Bandhan Low Duration Fund - Direct Plan
Bandhan Low Duration Fund - Direct Plan
An open ended low duration debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 6 months and 12 months. A scheme with relatively low interest rate risk and relatively low credit risk.
What is a Low Duration Fund?
Low duration debt funds are an open-ended investment scheme that invests primarily in debt and money market instruments for a Macaulay duration of 6 to 12 months. Due to their relatively short investment horizon, low duration funds are categorised as a relatively low-risk investment option. Moreover, they are a liquid investment option and have the potential to generate short-term returns.
Low duration debt funds and liquid funds are similar; they are both debt funds, classified as a low-risk investment option. However, the Macaulay duration of low duration mutual funds ranges from between 6 to 12 months, while liquid mutual funds mature in a maximum of 91 days.
Investors can choose between SIP or lumpsum modes of investment while investing in low duration funds. However, due to their short-investment horizon, they may be suited for lumpsum investment.
Low duration mutual funds are subject to STCG or LTCG, depending on how long the units are held for. For units held for less than three years, returns are taxed under Short-Term Capital Gains (STCG) as per the investors tax bracket. Units held for more than three years are subject to Long-Term Capital Gains (LTCG) at 20%.
- Min Investment 100
- Min SIP Amount 100
- Exit LoadNil (Since 29th June 2012)
Scheme is suitable as 'Core' debt allocation and is recommended for a minimum investment horizon of 6 months
Tier 1 Benchmark : NIFTY Low Duration Debt Index A-I (w.e.f. 1st April 2022)Alternate Benchmark : CRISIL 1 Year T-Bill Index
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Performance as on 28th March 2024
| Scheme Names | CAGR Returns (%) | Current value of Investment of 10,000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 year | 3 year | 5 year | 10 year | 17/01/2006 Since inception | 1 year | 3 year | 5 year | 10 year | 17/01/2006 Since inception | |
| Bandhan Low Duration Fund - Regular Plan - Growth | 7.20 | 5.19 | 5.87 | 7.00 | 7.15 | 10,722 | 11,645 | 13,303 | 19,686 | 35,179 |
| 7.48 | 5.36 | 5.83 | 6.93 | 7.61 | 10,744 | 11,691 | 13,279 | 19,542 | 38,027 | |
| 7.32 | 5.11 | 5.50 | 6.43 | 6.12 | 10,734 | 11,616 | 13,076 | 18,662 | 29,482 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Harshal Joshi (w.e.f 28/07/2021)
View fund performance of other funds managed by Mr. Harshal Joshi
Past performance may or may not be sustained in future.
Regular and Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
Taxation:
For taxation, please refer the link : https://bit.ly/3spfzbo
Bandhan Low Duration Fund
(Scheme Risk-o-meter)
NIFTY Low Duration Debt Index A-I (w.e.f. 1st April 2022)
(Tier 1 Benchmark Risk-o-meter)
This product is suitable for investors who are seeking* :
- To generate short term optimal returns with relative stability and high liquidity.
- Investments in debt and money market instruments such that the Macaulay duration of the portfolio is between 6 months- 12 months
Who Should Invest in Low Duration Debt Funds?
Low duration debt funds are categorised as a low-risk investment option that invest in debt and money market instruments, and may be suitable for investors with a low-risk appetite. Low duration funds are relatively less vulnerable to volatility and market fluctuations and they have the potential to offer reasonable returns in the short-term.
The investments have a Macaulay duration of 6 to 12 months. Low duration funds are suitable for investors seeking short-term and highly liquid investments. They may be suitable to build an emergency fund or for investors seeking liquidity in their investments.
Low duration debt funds are subject to taxes similar to debt funds. They may not be suitable for investors seeking tax-saving investments.
FAQs on Low Duration Debt Funds
What is a low duration fund?
Low duration mutual funds are an open-ended debt mutual fund scheme that invest primarily in debt and money market instruments for a Macaulay duration of 6 to 12 months. They may be suitable for investors with a low-risk appetite, seeking short-term and liquid investments.
Is a Low Duration Debt Fund taxable?
Low Duration Debt Funds are essentially a type of debt funds and are subject to taxation accordingly. Units of low duration funds held for less than 3 years may be subject to STCG as per the income tax slab of the investor. For units held over 3 years, LTCG tax at 20% is levied.
What are the advantages of Low Duration Funds?
Low Duration Debt Funds are a highly liquid and relatively low-risk investment option for investors seeking to invest for a short period of time. Investors may be able to potentially earn reasonable returns in the short-term. Low duration funds returns may be low, but may be relatively more favourable than letting money sit idle.
Are Low Duration Funds safe?
Low Duration Funds are classified as a low-risk investment option. As they invest in debt and money market securities for a relatively short duration, they are less vulnerable to market volatility and fluctuations and may provide investors with reasonable returns. However, all mutual funds are subject to risk; low duration debt funds may be vulnerable to credit risk, inflation risk and interest rate risk.
Who should invest in Low Duration Funds?
Low Duration Debt Funds are suitable for investors seeking short-term investments in debt and money market instruments. These funds are a low-risk and highly liquid investment option and may generate potentially reasonable returns. Investors seeking these characteristics may benefit from low duration mutual funds.
What are the disadvantages of Low Duration Debt Funds?
Low Duration Debt Funds are largely regarded as a low-risk and short-term investment option. However, all mutual funds are subject to some risks; low duration debt funds are subject to credit risk or the risk of default and interest rate risk due to their short holding period. Moreover, low duration debt funds are not a suitable instrument for wealth creation.