IDFC Short Term Bond Fund

The IDFC Short Term Bond Fund invests in bonds that mature in less than five years. As a result, these investments carry relatively low risk as compared to intermediate or long term bonds. Since they are less risky, the returns are low.

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Fund in Brief

The IDFC Short Term Bond Fund is an open-ended short-duration debt scheme that invests in securities that render returns within a short time. The IDFC Short Term Bond Fund invests in short term debts and money market securities that mature in a short period. The fund aims at generating returns within 1 to 3 years.

In addition, the fund seeks to spend the investor’s money in a diversified set of debt and money market securities. The value of the units is Rs.10 per unit, and the Asset Management Company calculates the NAV on all Business Days. IDFC Mutual Fund manages IDFC Short Term Bond Fund.

IDFC Short Term Bond Fund Facts

Fund House

IDFC Mutual Fund

Fund Type

Open-ended

Expense Ratio

0.77% as of July 31st, 2021

Launch Date

December 14th, 2000

Return since launch

7.61%

AUM

Rs 13,511 crores as of July 31st, 2021

Benchmark 

The Nifty AAA Short Duration Bond

Risk Grade

Average 

Return Grade

Above Average

Risk Profile

Low to Moderately risky

Investment Objective

The IDFC Short Term Bond Fund scheme aims to invest in a mixture of money market and debt securities to generate maximum returns over the short term, so the tenure of the investment is anywhere between 1 - 3 years. The fund has 98.2% investment in debt, out of which 28.18% is in Government Securities, and 70.02% is in funds invested in very low-risk securities.

To achieve their objective, the IDFC Short Term Bond Fund offers two different plans: regular plan and direct plan. Although the fund offers low returns, they are comparatively higher than those produced by money market funds.

Fund Summary

The IDFC Short Term Bond Fund has two plans for its investors to choose from. These are designed to support the investor’s suitability.

  1. IDFC Short Term Bond Fund Regular Plan

    • Risk: Low to Moderate
    • Expense Ratio: 0.77%
    • Net Asset Value (NAV): Rs 45.73 (as of September 3rd, 2021)
    • Returns (1 year): 4.57%
    • CAGR (since inception): 7.61%
  2. IDFC Short Term Bond Fund Direct Plan

    • Risk: Low to Moderate
    • Expense Ratio: 0.29%
    • Net Asset Value (NAV): Rs 48.08 (as of September 3rd, 2021)
    • Returns (1 year): 5.10%
    • CAGR (since inception): 8.56%

Fund Return Summary

Returns Produced by the IDFC Short Term Bond Fund

IDFC Short Term Bond Fund Schemes

Returns

1 year

3 years

5 years

Since Inception

IDFC Short Term Bond Fund Regular Plan-Growth

4.36%

8.25%

7.37%

7.61%

NIFTY AAA Short Duration Bond Index (Benchmark)

5.59%

9.12%

8.04%

N. A.

CRISIL 10 Year Gilt Index (Alternate Benchmark)

2.24%

8.71%

6.51%

N. A.

*Returns are subject to change.

*The investment risk in the investment portfolio is borne by the policyholder.

The data given in the table above rests on the following conditions:

  • Fund managed by Mr Suyash Choudhary.
  • The performance shown above does not necessarily forecast the fund’s performance in the future.
  • The expense structures of the regular and direct plans are different. The direct plan would include distribution and commission expenses, lowering the Expense Ratio.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Pros and Cons

Here is a summary table representing the pros and cons of the IDFC Short Term Bond Fund:

Pros 

Cons

Low Expense Ratio

1-month returns are lower than the category average returns.

3-year returns are higher than the category average returns.

3-month returns are lower than the category average returns.

5-year returns are higher than the category average returns.

6-month returns are lower than the category average returns.

Entry Load is zero.

1-year returns are lower than the category average returns.

Benefits of the IDFC Short Term Bond Fund

There are many benefits of investing in the IDFC Short Term Bond Fund. Some of them are as follows:

  • Stable returns: The IDFC Short Term Bond Fund scheme produces stable and secure returns over short durations. It makes the investment safe and reliable. Most people look forward to pooling their savings into short-term debts to earn money quickly.
  • Short-term objective: People who have short-term investment goals go for IDFC Short Term Bond Fund. It focuses on short term returns, hence helping customers achieve their interim goals.
  • Zero entry and exit load: The IDFC Short Term Bond Fund does not charge entry and exit load. Therefore, it minimizes the additional expenditure of the investor.
  • Risk profile: IDFC Short Term Bond Fund scheme is moderately risky, which means that the chances of losing the funds are relatively moderate than other funds. It makes the investors more confident, and the fund does not lose its dependability.
  • Less sensitive: As it is a short term bond fund, IDFC Short Term Bond Fund is less sensitive towards changes such as inflation. Long term bond funds are more affected by inflation and other market changes.

Fund House Details

The IDFC Mutual Fund House manages the IDFC Short Term Bond Fund. It is one of India’s largest fund houses, ranked amongst the top ten fund houses in the country. The fund house has assets worth Rs 10 lac crore. 

The IDFC Mutual Fund House is promoted by IDFC Limited, a well-known infrastructure finance company constituted by the Government of India. 

The primary objective of the fund house is being a focused investment organization and creating long-term value. Through its active mix of schemes across different areas, the fund house has carved a niche for itself in the market. 

In addition, the house works towards becoming transparent and reliable through delivering results consistently. It has thus, in its history, lived up to the expectations of its investors.

Who should invest in the IDFC Short Term Bond Fund?

If you fall under the following conditions, then you must opt for IDFC Short Term Bond Fund:

  • If you have surplus finances and are looking to pool them together to gain quick returns, then IDFC Short Term Bond Fund could provide you with suitable investment options.
  • If short-term investment goals are your preference, IDFC Short Term Bond Fund is an ideal investment option.
  • If you want to invest in the money market but are apprehensive about suffering monetary losses, opt for the IDFC Short Term Bond Fund. It focuses on a moderately risky market and Government securities, follows strategic risk mitigation, and minimizes the chances of losing capital.
  • If you want easy access to your invested sum, IDFC Short Term Bond Fund will provide high liquidity to your investment. Moreover, as it is a short term fund, your money won’t be locked away for long.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

In Conclusion

The IDFC Short Term Bond Fund is an open-ended, low to moderately risky short term debt fund. It is managed by IDFC Mutual Fund and aims at generating secured returns over a short period. The fund carefully analyzes market fluctuation before investing in money market instruments and Government securities. 

Furthermore, the investments are strategically planned to produce maximum returns in a short amount of time.

Through its long history of reliable and constant return production, the IDFC Short Term Bond Fund has become one of the most preferred options for people to invest in.

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