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Best Mutual Funds for Short Term Investments 2022

08 June 2022

Mutual funds are investments that allow you to pool your money with the money of other investors, and place it in a diversified portfolio of assets. This can include stocks or bonds, but also real estate, commodities, or even currencies.

The goal is to provide investors with a way to earn returns without having to invest in individual stocks and bonds—and without having to worry about losing money if one investment goes sour.

The downside is that while you don't have to worry about losing money on individual investments, you also don't have any control over which ones your mutual fund company chooses. This means that if there's a stock bubble bursting or a commodity crash, it can hurt you too—you'll just feel it less acutely than someone who invested directly in those areas.

Mutual funds for short-term investments are designed to provide investors with an easy way to invest in the stock market without having to spend time selecting individual stocks or bonds. The fund manager will select these securities based on the fund's objective and risk tolerance.

Short-term mutual funds typically hold stocks with an average holding period of one year or less. They generally have low turnover rates, which means they don’t buy and sell securities too frequently.

This strategy allows them to minimize transaction costs while generating higher returns than longer-term funds because they don’t have as much invested in illiquid assets like real estate or private equity investments which take more time to sell off when the market goes down (and vice versa).

Best Mutual Funds In India For Short Term

Short-term investments in India are a great option for those who want to invest their money and expect to receive it back within a period of three years.

Liquid funds are one of the most popular short-term investment options in India. Liquid funds invest in debt instruments such as government bonds, corporate bonds, and commercial papers. They offer high liquidity, low risk, and relatively high returns compared to other short-term investment options.

Ultra Short Term Funds invest in similar types of instruments, but they can be held for less than 90 days.

The best short term mutual funds india invest in debt instruments with an average maturity of less than one year. They are not as liquid as liquid funds and have a higher risk, but they do offer slightly higher returns than ultra short-term funds.

  • Liquid Funds

Liquid funds are a popular investment vehicle that offers liquidity. Liquid funds are especially popular with investors who want to park their money for short periods. Liquid funds are also called money market mutual funds. Liquid funds have a low-risk profile and they invest in short-term debt securities such as government bonds, commercial paper, certificates of deposits (CDs), treasury bills, and bank deposits.

The average maturity period for liquid fund investments is one year or less. Investors can typically redeem their shares on a daily basis, which makes liquid funds an ideal investment choice for those who want to park their money for short periods of time without having to worry about being locked into long-term investments or losing out on potential gains from market volatility.

The best liquid funds will also have low fees, as well as a diverse range of underlying assets so that they can weather economic downturns better than others would be able to do so alone (for example, if one sector experiences poor performance then others might still be doing well).

Top Liquid Funds 2022

Here is a list of top liquid funds that you may invest in-

S.No.

Fund Name

1.

UTI - Liquid Cash Plan- Discontinued - Regular Plan-Growth

2.

Aditya Birla Sun Life Money Manager Fund - Direct Plan-Growth

3.

Quant Liquid Plan-Growth

4.

Aditya Birla Sun Life Money Manager Fund

5.

Taurus Liquid Fund Growth

6.

Sahara Liquid Fund Variable Pricing Direct-Growth option

  • Ultra Short Funds 2022

Ultra short-term funds are investment products that offer a higher return with a lower risk than regular fixed deposits. They are suitable for investors who want to earn more without taking on more risk, and they can be especially appealing to those who have shorter time horizons for their investments.

These funds tend to be more volatile than other types of mutual fund schemes because they hold riskier securities. However, they also provide higher returns than other types of mutual funds, which makes them extremely popular with investors who are willing to take on some risk for potential gains.

There are many different types of Ultra Short Term Funds 2022 India available today, including money market funds and short-term bond funds. Some of these types offer higher interest rates than others and some even have lower risks associated with them depending on what type of investment you're looking for in your portfolio.

Top Ultra Short Funds 2022

Here is a list of top ultra short funds that you may invest in-

S.No.

Fund Name

1.

Quant Active Fund Growth

2.

Mahindra Manulife Multi-Cap Badhat Yojana Regular Plan-Growth

3.

ICICI Prudential Smallcap Fund - Direct Plan-Growth

4.

ICICI Prudential Smallcap Fund

5.

Baroda Multi-Cap Fund Plan A Growth


Best Mutual Funds to Invest in 2022 India for Short Term    

Short Term Funds have become the most preferred option for investors, as they offer a lot of benefits and are relatively easy to manage. These funds are ideal for those who need to invest money for short-term goals or want to keep their money liquid.

The markets have been seeing a lot of volatility and uncertainty over the last few months, which is why it's important to choose your investments carefully. If you're looking for a way to invest that will be safe but still allow you to make money quickly, then short-term mutual funds are a great option.

Here is a list of the best short-term mutual funds in India that you can invest in for the next year.

Top Short Term Funds 2022

Here is a list of top short term funds that you may invest in-

S.No.

Fund Name

1.

