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Riding Out Interest Rates

Ultra short-term debt funds have emerged as the preferred vehicle to ride out rising interest rates…

I need to know which fund to invest in from the ultra short category.
Hemendra Gaur

‘Debt: Ultra Short Term’ refers to the category of funds whose average maturity over the last six months is less than one year and they are not liquid funds. This category of fund has emerged as the preferred vehicle for investors to ride out rising interest rates as these funds focus on very short-term instruments in the fixed-income space. They provide investors better protection against interest rate risk than longer-term bond investments. As these funds have very low durations, increases in the rate of interest will have a lesser impact on their value compared to medium- or long-term bond funds. You can consider investing in JM Money Manager Regular, Tata Floater or BSL Floating Rate LT Retail, which are all highly rated in the category.



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