Let ABSL Money Manager Fund manage your clients short-term cash needs

As MFDs, you do not want idle cash sitting in your clients’ accounts, even for a few weeks, as this is an opportunity lost. But at the same time, you have to ensure that when you park client’s money for a short period, the products must offer reasonable returns while maintaining low volatility and high liquidity. 

Keeping these aspects in mind, one of the best investment avenues is Aditya Birla Sun Life Money Manager Fund. The fund is a low risk avenue as it invests in high quality debt instruments such as Certificate of Deposits (CDs), Commercial Papers (CPs), Treasury Bills (TBills) and Tri Party Repo. Because of this, the fund carries lower credit risk, lower interest rate risk and lower concentration risk.

Further, given the current economic scenario, a money market fund seems to be a prudent investment option. The current rate cut cycle makes a case for lower yields at the short end of the curve. This could in return optimize the fund’s return potential. Further, with mounting concerns around credit in the market, it seems prudent to bet in safer assets like CPs and CDs that offer reasonable payoff.

Performance

Owing to its low maturity profile, this fund is comparable to the 1-year traditional savings instruments. It has delivered better returns as against the money market fund category as well as 1-year traditional savings instruments.

With majority of exposure to low risk debt securities, this fund has managed to deliver CAGR of 7.48% in the last one year as against its benchmark CAGR of 6.71%. In fact, the fund has consistently outperformed its benchmark over 3 years and 5 years period with a handsome margin. 

Whom is it suitable for

You can recommend it to clients who want to park their idle fund for near-term savings such as monthly expenditure requirements. For instance, small business owners may consider parking a day's collection in this fund before it is further invested or utilised in business. Overall, the fund is suitable for investors having low risk appetite and a short-term investment horizon of up to 3 months.