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5 Best Short Duration (Short Term) Debt Funds To Invest In 2025
Generally, people believe that Mutual Fund investments are for long-term investors. Well, that's not true! There is a category of funds called Short Duration Funds or Short Term Debt fund that allow investors to invest for short-term along with keeping their money accessible. Though there are various Short Duration Funds available in the Market, investors are suggested to look for best Short Duration (Short Term) Debt Funds.
The best Short Duration (Short Term) Debt Funds are funds that allow investors to invest for a short term, typically for three years, to earn good returns with less market risk. These funds are highly suitable investors with a low-risk appetite who seek quick returns and a steady flow of Income without being affected by the daily changes in the bond markets.
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Best Short Duration Funds or Short Term Debt Funds FY 25 - 26
To generate income through investments in a range of debt and money market instruments of various maturities with a view to maximising income while maintaining the optimum balance of yield, safety and liquidity. ICICI Prudential Short Term Fund is a Debt - Short term Bond fund was launched on 25 Oct 01. It is a fund with Moderate risk and has given a Below is the key information for ICICI Prudential Short Term Fund Returns up to 1 year are on (Erstwhile BNP Paribas Short Term Income Fund) The primary objective of the Scheme is to provide income consistent with the prudent risk from a portfolio comprising various debt and money market instruments. However, there can be no assurance that the investment
objective of the Scheme will be achieved. The Scheme / Plan(s) do not guarantee / indicate any returns. BNP Paribas Short Term Fund is a Debt - Short term Bond fund was launched on 13 Sep 04. It is a fund with Moderately Low risk and has given a Below is the key information for BNP Paribas Short Term Fund Returns up to 1 year are on (Erstwhile HDFC Short Term Opportunities Fund) To generate regular income through investments in Debt/Money Market Instruments and Government Securities with maturities not exceeding 36 months. HDFC Short Term Debt Fund is a Debt - Short term Bond fund was launched on 25 Jun 10. It is a fund with Moderately Low risk and has given a Below is the key information for HDFC Short Term Debt Fund Returns up to 1 year are on An Open ended Income scheme with the objective to generate regular income by investing primarily in investment grade fixed income securities / money market instruments with short to medium term maturities and across the credit spectrum within the universe of investment grade rating. Aditya Birla Sun Life Short Term Opportunities Fund is a Debt - Short term Bond fund was launched on 9 May 03. It is a fund with Moderate risk and has given a Below is the key information for Aditya Birla Sun Life Short Term Opportunities Fund Returns up to 1 year are on To generate steady and reasonable income with low risk and high level of liquidity from a portfolio of money market securities and high quality debt. UTI Short Term Income Fund is a Debt - Short term Bond fund was launched on 19 Sep 07. It is a fund with Moderate risk and has given a Below is the key information for UTI Short Term Income Fund Returns up to 1 year are on Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity ICICI Prudential Short Term Fund Growth ₹57.6146
↓ -0.01 ₹20,033 1.7 3.8 7.8 6.7 7.8 7.74% 2Y 3M 7D 3Y 11M 12D BNP Paribas Short Term Fund Growth ₹25.4771
↓ -0.01 ₹258 0.6 1.3 4.6 6.5 5.16% 1Y 11M 26D 2Y 3M HDFC Short Term Debt Fund Growth ₹30.6672
↓ 0.00 ₹14,976 1.7 4.1 8.3 6.4 8.3 7.54% 2Y 9M 22D 4Y 26D Aditya Birla Sun Life Short Term Opportunities Fund Growth ₹45.5946
↓ -0.01 ₹8,804 1.7 4 8 6.4 7.9 7.64% 2Y 10M 6D 3Y 10M 2D UTI Short Term Income Fund Growth ₹30.4244
↓ 0.00 ₹2,640 1.6 3.9 7.8 6.2 7.9 7.53% 2Y 9M 11D 3Y 8M 5D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 8 Jan 25 Assets >= 100 Crore & Sorted on 3 Year CAGR Return.
