Kotak Short Term Fund

Kotak Short Term Fund has a short tenure of one to three years. The fund is suitable for people that desire to have moderate returns over short-term investments. The Kotak Short Term Fund invests mostly in Government bonds, securities created and issued by the Central and State Government, as permitted by the RBI, which includes and aren’t limited to zero-coupon bonds, treasury bills, and coupon-bearing bonds.

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The Kotak Short Term Fund is an open-ended short-term debt scheme that invests in instruments that conform to the Macaulay duration of portfolio and, as previously stated, is from terms of one to three years.  It has two plans and options available for investing:  Regular Plan and Direct Plan, while the options are Payout of IDCW and Reinvestment of IDCW & Growth. 

Kotak Short Term Fund Details 

Parameters

Details

Fund House

Kotak Mutual Fund

Fund Name

Kotak Short Term Fund (Direct and Regular)

Launch Date of the Fund

May 2002

Benchmark of the Fund

NIFTY Short Duration Debt Index

Minimum Investment for the Fund

For Growth and Monthly Reinvestment of IDCW Option: A minimum of INR 5000 and for purchases in multiples of INR 1 and INR 0.01 for switches

 

For Monthly Payout of IDCW Option: INR 50,000 or above.

Type of Fund

Open-Ended

Entry Load

With respect to SEBI’s guidelines, no entry load is charged on purchases, switch-ins, or additional purchases.

Exit Load

None 

Return Performance

Average

Fund Consistency

Consistent

Risk Level 

Moderate

Investment Objective

The Kotak Short Term Bond Fund has an objective of investing such that the person investing in the scheme is entitled to reasonable returns. It has reasonably high levels of liquidity by investing in debt instruments like bonds, Government Securities, and debentures. It also invests in various money market instruments like commercial papers (CPs), Certificates of Deposits (CDs), including but not limited to repos in permitted securities of various maturities, and treasury bills to disperse the risk across different sorts of issuers in the debt market. 

Investors must be aware that although the scheme has a low to moderate risk factor, the scheme does not guarantee profits or returns on their investments. Due to the volatile nature of the market, the Kotak Short Term Fund may fail to provide returns, but that doesn't necessarily mean it will not offer any returns.

Fund Summary

  1. Kotak Short Term Fund - Regular Growth

    • Risk Level- Low to Moderate
    • NAV - INR 41.39 as of 18th of June, 2021
    • Expense Ratio- 1.16% as of 31st of May, 2021
    • Fund Started- May 2002
  2. Kotak Short Term Fund - Direct-Growth

    • Risk Level- Low to Moderate
    • NAV - INR 41.39 as of 18th of June, 2021
    • Expense Ratio- 1.16% as of 31st of May, 2021
    • Fund Started- May 2002
  3. Kotak Short Term Fund - Direct IDCW

    • Risk Level- Low to Moderate
    • NAV - INR 13.8286 as of 18th of June, 2021
    • Expense Ratio- 0.34% as of 31st of May, 2021
    • Fund Started- May 2002
  4. Kotak Short Term Fund - Regular IDCW

    • Risk Level- Low to Moderate
    • NAV - INR 10.0396 as of 18th of June, 2021
    • Expense Ratio- 1.16% as of 31st of May, 2021
    • Fund Started- May 2002

Fund Returns Summary

  1. Kotak Short Term Fund - Regular Growth

    Time Period

    Returns Per Year (Annualized)

    1 Month

    0.32%

    3 Months

    1.83%

    6 Months

    1.35%

    1 Year

    5.54%

    3 Years

    8.25%

    5 Years

    7.6%

    10 Years

    8.19%

  2. Kotak Short Term Fund - Direct-Growth

    Time Period

    Returns Per Year (Annualized)

    1 Month

    0.38%

    3 Months

    2.04%

    6 Months

    1.76%

    1 Year

    6.39%

    3 Years

    9.14%

    5 Years

    8.5%

    10 Years

    NIL

  3. Kotak Short Term Fund - Direct IDCW

    Time Period

    Returns Per Year (Annualized)

    1 Month

    0.48%

    3 Months

    2.31%

    6 Months

    1.77%

    1 Year

    6.68%

    3 Years

    28.99%

    5 Years

    45.04%

    10 Years

    NIL

  4. Kotak Short Term Fund - Regular IDCW 

    Time Period

    Returns Per Year (Annualized)

    1 Month

    0.41%

    3 Months

    2.08%

    6 Months

    1.34%

    1 Year

    5.80%

    3 Years

    17.40%

    5 Years

    28.46%

    10 Years

    NIL

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

Pros and Cons of Kotak Short Term Funds

Pros of the Fund

Cons of the Fund

A low expense ratio of 0.34%

The AUM being more than 15,000crores, the fund is susceptible to low returns in the future when the AUM will exceed the threshold

Comparatively High returns in the 3 years bracket in this category of up to 9.22%

1-year returns are relatively lower in this category of up to 5.82%

Comparatively High returns in the 5 years bracket in this category of up to 8.51%

Benefits of Kotak Short Term Fund

A wide range of benefits is offered to investors planning to invest in the Kotak Short Term Bond Fund. Some of these benefits are as discussed below:

  1. Stable Investments

     Kotak Short Term Fund invests primarily in government bonds and securities. These bonds are securities that carry a low risk of losses compared to other assets, such as equities. The risk is low since the Government guarantees the returns. Nonetheless, there are certain market-related risks accompanied by these securities and bonds but by holding on until the bonds' maturity nullifies the risk. So, it is a stable investment. 

  2. Special Products

    Some products available for investors on offer by the fund house are Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP), Systematic Transfer Plan (STP), Transfer of Income Distribution cum Capital Withdrawal (IDCW) facility, Switching, Variable Transfer Plan (VTP), SIP Pause Facility and daily frequency under Systematic Transfer Plan Facility.

  3. Benchmark Performance

     The Kotak Short Term Fund has a benchmark better than its primary benchmark, Nifty Short Duration Debt Index, and also has a lower risk benchmark. It is set to perform better than most other funds in the category with the said benchmark. 

  4. Leading Track Record

    The fund has been in the sector for over 9 years and has been rising. It has a good history of scaling performance and having a reputable trend amongst the masses. 

  5. Convenience

     People can invest in the fund online through the fund house's web portal. They can also choose to invest in the fund through SIPs or even lump sum investments.

Who Should Invest in Kotak Short Term Fund?

The fund has a short term of one to three years which yields reasonable returns over the short term. The scheme has a portfolio of high quality and has very low credit risks. With the budget announced in 2021, an increase in Government bonds will yield great returns, and since the Kotak Short Term Bond Fund invests in the same, it shall perform well with low risk. The fund primarily focuses on liquidity, safety, and returns while handling the portfolio.

In the fund's January 2021 portfolio, 95 percent of funds are held in the highest-rated corporate bonds and Government securities and balance in the equivalents of cash. The bonds carry a low-risk level since the fund house doesn't invest simply in a single group rather multiple groups, which mitigates the risk factor. If a person looks to have reasonable returns in the short term, then Kotak Short Term Fund is one of the best options to consider while purchasing the highest-rated short-term fund.

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

Conclusion

With the plethora of benefits and comparatively better returns than the competitors, the Kotak Short Term Fund is one of the best choices for investors. The mutual fund holds the potential to provide returns to its investors with very low risk over tenure of one to three years. It can sustain returns due to guaranteed returns as the investment is primarily in the Government sector, such as bonds and securities.

For a person not looking to invest in a long-term mutual fund, this is the go-to mutual fund. With the track record being flawless and convenient investing options, the mutual fund is at par with its competitors.

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