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Short-term debt funds top the debt fund category, giving highest returns

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Capital Market
Last Updated : Apr 29 2014 | 12:04 AM IST

CRISIL MF Rankings for the March quarter show Birla Sun Life and UTI MF top the list

Higher interest rates during past three years have helped short term debt funds generate good returns for the investors. This category has recorded highest returns among debt funds, according to the CRISIL - AMFI MF Performance Indices.

The short term debt schemes follow accrual investment strategy, which has helped the schemes to deliver highest returns. On the other hand, long-term debt funds suffered from mark-to-market losses. During the past three years, the one-year certificate of deposit yielded 9.37 per cent, pushing up short term debt funds returns. On the other hand, yields on 10-year government security increased from 7.98 per cent to 8.80 per cent, peaking at 9.23 per cent on 09 December 2013.

Looking at the CRISIL - AMFI MF Performance Indices, there are four debt fund indices- CRISIL-AMFI Short-Term Debt Fund Performance Index, CRISIL-AMFI Money Market Fund Performance Index, CRISIL-AMFI Income Fund Performance Index and CRISIL-AMFI Gilt Fund Performance Index.

In the three-year period, returns from short-term debt fund categories increased by 1.5 per cent at 3.1 per cent, with money market funds giving the highest returns.

According to the latest CRISIL Ranking of funds under all categories, Birla Sun Life Mutual Fund and UTI Mutual Fund topped the list by having seven funds under CRISIL Fund Rank 1, followed by ICICI Prudential Mutual Fund with six and SBI Mutual Fund with five for the March quarter.

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First Published: Apr 28 2014 | 4:02 PM IST

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