Indiabulls Liquid Fund is the go-to fund for many when looking to invest in liquid funds.
Liquid funds as you might already know, are a good alternative to keeping money in a savings bank account.
Indiabulls Liquid Funds has given an 8.7% per annum over the last 5 years which is incredibly high for any liquid fund. Read the full review here.
Investment Objective of Indiabulls Liquid Fund
To generate returns commensurate with low risk, the scheme would predominantly invest in money market instruments
|Absolute returns (%)||6.85||7.85|
Indiabulls Liquid Fund Review
The fund in the liquid category fund has consistently beaten its benchmark and category over multi-trailing time period generating 6.85% and 7.85% returns over the 1-year period. and 3-year period.
The fund seeks to invest in short-term debt instruments that are highly safe and helps an investor generate returns over short duration at low risk.
One of the best use of the fund is for cash management purpose.
The investors in a liquid fund seek to deploy their funds for a short period of time thus the portfolio is structured to incorporate high liquidity by the use of cash and cash equivalents.
This results in a high turnover for the fund. With around 65 holdings in the portfolio and 27% of the portfolio accounted by top 5 holdings, the fund is fairly diversified.
In terms of the creditworthiness of the underlying instruments, 80% of the portfolio is invested in corporate debt with A1+ short-term rating while the remainder is invested in government securities with sovereign rating.
This helps the portfolio generate very low risk as depicted in the standard deviation of 0.25% against the category average of 0.38%.
Within corporate sector, the majority around 60% of the portfolio is invested in instruments from issuers in financial services sector followed by sectors such as Energy and Chemical.
The fund manager and the team seek to carry out rigorous in-depth credit evaluation of the money market and debt instruments in which the scheme invests.
For credit assessment, the team deploys a bottom-up approach and assesses the operating environment of the issuer, past track record and future prospects of the issuer along with short-term and long-term financial health.
The scheme is ranked 1 in Liquid category by CRISIL for the quarter ended September 2017 and with the consistent performance, the fund has been rated five-star ratings by Morningstar.
Fund Manager: Indiabulls Liquid
Mr Malay Shah has been the Head of Fixed Income at Indiabulls Asset Management Company Limited since August 2014. Previously, he served as Head of Fixed Income and Fund Manager of Fixed Income at Peerless Funds Management Company Limited.
He was also a Senior Dealer in the Fixed Income group at Derivium Capital & Securities Pvt. Ltd and Parag Parikh Financial Advisory Services Limited. Shah has considerable experience in managing debt schemes such as liquid, ultra-short term, short term, income, dynamic bond, and fixed maturity plans. He received an M.M.S. in Finance from Narsee Monjee Institute of Management Studies in 2001 and also holds a B.Com degree.
Disclaimer: the views expressed here are those of the author. Mutual funds are subject to market risks. Please read the offer document carefully before investing.