Franklin India Ultra Short Bond Fund

The Franklin India Ultra Short Bond Fund is a mutual fund investment scheme that seeks to fulfill the short-term financial goals of its investors by investing in a portfolio comprising of debt and money market instruments which have short-term maturity periods and are liquid in nature. This mutual fund investment is basically an open-ended income scheme falling under the ultra-short term debt funds category that employs a growth-oriented strategy and looks to generate high returns along with liquidity. The fund boasts of an enviable Morningstar Analyst Rating of Gold and is benchmarked against CRISIL Liquid Fund Index. The minimum investment amount for investing in this fund scheme is Rs.10000.

The primary objective of this fund is to generate a steady return, mostly generated from the accrual of interest income, with minimal NAV volatility. This scheme ranks amongst the top mutual funds in India and is currently ranked third in the ‘Ultra Short-Term Debt Funds’ category by CRISIL for the first quarter of 2017 ended in June which remains unchanged from the previous quarter. Launched on December 18, 2007, thus fund is co-managed by two of the best managers in the country; the dynamic duo of Sachin Padwal-Desai and Pallab Roy. Mr. Desai has been at the helm since inception while Mr. Roy joined soon after in June 2008. As a matter of fact, Mr. Roy has been a part of Franklin Templeton Investments since 2001.

This fund is specially designed to satisfy the current needs of investors and to fulfill their small and instant financial objectives. This fund has grown to be recognized as one of the best mutual funds in India especially in the fixed income investments category owing to how the team has managed to expertly control the credit risk. The five-member team headed by CIO Santosh Kamath focuses on buying low-rated scrips that have displayed improving or strong credit ratings. The team pins their hopes on the theory that as and when their credit rating improves, their prices as well as the NAV of short-term debts that have invested in them, would concurrently improve as well. The fund’s expense ratio is below the category median thus making it one of the least expensive funds in the category.

Owing to the immense experience backing the team, the team has successfully managed to dodge bullets in the past. Notably, in 2008, when the financial sector was battered, it stayed clear of risky real estate debt although it was recognized as a standard investment avenue back then. By adopting a contrarian approach and going against the prevailing wisdom of other investors, Mr. Desai and Mr. Roy have displayed technical nous which has helped the fund become an impressive performer on the return and risk-adjusted-return parameters. Yes, there’s an inherent possibility that taking such a calculated risk might also backfire but till date, the fund has just gone from strength to strength thanks to the team’s bottom-up approach and research-oriented investment philosophy. Having said that, it would be churlish to say that the team retracts from taking risks altogether as when the ideal opportunity presents itself, the team does weigh the pros and cons while undertaking considerable qualitative and quantitative analysis to gauge whether it’s worth investing or not.

If you are looking to create corpus in a short duration, why not invest in one of the top mutual funds in India where you get to park your cash for a period ranging from 1-9 months. For more details regarding this ultra short-term fund, you can approach our financial advisors for customised investment plans.