Franklin India Short Term Income Plan - Direct Plan-Growth

2.

Edelweiss Banking and PSU Debt Fund - Direct Plan-Growth

3.

Nippon India Short Term Fund - Growth

4.

IDFC Bond Fund - Short Term Plan Regular Plan-Growth

5.

Edelweiss Banking and PSU Debt Fund

Factors to Consider Before Making a Short Term Investment 

There are several factors to consider before making a short-term investment and deciding the best mutual fund for 6 months or less to invest in India.

  • Return on Investment (ROI)

The return on investment you can expect from your short-term investment is a key factor to consider. It will be important to understand how much money you can expect to make from the investment and how quickly that money could be returned. This is especially important if other factors could delay your return, such as the need for approvals or delays in construction.

  • Risk Tolerance

An important aspect of any short-term investment is risk tolerance. If you have a high level of risk tolerance, then you may be able to accept less return on your investment than someone with a lower level of risk tolerance would require. However, even those with lower levels of risk tolerance should be able to find opportunities that provide some return on their investment without exposing them too much to risk.

  • Investment Period

For any investment to be successful, it must have an end date and a plan for what happens once that date arrives. This means that even if an investor has no plans to sell their asset after their initial purchase, they should still set an expected timeframe within which they will sell or close out their position to get the best returns.

  • Liquidity

The first factor to consider before making a short-term investment in India is liquidity. This refers to how easy it is to get your money out of the investment without losing too much value. If you're planning on getting out of your investments quickly, then you'll want to make sure that there are plenty of buyers for your shares and that the process of selling them doesn't take too long or cost too much money.

  • Taxation

Taxes can be a big factor when making an investment decision. You need to know how much tax will be taken out of the profits from your investment before deciding if it is worth the risk of losing money on an investment with low returns.

  • Inflation Rate

Inflation rates can change over time and affect the value of your assets and currency. You need to make sure that inflation isn't going to eat away at your profits before deciding if an asset is worth buying or selling at any given time during its lifecycle.

In case you just want to invest some idle money for emergency usage and not for a known requirement, mutual funds have products for this as well. All you need to do is to study your investment requirements. 

There can be variations within the short-term category as well. There are short-term mutual funds for 6 months and 2-3 years as well. There can be different kinds of short-term investments with varying risk types. Therefore, this can never be over-stated but understanding your investor profile and risk appetite is the key to making the right investments.

Top Funds: Performance Overview

1) Aditya Birla Sun Life Money Manager Fund - Direct Plan-Growth

Aditya Birla Sun Life Money Manager Fund Direct-Growth is a Debt Mutual Fund Scheme launched by Aditya Birla Sun Life Mutual Fund. This scheme was made available to investors on 23 Dec 1994. The scheme seeks to generate regular income through investment in a portfolio comprising of money market instruments.

2) Sahara Liquid Fund Variable Pricing Direct-Growth option

Sahara Liquid Variable Pricing Option Growth is a Debt Mutual Fund Scheme launched by Sahara Mutual Fund. This scheme was made available to investors on 18 Jul 1996. The scheme aims to provide high liquidity and reasonable returns through a highly liquid portfolio of good quality debt as well as money market instruments.

3) Quant Active Fund Growth

Quant Active Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Quant Mutual Fund. This scheme was made available to investors on 15 Apr 1996. The scheme aims at providing long-term capital appreciation and generate income with a diversified portfolio of Large Cap, Mid Cap, and Small Cap companies. 

4) Franklin India Short Term Income Plan - Direct Plan-Growth

Franklin India Short-term Income Plan Direct-Growth is a Debt Mutual Fund Scheme launched by Franklin Templeton Mutual Fund. This scheme was made available to investors on 19 Feb 1996. The fund currently has an Asset Under Management(AUM) of ₹65,417 Cr and the Latest NAV as of 07 Jun 2022 is ₹4,688.19.

5) Edelweiss Banking and PSU Debt Fund - Direct Plan-Growth

Edelweiss Banking and PSU Debt Fund Direct-Growth is a Debt Mutual Fund Scheme launched by Edelweiss Mutual Fund. This scheme was made available to investors on 30 Apr 2008. The fund currently has an Asset Under Management(AUM) of ₹78,128 Cr and the Latest NAV as of 07 Jun 2022 is ₹20.02.

The Scheme seeks to generate income by investing predominantly in a portfolio of Debt Securities and Money Market Instruments issued by banks, PSUs, Public Financial Institutions, entities majorly owned by Central and State Governments, and Municipal Bonds.

Conclusion

Are you looking for a short-term investment? If yes, then mutual funds are the best option for you. Mutual funds offer instant diversification to investors and also provide the convenience of investing small amounts on regular basis. This list of the best mutual fund to invest for short term, may be of a little help to you while investing.

A lot of people think that investing in a mutual fund is risky because they don’t understand how it works properly. But if you look at it carefully then you will find out that investing in a mutual fund is not only easy but also safe if done the right way.

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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