Instead of blocking your cash in the savings bank account, why not put it where it fetches higher returns? Well, here we are talking about the liquid fund as it is only suitable option. The risk level is minimum as compared to other options but not completely absent. So, here’s an insight to make most of a liquid fund.
What Are Liquid Funds?
It comes under the debt mutual fund scheme. “Liquid funds are that type of mutual funds which invest in securities with low residual maturity of up to 91 days as compared to other funds. Assets invested in it are not tied up for a long time as liquid funds do not have a lock-in period.” An investor can invest in liquid funds when he has excess of cash and is in the thought that might be he will need it in the near future or in coming few days/weeks.
Let's have a look at some of the top performing liquid funds, which is helpful for an investor in growing the money faster.
Reliance Low Duration Fund
It is an open-ended low duration debt scheme making the investment in debt and money market instruments such that the Macaulay duration of the portfolio is between 6 - 12 months. The scheme aims to generate optimum and consistent returns with moderate levels of risk and liquidity by investing in debt securities and money market securities. Till date (26 June 2018), the net assets of the fund are 5,72,886.31 lakhs.
Annualized Returns (%)
Fund Manager - Mr. Amit Tripathi is the fund manager of this fund. He has pursued his MBA degree in finance from Fore School of Management and has done his bachelor’s of commerce from B.J.B college, Bhubaneshwar. He has specialization in asset management and has been with Reliance Mutual Fund from past 12 years.
Kotak Money Market Scheme
It is an open-ended debt scheme investing in the money market instruments. The investment objective of the Scheme is to generate returns by investing in money market instruments having maturity up to 1 year. Total AUM of the scheme is Rs.8396.18 Cr. The fund was launched on August 13, 2004, and its benchmark is Nifty Money Market Index. The risk of investing in the fund is moderately low.
Annualized Returns in %
Aditya Birla Sun Life Liquid Fund
It is an open-ended scheme with the aim to provide reasonable returns with the safety at first priority and providing the liquidity through judicious investment in the high-quality debt and money market instruments. The performance of the scheme was outstanding in the past years, i.e., in 2012 it was 9.71%, in 2013 the fund has returned 9.32% returns, and continuously it has delivered the growing returns every year. The fund is most suitable for the investors who are seeking the investment that offers reasonable returns, with a good level of safety and convenience.
Fund manager- Mr. Kaustubh Gupta is the fund manager of Aditya Birla Sun Life Liquid Fund. He carries the total experience of 9 years. Prior to joining ABSLAMC, he has worked for ICICI Bank Treasury.
What’s So Special About Investing in Liquid Funds?
Till now, if an investor takes the money out of liquid funds, he will get the money in 1 day. Soon, liquid funds will give him the money in a matter of minutes, with the help of developed technology. Some ultra short-term funds have been offering this facility, but SEBI recently ordered that only liquid funds can offer this facility and not any ultra short-term funds. SEBI has capped this limit to Rs 50,000 a day or 90% of your folio's value, whichever is lower. An investor will not be able to avail this advantage by investing in any other options.
The article is all about Liquid Funds which is apt to invest the unused or excess money and get high returns from it, instead of depositing in the savings account that blocks your money and decreases the pace of growth of your money.