VR Logo

Prudential ICICI Liquid Plan

An actively managed short-term debt fund, Prudential-ICICI Liquid Fund could be your alternative to short-term bank deposits. For despite its massive size its continues to perform

An actively managed short-term debt fund, Prudential-ICICI Liquid Fund could be your alternative to short-term bank deposits. The fund offers cheque writing facility on investments beyond five days and redemption is honoured within one business day. It however, levies an exit load of 0.25% for redemption within 5 days of investment.

With its charter to manage short-term liquidity, the fund invests at the lower end of the maturity spectrum and stays largely insulated from interest rate risks. The average portfolio maturity has seldom gone beyond 2 months. Thus, it has emerged as a safe bet for parking of short-term surpluses. Its steadily growing corpus has been spread across AAA quality investments in commercial papers, corporate bonds with residual maturity and money market. Within these instruments, the fund churns the portfolio to realign maturity in line with interest rates. For instance, the fund buys into corporate bonds with residual maturity in times of soft interest rates while selling them when markets turn bearish, as happened in mid-2000.

Despite a massive corpus at Rs 942 crore and a conservative stance towards portfolio maturity, the fund continues to outperform its category with a return of 9.8% in 2000. Consider this steady avenue for parking your short-term money.