Reliance Low Duration Fund (Formerly known as Reliance Money Manager Fund)
The Reliance Low Duration Fund is an open-ended low duration debt scheme managed by Reliance Mutual Fund AMC. The Reliance Mutual Fund AMC is a joint venture between Reliance Capital and Nippon Life Insurance - The largest Japanese life insurance company by revenue. The fund primarily invests in money market and debt instruments and its portfolio is based on the Macaulay duration. The fund is highly flexible and is an ideal choice for investors who prefer a shorter investment horizon with a lower appetite for risk.
The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities.
Growth option: Under a growth option, the profits generated by this fund are reinvested into the scheme which in turn increase the net asset value of the units and generates a higher rate of return on a later date. This is beneficial for the investor in a way that if they decide to switch the current scheme, a long term capital gains profit can be easily booked. Thus, if you are looking for a higher level of capital appreciation, then Reliance low duration fund is a suitable option.
Regular plan: This plan is a popular choice among investors as it is easily available to them. The Reliance Low Duration Fund has a higher expense ratio in comparison to the direct plan. This, in return, leads to lower NAV.
Direct plan: This variant of the fund can be directly purchased from the investment fund house. This scheme has a lower expense ratio but has a high NAV, and hence you can purchase only a few units via systematic investment plan.
Dividend option: For investors who seek periodic income, this option is a suitable choice. But since mutual funds are related to market risks, the Reliance Low Duration Fund does not guarantee any dividend payouts. Furthermore, the dividend payout is on a per unit basis which leads to a decrease in the NAV of the units. The dividend payout can be availed on a weekly, daily, monthly or dividend reinvest.
| NAV as on 3 Oct 2018 | 2468.3919 |
| Fund Manager | Ms. Anju Chhajer and Mr. Ami Tripathi |
| Minimum Investment | ₹10,000 and in multiples of ₹1 thereafter for Daily Dividend Option For Weekly Dividend Option - ₹5000 & in multiples of ₹1 thereafter For Other Plans and Options - ₹500 and in multiples of ₹1 thereafter. |
| Risk | Moderately Low |
| Scheme Plan |
|
| Benchmark | Crisil Ultra Short Term Debt Index |
| Return % (1Yr) | 6.38 |
| Return % (3Yrs) | 7.46 |
| Return % (5Yrs) | 8.21 |
| Asset Size (Crores) | ₹14,230 |
*All information regarding Reliance Low Duration Fund has been sourced from the official website of Reliance Mutual Fund - reliancemutual.com/FundsAndPerformance/Pages/Reliance-Low-Duration-Fund.aspx
As mentioned before, the investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and liquidity by investing in debt securities and money market securities. This fund has its portfolio invested in approximately 90% higher rated (AAA/AA+) assets. Additionally, a small amount of investment is allocated in low quality bonds for the purpose of receiving accrual benefits for the investors.
Since the Reliance Low Duration Fund invests primarily in money market and debt instruments, it is bound to attract short term capital gains (STCG) if the fund has been held for 3 years or less. In case of long term capital gains (LTCG), the taxation rate stands at 10% or 20%, if the investor realises indexation benefits. The dividends earned in this case are completely tax free and no TDS is applicable.
