SD Corporation, Mannapuram Finance, Shriram Industrial Holdings, Edelweiss Commodities Services, Piramal Enterprises, and Vedanta.
Who can Invest?
Kotak Standard Multicap Fund is a great option for investors who are looking to park their money for a very short amount of time and don't want to take any risk with their investment. Investors can invest their money even for a single day and can redeem amount without paying any charges. It is just like a savings account, a little bit difference is that this fund provides returns which are almost double of what saving account offers and the risk involved is also a few milligrams more. So, if you have any spare money in savings account you should consider putting it in this fund.
Now you know that why this scheme is a better investment option than a conventional savings account. Many people have already chosen this scheme as their savings option and are enjoying the benefits. So don't wait and change the way you save as soon as possible.
This article is to know about Kotak Low Duration Fund.
Dishika baheti is an Analyst working with MySIPonline. He has been working in financial industry since years and holds a lot of experience in analyzing Debt mutual fund schemes.