1. ICICI Prudential Short Term Fund
CAGR/Annualized return of 7.8% since its launch. Ranked 11 in Short term Bond category. Return for 2024 was 7.8% , 2023 was 7.4% and 2022 was 4.7% . ICICI Prudential Short Term Fund
Growth Launch Date 25 Oct 01 NAV (08 Jan 25) ₹57.6146 ↓ -0.01 (-0.01 %) Net Assets (Cr) ₹20,033 on 15 Dec 24 Category Debt - Short term Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderate Expense Ratio 1.11 Sharpe Ratio 2.29 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-7 Days (0.25%),7 Days and above(NIL) Yield to Maturity 7.74% Effective Maturity 3 Years 11 Months 12 Days Modified Duration 2 Years 3 Months 7 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 19 ₹10,000 31 Dec 20 ₹11,065 31 Dec 21 ₹11,494 31 Dec 22 ₹12,029 31 Dec 23 ₹12,920 31 Dec 24 ₹13,930 Returns for ICICI Prudential Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 8 Jan 25 Duration Returns 1 Month 0.5% 3 Month 1.7% 6 Month 3.8% 1 Year 7.8% 3 Year 6.7% 5 Year 6.8% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.8% 2022 7.4% 2021 4.7% 2020 3.9% 2019 10.6% 2018 9.7% 2017 5.8% 2016 5.9% 2015 11.1% 2014 8% Fund Manager information for ICICI Prudential Short Term Fund
Name Since Tenure Manish Banthia 19 Nov 09 15.13 Yr. Nikhil Kabra 29 Dec 20 4.01 Yr. Data below for ICICI Prudential Short Term Fund as on 15 Dec 24
Asset Allocation
Asset Class Value Cash 10.37% Debt 89.39% Other 0.24% Debt Sector Allocation
Sector Value Corporate 53.35% Government 37.26% Cash Equivalent 9.14% Credit Quality
Rating Value AA 17.22% AAA 82.78% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.1% Govt Stock 2034
Sovereign Bonds | -13% ₹2,510 Cr 245,555,180
↑ 5,000,000 7.93% Govt Stock 2033
Sovereign Bonds | -7% ₹1,442 Cr 140,408,750 7.53% Govt Stock 2034
Sovereign Bonds | -4% ₹867 Cr 86,074,740 7.06% Govt Stock 2028
Sovereign Bonds | -3% ₹646 Cr 63,854,250 National Bank For Agriculture And Rural Development
Debentures | -3% ₹550 Cr 55,000
↑ 20,000 Small Industries Development Bank Of India
Debentures | -2% ₹370 Cr 37,000 Small Industries Development Bank Of India
Debentures | -2% ₹364 Cr 36,500
↑ 10,000 SANSAR AUG 2024 VII TRUST
Unlisted bonds | -2% ₹353 Cr 3,500,000,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹349 Cr 35,000
↑ 10,000 Muthoot Finance Limited
Debentures | -2% ₹302 Cr 30,000 2. BNP Paribas Short Term Fund
CAGR/Annualized return of 5.5% since its launch. Ranked 41 in Short term Bond category. . BNP Paribas Short Term Fund
Growth Launch Date 13 Sep 04 NAV (11 Mar 22) ₹25.4771 ↓ -0.01 (-0.02 %) Net Assets (Cr) ₹258 on 15 Feb 22 Category Debt - Short term Bond AMC BNP Paribas Asset Mgmt India Pvt. Ltd Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.98 Sharpe Ratio 0.07 Information Ratio -0.85 Alpha Ratio -1.04 Min Investment 5,000 Min SIP Investment 300 Exit Load NIL Yield to Maturity 5.16% Effective Maturity 2 Years 3 Months Modified Duration 1 Year 11 Months 26 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 19 ₹10,000 31 Dec 20 ₹11,014 31 Dec 21 ₹11,390 Returns for BNP Paribas Short Term Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 8 Jan 25 Duration Returns 1 Month 0.2% 3 Month 0.6% 6 Month 1.3% 1 Year 4.6% 3 Year 6.5% 5 Year 6.6% 10 Year 15 Year Since launch 5.5% Historical performance (Yearly) on absolute basis
Year Returns 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Fund Manager information for BNP Paribas Short Term Fund
Name Since Tenure Data below for BNP Paribas Short Term Fund as on 15 Feb 22
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 3. HDFC Short Term Debt Fund
CAGR/Annualized return of 8% since its launch. Ranked 30 in Short term Bond category. Return for 2024 was 8.3% , 2023 was 7.1% and 2022 was 3.5% . HDFC Short Term Debt Fund
Growth Launch Date 25 Jun 10 NAV (08 Jan 25) ₹30.6672 ↓ 0.00 (-0.01 %) Net Assets (Cr) ₹14,976 on 30 Nov 24 Category Debt - Short term Bond AMC HDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderately Low Expense Ratio 0.71 Sharpe Ratio 2.69 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load NIL Yield to Maturity 7.54% Effective Maturity 4 Years 26 Days Modified Duration 2 Years 9 Months 22 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 19 ₹10,000 31 Dec 20 ₹11,096 31 Dec 21 ₹11,525 31 Dec 22 ₹11,932 31 Dec 23 ₹12,784 31 Dec 24 ₹13,843 Returns for HDFC Short Term Debt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 8 Jan 25 Duration Returns 1 Month 0.5% 3 Month 1.7% 6 Month 4.1% 1 Year 8.3% 3 Year 6.4% 5 Year 6.7% 10 Year 15 Year Since launch 8% Historical performance (Yearly) on absolute basis
