Ultrashort passive debt funds offer high yield, low risk for 3-6 months

These passive debt funds replicate CRISIL's index, comprising AAA-rated instruments maturing in 3-6 months

Several fund houses, including ICICI Prudential Asset Management Company (AMC), Aditya Birla Sun Life AMC, Kotak Mahindra AMC and Bandhan AMC, have recently introduced ultra short-term debt index funds. These schemes track the CRISIL-IBX Financial Services 3–6 Months Debt Index. According to reports, the cut-off yield for 90-day treasury bills (T-bills) at Wednesday’s auction stood at 6.52 per cent, compared to 6.47 per cent for 364-day T-bills.

 

“Currently, investors are looking for stability, liquidity and reasonable returns amid fluctuating interest rates, inflationary pressures and global uncertainties. Short-duration debt instruments, particularly in the three–six-month segment, are attractive as they provide relatively