Low returns and the recent change in tax rules had put a question mark on the utility of overnight, liquid and ultra-short duration categories. In this month's Category Compass, we dispel those doubts and reaffirm our faith in these funds for your short-term and emergency allocation needs. Returns back at 6 per cent The benefit of rising interest rates is reflected in these funds' performances rather quickly because these funds invest in very short-maturity bonds and money comes up for reinvestment (at high interest rates) at quick intervals. As a result, the one-year returns are already back at 6 per cent, putting them miles ahead of what you get from a savings bank account, their closest competitor. Looking ahead, the returns are likely to improve further, as indicated by their yield-to-maturities. The current return expectations (after fact
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How's my portfolio doing? What do I need to fix? Where should I invest next? Fund Advisor answers each one. The Advisor Note every Saturday. A live session with Dhirendra Kumar every second Saturday.
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