Low Duration Mutual Funds are those which Invests in Government Bonds / Debts which has average maturity period between 6 to 12 Months i.e. up-to One Year.
The holding period relies on Macaulay duration, which is the weighted average of the time to receive the fixed cash flows from a bond. It is measured in units of years.
Macaulay duration tells the weighted average time that a bond needs to be held so that the total present value of the cash flows received is equal to the current market price paid for the bond. It is often used in bond immunization strategies.
Low duration funds are suitable for those looking for alternatives to Bank Fixed Deposits and who wants to invest for a period of 6 months to 3 years.
Returns: 3% to 7%
Lesser Risk to Interest Changes.
Capital Protection: your Principal amount will not get disturbed.
Below are Regularly Paying Monthly IDCW Low Duration Funds:
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