Year Returns 2023 8.3% 2022 7.1% 2021 3.5% 2020 3.9% 2019 11% 2018 9.7% 2017 7% 2016 6.5% 2015 9.3% 2014 8.7% Fund Manager information for HDFC Short Term Debt Fund
Name Since Tenure Anil Bamboli 25 Jun 10 14.53 Yr. Dhruv Muchhal 22 Jun 23 1.53 Yr. Data below for HDFC Short Term Debt Fund as on 30 Nov 24
Asset Allocation
Asset Class Value Cash 7.37% Debt 92.38% Other 0.25% Debt Sector Allocation
Sector Value Corporate 56.85% Government 37.33% Cash Equivalent 5.57% Credit Quality
Rating Value AA 12.61% AAA 87.39% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -7% ₹1,102 Cr 107,500,000 7.3% Govt Stock 2028
Sovereign Bonds | -3% ₹517 Cr 51,500,000 Aditya Birla Renewables Limited
Debentures | -3% ₹437 Cr 43,500
↑ 6,000 7.26% Govt Stock 2032
Sovereign Bonds | -2% ₹355 Cr 34,500,000 7.1% Govt Stock 2034
Sovereign Bonds | -2% ₹281 Cr 27,500,000 Bajaj Housing Finance Limited
Debentures | -2% ₹252 Cr 25,000 National Bank for Agriculture and Rural Development
Domestic Bonds | -2% ₹252 Cr 25,000 Pipeline Infrastructure Private Limited
Debentures | -1% ₹225 Cr 22,000 Small Industries Development Bank Of India
Debentures | -1% ₹224 Cr 22,500 TVS Credit Services Limited
Debentures | -1% ₹203 Cr 200 4. Aditya Birla Sun Life Short Term Opportunities Fund
CAGR/Annualized return of 7.3% since its launch. Ranked 18 in Short term Bond category. Return for 2024 was 7.9% , 2023 was 6.9% and 2022 was 4.2% . Aditya Birla Sun Life Short Term Opportunities Fund
Growth Launch Date 9 May 03 NAV (08 Jan 25) ₹45.5946 ↓ -0.01 (-0.02 %) Net Assets (Cr) ₹8,804 on 15 Dec 24 Category Debt - Short term Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆ Risk Moderate Expense Ratio 1.06 Sharpe Ratio 1.84 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load 0-90 Days (0.5%),90 Days and above(NIL) Yield to Maturity 7.64% Effective Maturity 3 Years 10 Months 2 Days Modified Duration 2 Years 10 Months 6 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 19 ₹10,000 31 Dec 20 ₹11,106 31 Dec 21 ₹11,532 31 Dec 22 ₹12,015 31 Dec 23 ₹12,840 31 Dec 24 ₹13,859 Returns for Aditya Birla Sun Life Short Term Opportunities Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 8 Jan 25 Duration Returns 1 Month 0.5% 3 Month 1.7% 6 Month 4% 1 Year 8% 3 Year 6.4% 5 Year 6.7% 10 Year 15 Year Since launch 7.3% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.9% 2022 6.9% 2021 4.2% 2020 3.8% 2019 11.1% 2018 8.5% 2017 6.5% 2016 5.6% 2015 11.3% 2014 8.4% Fund Manager information for Aditya Birla Sun Life Short Term Opportunities Fund
Name Since Tenure Kaustubh Gupta 11 Sep 14 10.31 Yr. Mohit Sharma 6 Aug 20 4.41 Yr. Dhaval Joshi 21 Nov 22 2.11 Yr. Data below for Aditya Birla Sun Life Short Term Opportunities Fund as on 15 Dec 24
Asset Allocation
Asset Class Value Cash 5.32% Debt 94.45% Other 0.23% Debt Sector Allocation
Sector Value Corporate 54.65% Government 38.94% Cash Equivalent 4.51% Securitized 1.67% Credit Quality
Rating Value AA 12.31% AAA 87.69% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -12% ₹1,059 Cr 103,300,000
↓ -500,000 National Bank For Agriculture And Rural Development
Debentures | -5% ₹477 Cr 47,500 7.26% Govt Stock 2033
Sovereign Bonds | -4% ₹350 Cr 34,000,000 Small Industries Development Bank Of India
Debentures | -3% ₹236 Cr 23,500 7.1% Govt Stock 2034
Sovereign Bonds | -3% ₹234 Cr 22,906,400 Bajaj Housing Finance Limited
Debentures | -2% ₹202 Cr 20,000 National Bank For Agriculture And Rural Development
Debentures | -2% ₹200 Cr 20,000 Small Industries Development Bank Of India
Debentures | -2% ₹185 Cr 1,850 Embassy Office Parks Reit
Debentures | -2% ₹182 Cr 18,000 Bharti Telecom Limited
Debentures | -2% ₹151 Cr 15,000 5. UTI Short Term Income Fund
CAGR/Annualized return of 6.6% since its launch. Ranked 10 in Short term Bond category. Return for 2024 was 7.9% , 2023 was 6.9% and 2022 was 3.8% . UTI Short Term Income Fund
Growth Launch Date 19 Sep 07 NAV (08 Jan 25) ₹30.4244 ↓ 0.00 (-0.01 %) Net Assets (Cr) ₹2,640 on 30 Nov 24 Category Debt - Short term Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.94 Sharpe Ratio 1.7 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.53% Effective Maturity 3 Years 8 Months 5 Days Modified Duration 2 Years 9 Months 11 Days Growth of 10,000 investment over the years.
