ICICI Prudential Liquid Fund

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ICICI Prudential Liquid Fund is an open-ended mutual fund investment scheme which seeks to generate reasonable returns from low-risk investments which provide a high level of liquidity. In this scheme, nearly 80 per cent of the corpus would be invested in money market securities, while the balance would be invested in high-quality debt instruments. This mutual fund is ideal for investors looking for returns better than a fixed deposit or savings bank account without compromising on the liquidity. It can also be used to park your emergency funds for a short period of time. The minimum initial investment amount for investing in this fund scheme is Rs. 5000.

Launched in November 2005, this fund remains one of the best investment options today and holds the distinction of being ranked third in the Liquid category by CRISIL for the quarter ended June 2017. Thus this fund has successfully managed to hold on to the same rank as in the previous quarter. This mutual fund investment scheme has been under the management of seasoned manager, Rahul Goswami who took over as manager in September 2012, and veteran manager, Rohan Maru who came aboard the team in September 2013. Mr. Goswami has previously worked with UTI Bank Ltd. and Franklin Templeton Asset Management Pvt. Ltd while Mr. Maru has worked with Kotak Mahindra AMC as Fixed Income Dealer and Integreon Managed Solutions as a Research Associate. These two also co-manage another ICICI offering, ICICI Prudential Flexible Income Plan.

With a corroborated investment methodology along with a proficient and experienced team, it ranks amongst the best mutual funds in India as it enables efficient and fruitful deployment of idle cash. Further, this fund offers a low-risk option to invest in mutual funds and is ideal for investors looking to save for short-term goals such as saving for an impending vacation or for fulfilling short-term obligations. It also provides an ideal alternative for individuals who prefer funds with lesser volatility and want a regular income along with the flexibility of withdrawing any time at just a day’s notice. Additionally, the redemption proceeds are also usually credited to the investors’ bank account in just a day’s notice without any exit loads as well. The returns from this fund don’t vary much as the fund management teams look to invest in similar underlying securities. Thus, this fund ranks amongst the best investment options for the short term during a high inflation environment. The lower expense ratio, in addition, makes this fund an attractively priced proposition.

The NAV of this mutual fund investment is computed for 365 days, unlike other debt mutual funds where NAV is computed for business days only. This means that your investments generate returns for every single day of investment. Additionally, for taxation purposes, investment in this fund is treated like other debt funds. This basically entails that, if you hold the fund for less than 3 years, then it is considered as Short Term Capital Gain (STCG). However, if you are holding for more than 3 years your gains will qualify for Long Term Capital Gain (LTCG) with indexation benefit on your original investment. There’s also the added benefit of no entry and exit loads which basically means all the money that you invest will be used to buy mutual fund investment without any additional deductions.

Individuals looking for quick returns with superior liquidity on the best performing mutual funds can choose to invest in this scheme as the fund management team tends to invest in short-term securities perfect for fulfilling short-term goals. Instead of parking your cash in a fixed deposit, why not put it where it fetches higher returns. Get in touch with our financial advisors for tailor-made investment plans.