Invest In Axis Ultra Short Duration Fund To Target Life's Immediate Goals

Financial goals may vary from person to person. Some may wish to build a commendable retirement corpus. Some may want to achieve immediate goals. Financial goals are usually categorized as short, medium, and long term goals. These goals can be targeted by building a diversified investment portfolio. To achieve capital appreciation investors may have to inculcate the discipline of systematic and regular investing. Apart from this, it is important to choose an investment scheme that aligns with the investor’s risk appetite, investment objective, and investment horizon.

To achieve life’s short term goals, investors may consider investing in ultra short duration funds. These are debt schemes that invest in fixed income securities with a short maturity duration.

What is an ultra short Duration fund?

Debt mutual funds invest in money market instruments other than equity for income generation. Ultra short duration funds are one such type of debt schemes that invest in debt instruments such that the Macaulay duration of the portfolio is between 3 months and 6 months.

How do ultra short Duration funds work?

As per SEBI guidelines, an ultra short duration fund must invest only in debt instruments with a maturity period of 3 to 6 months. These are different from liquid funds which invest only in securities with a maturity duration not exceeding 91 days. This gives the ultra short duration fund manager a leeway to invest in securities that mature before and after 91 days. Ultra short duration funds can be used to park surplus sums for the short term, or one can invest in them via a Systematic Investment Plan.

Axis Ultra Short Duration Fund

Axis Ultra Short Duration Funds is an open-ended ultrashort term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3 months and 6 months. The investment objective of Axis Ultra Short Duration Fund is to generate regular income and capital appreciation by investing in a portfolio of short term debt and money market instruments with relatively lower interest rate risk such that Macaulay duration of the portfolio is between 3 months and 6 months

Benefits of Axis Ultra Short Duration Fund

• Elevated short term spreads offer historically higher yields in the front end of the curve. The fund aims for a low duration with low volatility and relatively higher carry over of 3-6 month period
• The fund aims for higher yield with significantly lower risk
• The scheme attempts to offer better risk reward opportunity over other traditional alternatives in short term space
• Efficient cash management vehicle with limited impact from interest rate changes (due to low duration risk)
• Suitable to park money for the short term (3-6 months)
• This fund can be invested in a Systematic Transfer Plan in equity funds

Liquidity offered by Axis Ultra Short Duration Fund

The Scheme offers Units for Subscription and Redemption at NAV based prices on all Business Days on an ongoing basis. Under normal circumstances, the AMC shall dispatch the redemption proceeds within 10 business days from the date of receipt of request from the Unit holder.

Direct/Regular plan

Plans available under the scheme:

Axis Ultra Short Duration Fund - Regular Plan

Regular Plan is available for investors who purchase/ subscribe Units in a scheme through a Distributor.

Axis Ultra Short Duration Fund - Direct Plan

Direct Plan is only for investors who purchase/subscribe Units in a Scheme directly with the Fund and is not available for investors who route their investments through a Distributor.

What is Macaulay duration?

Macaulay duration is a measure of a bond's sensitivity to interest rate changes. It is a measure of the average life of the bond taking into account the coupon payments as well as the repayment of principal. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. Because it takes into account both coupons and maturity cash flows, it lucidly reflects the relationship between interest rates and the price of the bond.

Investors who wish to invest in Axis Ultra Short Duration Fund systematically can opt for a monthly SIP plan. A Systematic Investment Plan (SIP) is a simple and convenient way to ensure that investors save and invest a fixed sum at regular intervals (typically every month). The minimum SIP investment sum is Rs. 1000/- and in multiples of Re. 1/- thereafter. There is no upper limit for SIPs and investors can set the monthly SIP sum according to their risk appetite and investment objective.

Before investing in a mutual fund scheme, retail investors are advised to seek professional consultation.

Axis Ultra Short Duration Fund

An open ended ultra-short term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 3 months and 6 months

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.