This short term duration fund has beaten inflation by a higher margin in 3 years: Check details
Other than bank fixed deposits, investors can consider parking corpus in low duration funds for better and inflation-beating returns.
As against the usual norm, wherein short-duration funds also known as low-duration funds can only beat inflation by a small margin, this fund from the house of Bank of India Mutual Fund has offered an annualised SIP return of over 11 per cent over the last years.
Here are the finer points for an investor points to note
What are short-duration funds?
For investors with a shorter investor horizon of up to 3 years and lower risk-appetite, short duration funds can offer a better return in contrast to traditional avenues like bank savings account. These funds invest in securities including certificates of deposit (CDs), short-term government as well as corporate bonds.
Bank of India Short Term Income Fund-Direct Plan-Growth
The fund has beaten inflation by a wide margin and its SIP annualised return has been 11.31 per cent in the last 3 years. The fund has a 5-star rating from CRISIL.The scheme’s performance is benchmarked against CRISIL Short Duration Debt A-II Index.
Fund’s portfolio
The fund has an over 89 per cent capital allocation in debt, with over 37 per cent put in G-securities and over 52 per cent in low-risk securities.
SIP and lump-sum investment
For kickstarting SIP in the fund, you would need to shell-out just Rs 1,000, while for a lump-sum investment, you need to put in Rs 5,000.
Fund’s SIP returns
The fund’s trailing return over a 5-year, 3-year and 1-year period are 10.19 per cent, 11.29 per cent and 7.23 per cent, respectively. Over a 3-year period, monthly SIP of Rs 10,000 has turned into Rs 4,26,409.