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An analysis of 1-year performance of short-term debt funds done by Team Cafemutual shows that majority of short-term debt funds having maturity of less than a year have not beaten t their respective benchmarks in 1-year period ending on June 2023.
In fact, not a single fund in categories like overnight, liquid and ultrashort term funds has managed to beat its respective benchmark.
Only handful of funds in other short-term categories like low duration fund, money market fund and short duration have outperformed their respective benchmarks that too by small margin except one fund.
Let’s look at the performance of short-term debt funds based on their 1 year returns as on June 2023:
Overnight funds
While not a single fund has managed to beat benchmark, the underperformance range is marginal at less than 50 bps. Bank of India Overnight Fund and Axis Overnight Fund have performed better than peers in this category.
Liquid funds
The underperformance ranges between -0.05 % and - 0.63%. Funds with least underperformance are Canara Robeco Liquid Fund and UTI Liquid Cash Fund.
Ultra-short funds
The underperformance range is very wide in this category i.e., between 0.28% and 2.01%. Two funds Baroda BNP Paribas Ultra Short Duration Fund and Bandhan Ultra Short-Term Fund have done well compared to peers with marginal underperformance of -0.28% and -0.37%, respectively.
Low duration funds
Only 1 out of 21 low duration funds has outperformed its benchmark. ICICI Prudential Savings Fund has outperformed its benchmark by 0.54%. The maximum underperformance in this category was -1.31%.
Money market funds
Aditya Birla Sun Life Money Manager Fund and UTI Money Market Fund have beaten their respective benchmarks with an outperformance of 0.09% and 0.06%, respectively. Rest of the 20 money market funds have underperformed their benchmark, which ranges between -0.02% and -1.23%.
Short duration funds
Of the 24 schemes in this category, 2 funds have managed to beat their benchmark. Bank of India Short Term Income Fund and ICICI Prudential Short-Term Fund are the outperformers with an alpha of 5.52% and 0.35%, respectively.
Click here to see complete list of debt funds with 1 year performance. Outperformers are marked in yellow.