| Type or Class | Name |
|---|---|
| Sovereign | Government securities with different rates |
| Money Market Instruments | ICICI Bank Limited, Axis Bank Limited, IDFC Bank Limited, ICICI Bank Limited, National Bank for Agricultural and Rural Development, Small Industries Development Bank of India, HDFC Bank Limited, Export Import Bank of India, Coromandel International Limited, Bahadur Chand Investments Pvt. Limited, Indus Towers Limited, Cholamandalam Investment and Finance Company Limited, United Spirits Limited, TGS Investment & Trade Pvt. Limited, Trapti Trading & Invest Pvt. Limited, Hero Cycles Limited, Reliance Industries Limited, Ford Credit India Private Limited, Vedanta Limited, Piramal Finance Limited, Reliance Industries, etc. |
| CARE AA- | IndoStar Capital Finance Limited |
| CRISIL/CARE/ICRA/FITCH AA+/AA | Tata Capital Limited, Vodafone Mobile Services Limited, JM Financial Products Limited, Piramal Enterprises Limited, L & T Finance Limited, Vedanta Limited, Sundaram Finance Limited, Aditya Birla Finance Limited, Tata Capital Housing Finance Limited, Vedanta Limited, Tata Capital Financial Services Limited, L&T Infrastructure Finance Company Limited, Ashok Leyland Limited, Reliance Capital Limited, Piramal Enterprises Limited, Tata Motors Limited, India Infoline Finance Limited, Shriram City Union Finance Limited, Nuvoco Vistas Corporation Limited, Shriram Transport Finance Corporation, Cholamandalam Investment and Finance Company Limited, etc. |
| CRISIL/CARE/ICRA/FITCH AAA | Tata Capital Limited, Vodafone Mobile Services Limited, JM Financial Products Limited, Piramal Enterprises Limited, L & T Finance Limited, Vedanta Limited, Sundaram Finance Limited, Aditya Birla Finance Limited, Tata Capital Housing Finance Limited, Vedanta Limited, Tata Capital Financial Services Limited, L&T Infrastructure Finance Company Limited, Ashok Leyland Limited, Reliance Capital Limited, Piramal Enterprises Limited, Tata Motors Limited, India Infoline Finance Limited, Shriram City Union Finance Limited, Nuvoco Vistas Corporation Limited, Shriram Transport Finance Corporation, Cholamandalam Investment and Finance Company Limited, etc. |
There are two fund managers for Reliance Low Duration Fund.
Amit Tripathi
Mr. Amit Tripathi has been managing Reliance Money Market Fund (June 2005), Reliance Low Duration Fund (Mar 2007), Reliance Floating Rate Fund (Oct 2007), Reliance Hybrid Bond Fund (Oct 2008), Reliance Prime Debt Fund (Oct 2008), Reliance Equity Hybrid Fund since (Aug 2010).
Anju Chhajer
Ms. Anju Chhajer has been managing Reliance Low Duration Fund (Oct 2009), Reliance Prime Debt Fund (Oct 2009), Reliance Ultra Short Duration Fund (Oct 2013), Reliance Liquid Fund (Oct 2013), Reliance Japan Equity Fund (Aug 2014), Reliance Retirement Fund - Wealth Creation Scheme (Feb 2015), Reliance Retirement Fund - Income Generation Scheme (Feb 2015), Reliance Banking & PSU Debt Fund (May 2015), Reliance Equity Savings Fund (May 2015), Reliance US Equity Opportunities Fund (Jul 2015).
How to invest in Reliance Low Duration Fund?
You can invest in Reliance Low Duration Fund via offline or online. For the offline option, you will have to visit any of the listed branches of Reliance Mutual Funds and submit the application form and KYC documents. For the online option, visit the official website of Reliance Mutual Fund where you need to register and create your profile for logging in. Post registration, you can successfully fill the online subscription form for investment.
How is Reliance Low Duration Fund?
The Reliance Low Duration Fund is an excellent option for investors who are looking for capital appreciation over a short term horizon.
What is Low Duration Fund?
The Reliance Low Duration Fund was formerly known as Reliance Money Manager Fund. It is just a change in name of the fund.
What are ultra short term funds?
Ultra short term funds are debt funds. Debt funds are mutual funds which invest in fixed-income securities. They include money market instruments and government bonds with an investment horizon of one year or less.
What is the difference between liquid fund and ultra short term fund?
Liquid funds are funds which hold primarily a liquid portfolio and have an investment horizon of no more than 91 days. Ultra short term funds are for investors who seek equities, so that they can park money in these funds for a short term.
What are ultra short term bond funds?
These are ultra short term funds which invest primarily in fixed income instruments and have liquid or short-term maturities.
Is a money market fund a bond?
A money market scheme invests in debt securities which mature in 3 months or less. Due to their quick maturity dates, a money market scheme is considered as cash investments.
What is short term maturity?
Any investment horizon which matures in 3 months or maximum one year, is categorised as a short term maturity.
How long are short term bonds?
The investment horizon for a short term bond ranges between 91 days to 365 days.
Why are long term bonds riskier?
The two reasons why a long term bond is riskier - 1. Over a long period inflation would reduce the value of payments. 2. A higher rate of interest can cause the bond’s price to fall.
Why are interest rates higher for longer terms?
There is an inverse relation between bond prices and interest rates. When interest rates fall, bond prices tend to rise.
Are bonds long term or short term?
They can be both - a short term investment horizon can be between 91 days to 365 days. A long term duration can hold a maturity value upto 10 years.
