Sundaram Ultra Short Term Fund

The Sundaram Ultra Short Term Fund is an open mutual fund that invests in low-risk bonds and money market instruments maturing in three to six months. The fund primarily invests in money market securities issued by the central government, state government, and corporates.

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Fund in Brief

The Sundaram Ultra Short Term Fund has been in the market for more than 2 years and is currently managed by Sundaram Asset Management Company. To earn higher returns, the fund invests primarily in debt securities and money market instruments with high-quality credit ratings and yield superior liquid funds to maturity.

The fund is offered in two types of plans:

  • Sundaram Ultra Short Term Fund Regular plan
  • Sundaram Ultra Short Term Fund Direct plan

These plans are further offered in three categories:

  • Growth option
  • Monthly Income Distribution and Cash Withdrawal (IDCW) option
  • Income Distribution and Cash Withdrawal option

Sundaram Ultra Short Term Fund Facts 

Name of the Asset Management Company (AMC)

Sundaram AMC Limited

Category of the fund

Money Market Debt Instrument

Class of the fund

Debt

Launch date

June 24, 2019

Benchmark

CRISIL Ultra Short Term Debt Index

Open/Close

Open 

Risk level

Low to Moderate

Investment amount

Minimum investment = INR 1,000

Entry load

Zero

Exit load

Zero

Investment Objective

Sundaram Ultra Short Term Fund has the primary objective of generating stable income by investing in a hybrid portfolio of moderate volatility. Accordingly, Sundaram Asset Management Company invests in government or corporate debt paper with superior credit profile and liquidity. 

Investments are made only when the securities depict potential returns while investing in debt paper maturing in three to six months. 

The constant monitoring also helps the fund house invest in highly liquid debt and money market instruments. You must note that the investments in this fund are not fully protected from market risks and interest rate fluctuations.

Fund Summary

  1. Sundaram Ultra Short Term Fund Regular Plan

    • Risk: Moderate
    • Expense Ratio (as of July 31, 2021): 1.51% 
    • Net Asset Value (NAV): Rs 10.9661 (as of September 2021)
    • Returns: 2.61% (1 year)
    • Compound Annual Growth Rate (CAGR): 4.3% p.a. (since inception)
  2. Sundaram Ultra Short Term Fund Direct Plan

    • Risk: Moderate
    • Expense Ratio (as of July 31, 2021): 0.19% 
    • Net Asset Value (NAV): Rs 11.2557 (as of September 2021)
    • Returns: 3.97 (1 year)
    • Compound Annual Growth Rate (CAGR): 5.54% p.a. (Since inception)

    In the IDCW payout option, the payment of dividends depends on if your name appears in the unit holders' register and the availability of surplus, computed as per SEBI Regulations. 

    On the other hand, the dividends are automatically reinvested if you have opted for the IDCW reinvestment or growth option.

Fund Return Summary

  1. Sundaram Ultra Short Term Fund Regular Plan

    Tenure  

    Annualized return

    3 month

    0.67%

    6 month

    1.34%

    1 year

    2.61%

    Since inception

    4.30%

  2. Sundaram Ultra Short Term Fund (Direct) Plan

    Tenure  

    Annualized return

    3 month

    1.00%

    6 month

    2.03%

    1 year

    3.97%

    Since inception

    5.54%

    *Returns are subject to change.

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

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

Pros and Cons 

Listed below are the pros and cons of the fund:

Pros

Cons

The fund is suitable for investment horizons of 3-1 year. 

There is no contracted interest or principal repayment like a fixed deposit

The fund has outperformed its Benchmark: CRISIL Ultra Short-Term Bond TRI over the 3 months and 1 year period.

The fund has underperformed its Benchmark: CRISIL Short-Term Bond TRI in the 6 months.

Follows optimum risk mitigation strategies such as spreading investments across various categories of debt paper.

Not apt for long-term investing.

Benefits of Sundaram Ultra Short Term Fund

For investing in this fund, consider the following benefits of the Sundaram Ultra Short Term Fund:

  • Meeting Short-Term Goals: An ultra-short-term debt fund is a useful tool for investing to achieve short-term goals. Due to its low average maturity period, such funds are adequately protected from interest rate movements significantly.
  • Stable Returns: The fund portfolio comprises debt and money market instruments that provide a contracted rate of return along with a scheduled maturity date. These short-maturity securities are not adversely impacted by interest rate fluctuations if held till maturity.
  • Consistent performance: The fund has consistent performance in all its years of run in the market. Consequently, it has gained the trust of several investors.

Fund House Details

Sundaram Ultra Short Term Fund is housed under Sundaram Asset Management Company. It is a wholly-owned subsidiary of one of India's oldest and most trusted NBFCs - Sundaram Finance Limited. Since 1996, Sundaram Asset Management Company has managed funds that cater to the investment needs of investors with different risk, reward, and liquidity preferences.

As an entity housed under the Sundaram brand, the Mutual Fund House places the retail investor at the core of its business objectives. Its products across the equity and fixed-income spectrum cater to a wide range of investors' risk, return, and liquidity preferences. 

It was amongst the first mutual fund houses to launch schemes under mid-caps, leadership, rural India, and micro caps and services. 

Robust processes backed by a strong research team aid the fund house in Its deep commitment to ensuring mutual funds accessibility to all. With over 90 branches across India, Sundaram Asset Management Company also has an office in Dubai and a wholly-owned Singapore subsidiary.

Who Should Invest in the Sundaram Ultra Short Term Fund?

If the following points match your investment goals or strategies, you can choose to invest in this fund:

  • If you have short-term investment goals or simply want to park your surplus money to generate returns, you can choose this fund.
  • If you want to earn better returns than a savings bank account or a short tenor fixed deposit, Sundaram Ultra Short Term Fund is your reliable partner with moderate risk features.
  • If you prefer avoiding risk from equity funds, this fund can be an ideal choice.

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

In Conclusion

Considering the benefits of stable returns and shorter portfolio duration, Sundaram Ultra Short Term Fund is ideal for investors looking for stable returns between 3 months to 1 year period. The investments are tactically planned by persistent analysis of the market and analysis of the liquid nature of the underlying investments. It is a reliable investment option as indicated by its positive track record.

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