Low Duration Mutual Funds

Low Duration Funds are a category of debt mutual funds that invest in fixed-income securities with relatively short maturities. As per SEBI guidelines, these funds maintain a portfolio duration between 6 and 12 months. Their short duration makes them less sensitive to interest rate fluctuations than long-term debt funds, offering a balanced mix of moderate returns and relatively low risk. Low-duration mutual funds are suitable for investors looking to park money for a short period—typically more than 3 months—while aiming for better returns than traditional savings accounts or fixed deposits.

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List of Low Duration Mutual Funds

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What is a Low Duration Mutual Fund?

A Low Duration Fund meaning is a category of debt mutual fund that primarily invests in instruments with a short maturity profile. As per SEBI classification, these funds maintain a Macaulay duration between 6 to 12 months.

The aim of this short-term mutual fund duration with low duration is to offer a balance between return and risk.
 

Popular Low Duration Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 580
  • 3Y Return
  • 8.11%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 22,934
  • 3Y Return
  • 8.06%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 12,913
  • 3Y Return
  • 7.91%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 21,198
  • 3Y Return
  • 7.89%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 13,528
  • 3Y Return
  • 7.77%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 6,600
  • 3Y Return
  • 7.67%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 7,663
  • 3Y Return
  • 7.67%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 624
  • 3Y Return
  • 7.67%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 247
  • 3Y Return
  • 7.64%

  • Min SIP Investment Amt
  • ₹ ₹ 99
  • AUM (Cr.)
  • ₹ 1,838
  • 3Y Return
  • 7.62%

FAQs

Low duration funds maintain a Macaulay duration between 6 to 12 months, keeping them less sensitive to interest rate changes.
 

Yes, most funds allow redemption anytime, but some may levy a nominal exit load if withdrawn within a few months.

Low-duration funds generally aim to deliver moderate returns, which can vary based on market conditions, interest rate movements, and the fund’s credit exposure.

SIPs are possible, but lump sum investments are generally more common for short-term goals in Low Duration Funds.

Low-duration funds may suit investors seeking higher returns and better liquidity than FDs, especially without lock-in periods. However, suitability depends on one’s risk appetite, investment horizon, and need for quick access to funds.

No, they are open-ended and can be redeemed anytime, although some funds may charge an exit load for very early withdrawals.

Yes, due to their short maturity profile, their NAVs are generally less affected by rising rates compared to long-duration funds.

Performance can be assessed by looking at historical returns, consistency over different market cycles, portfolio quality, credit risk exposure, and the fund’s ability to manage interest rate changes effectively.

These funds are best suited for short-term goals. Ideally, investors should have a minimum investment horizon of 3 to 12 months to benefit from their return potential with manageable risk.

Low duration funds are suitable when you have surplus funds that you want to park for a few months to a year. They can be useful during periods of interest rate uncertainty or as a step-up from liquid funds.

If you're looking for better returns than a savings account and are comfortable with moderate risk over a short investment horizon, Low Duration Funds can be a suitable option for part of your portfolio.

Low duration funds carry moderate risk. They are less volatile than long-term debt funds but may have some credit risk and limited interest rate risk, given their exposure to short-term securities.

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