All those Mutual Funds which expire in 1-3 years are categorised as Low Duration Mutual Funds.

Now primarily, Low Duration Funds are used as instruments to invest for a time period of usually 6-12 months.

<aside> 🧠 Fun Fact: Some investment managers use this to test the patience capacity of an investor, befor making them invest in a longer term scheme/instrument.

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So, Low Duration Funds invests in instruments such as Bonds, Treasury Bills and debt market instruments such as Certificates of Deposits. Bear in mind, this debt mutual fund scheme does not have a lock in period and is an open ended scheme.

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Average annual returns from Low Duration Funds range between 6.5 to 8.5%.

🏦 Features of Low Duration Mutual Funds :

• Excellent avenues to invest in indian economy.
• Have given steady and stable returns throughout! long term debt funds are more risky, this makes low duration funds better!
• Helps fulfill personal finance goals like vacation, buying a gift and test patience, especially for early investors.

🤑 Major Advantages:

1. Short duration acts as a risk inhibitor
2. directly invest in nations economy
3. rising YoY returns of this instrument.
4. excellent returns far better than FDs