Date Value 31 Dec 19 ₹10,000 31 Dec 20 ₹11,048 31 Dec 21 ₹11,974 31 Dec 22 ₹12,426 31 Dec 23 ₹13,285 31 Dec 24 ₹14,334 Returns for UTI Short Term Income Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 8 Jan 25 Duration Returns 1 Month 0.4% 3 Month 1.6% 6 Month 3.9% 1 Year 7.8% 3 Year 6.2% 5 Year 7.4% 10 Year 15 Year Since launch 6.6% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.9% 2022 6.9% 2021 3.8% 2020 8.4% 2019 10.5% 2018 -3.9% 2017 6% 2016 6.1% 2015 10.1% 2014 8.3% Fund Manager information for UTI Short Term Income Fund
Name Since Tenure Sudhir Agarwal 25 Oct 12 12.19 Yr. Data below for UTI Short Term Income Fund as on 30 Nov 24
Asset Allocation
Asset Class Value Cash 16.46% Debt 83.27% Other 0.27% Debt Sector Allocation
Sector Value Corporate 69.48% Government 15.69% Cash Equivalent 14.56% Credit Quality
Rating Value AA 11.47% AAA 88.53% Top Securities Holdings / Portfolio
Name Holding Value Quantity National Housing Bank
Debentures | -8% ₹211 Cr 21,000 LIC Housing Finance Limited
Debentures | -7% ₹176 Cr 1,750 Small Industries Development Bank Of India
Debentures | -7% ₹176 Cr 17,500 National Bank For Agriculture And Rural Development
Debentures | -7% ₹176 Cr 17,500 Power Finance Corporation Ltd.
Debentures | -7% ₹175 Cr 17,500 Bajaj Finance Limited
Debentures | -4% ₹101 Cr 10,000 7.23% Govt Stock 2039
Sovereign Bonds | -3% ₹88 Cr 850,000,000 Kotak Mahindra Prime Limited
Debentures | -3% ₹75 Cr 750 Shriram Finance Limited
Debentures | -3% ₹70 Cr 7,000 Rec Limited
Debentures | -2% ₹60 Cr 6,000
Why Invest In Best Short Duration Debt Funds?
Given the short term nature of these investments, Short Duration (Short Term) Debt Funds do not offer very high returns like Equity Funds. However, there are certainly several reasons that ensure Investing in the best Short Duration (Short Term) Debt funds is totally worth to consider. Some of those include-
Short Duration (Short Term) debt funds are a highly suitable option for investors who are willing to make investments that have a slightly higher maturity than liquid & ultra short term debt funds but on the same hand are not very risky.
Being a short term investment, this fund is highly suitable for those who want to park their idle cash for 1-3 years to earn better returns than Fixed Income investment options like FDs.
As per the analysis, short term bond funds offer a better rate of return in accordance with the risk involved as compared to long term Bonds. Short Duration Funds are less sensitive to the rising Inflation than other intermediate and long term debt funds.
Lastly, the Short Duration (Short Term) debt funds are highly liquid, meaning that the investors can have an easy access to their cash. However, some schemes under this category do charge an exit load if the investment is redeemed in a very short duration (mostly 1 month to 6 months). So, it is always suggested to invest in best Short Duration Debt Funds wisely.
How to Invest in Short Duration Debt Funds Online?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
Conclusion
Investors can tweak their investment portfolios as per their risk profile. As the bond market offers the advantage of falling interest rates, one can earn better returns by increasing the duration o the investment. This is where Short Duration (Short Term) Debt Funds come in. These funds invest in debt market to offer long term returns over the duration of 2-3 years. So, invest in best Short Duration Funds today!
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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