TATA Ultra Short Term Fund

Fund in Brief

TATA Ultra Short Term Fund is a debt fund. The main objective behind investing in these funds is yielding better returns than a savings account or short-term fixed deposit bond. 

Following are the two categories in which the funds are divided and yield different returns for individuals:

• Funds having 3 months of maturity period
• Funds having 6 months of maturity period

TATA Ultra Short Term Fund is offered in two types:

• Regular plan with Income Distribution cum Capital Withdrawal (IDCW) on a weekly or monthly basis
• Direct plan with Income Distribution cum Capital Withdrawal (IDCW) on a weekly or monthly basis

TATA Ultra Short Term Fund Facts

Investment Objective

The investment objective of the TATA Ultra Short Term Fund is to generate better returns for investors under debt and money-market investment categories. These funds follow the Macaulay maturity period from 3 to 6 months. 

These funds come under the low-risk category that means it is not guaranteed that funds will generate surplus returns. Therefore, there is no guarantee offered by the fund on maximizing returns.

Fund summary

Regular plan with IDCW (Income Distribution cum Capital Withdrawal) on a weekly or monthly basis:

• Risk involved: Low - moderate 
• Expense ratio: 1.02%
• Regular growth NAV: Rs.11.3885
• Regular monthly IDCW NAV: INR 11.3908
• Regular weekly IDCW NAV: INR 10.3782
• Minimum investment required: INR 5000 and in multiples of INR 1 after that
• Additional minimum investment: INR 1000 and in multiples of INR 1 afterwards
• Compound Annual Growth Return Rate (CAGR): 5.98% since inception

Direct plan with IDCW on a weekly or monthly basis:

• Risk involved: Low - moderate 
• Expense ratio: 0.29%
• Direct growth NAV: INR 11.5901
• Direct monthly IDCW NAV: INR 11.5919
• Direct weekly IDCW NAV: INR 10.4053
• Minimum investment required: INR 5000 and in multiples of INR 1 after that 
• Additional minimum investment required: INR 1000 and in multiples of INR 1 after that
• Compound Annual Growth Return Rate (CAGR): 5.98% since inception

Funds return summary

1. Returns for the TATA Ultra Short Term Fund

   Investment period	INR 10,000 invested on	Latest value	Exact returns	Yearly returns	Category  average	Rank within category
   1 Week	26-Aug-21	10007.20	0.07%	-	0.09%	20/31
   1 Month	02-Aug-21	10032.90	0.33%	-	0.34%	15/31
   3 Month	02-Jun-21	10087.60	0.88%	-	1.09%	18/31
   6 Month	02-Mar-21	10174.70	1.75%	-	2.01%	19/30
   YTD	01-Jan-21	10212.70	2.13%	-	2.51%	24/30
   1 Year	02-Sep-20	10332.20	3.32%	3.32%	3.83%	21/29
   2 Year	30-Aug-19	10925.50	9.25%	4.50%	4.93%	19/26
   Since Inception	22-Jan-19	11428.60	14.29%	5.24%	6.21%	23/31

   *Returns are subject to change.

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

2. SIP returns for the TATA Ultra Short Term Fund

   Investment period	₹1000 SIP started on	Investments	Latest value	Exact returns	Yearly returns
   1 Year	02-Sep-20	12000	12215.52	1.8%	3.34%
   2 Year	30-Aug-19	24000	24978.73	4.08%	3.8%

   *Returns are subject to change.

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

Pros and Cons

Benefits of the TATA Ultra Short Term Fund

TATA Ultra Short Term Fund offers not one but several benefits to the investors, such as:

• Low-risk funds: Investing in mutual funds involves a certain level of risk because of the market fluctuations. By investing in TATA Ultra Short Term Fund, you can be sure of the capital that you invest as the risk factor is relatively low. Even though it gives lower returns than investments in equity funds, it provides a higher guarantee that you won't lose your invested capital.

• Short-term investment: If you are not in urgent need of the surplus money in your bank, it is wise to invest it and earn returns on the same. The TATA Ultra Short Term Fund as an investment option is quite feasible for such motives, given the maturity period of the funds is significantly less. That also ensures that your money won't be locked away for long as you can get it back along with interest earned in a short period.

• Higher returns than FDs: TATA Ultra Short Term Fund gives a marginal increase in funds, which are higher than what the bank will give you in a savings account or fixed deposit for the same period.

• Good performance: TATA Ultra Short Term Fund has shown excellent and consistent performance since its inception. Hence, it adds to the reliability of the fund.

Fund House Details

TATA Mutual Funds is a fund house related to the TATA group and is the country's largest and most trusted industrial group. TATA group is revered for its business ethics. It works with a customer-centric approach and always looks to offer the best financial service, and they aim to uphold the faith that the customers put in them by choosing them as their asset managers.

Therefore, much of the TATA group's sub-companies are associated with philanthropic activities. For example, it endows educational institutions, medical care, and the field of arts in monetary terms.

The group recently completed its 25 years of service, which shows the insight of the TATA group and its people. It also shows the community's trust in the institution. The primary goal of the TATA group is wealth creation, and they do so by offering investment solutions and financial planning in various spectrums of society.

Who Should Invest in the TATA Ultra Short Term Fund?

Following  people should consider investing in TATA Ultra Short Term Fund:

• TATA Ultra Short Term Fund offers low returns but assurance on the capital invested. Therefore, it is ideal for individuals looking for a marginal increase in returns without losing their money.

• TATA Ultra Short Term Fund is a moderate to low risk fund. So you can invest in these funds without having much knowledge about the market and the risk related to it. Also, if you want to avoid taking higher risks for your money.

• It is suitable for those who have the knowledge and prefer investing in debt-based funds.

• Individuals who are looking for short-term investment options without much risk involved should choose this investment option.

In Conclusion

To sum it up, TATA Ultra Short Term Fund is an investment option that offers a marginal increase in investment capital without having much risk involved. In addition, it has a maturity period of 3 months to 6 months. 

If you have a surplus and want to park it for a short time and earn returns on it, then the TATA Ultra Short Term Fund can be a suitable option for you.

FAQ's