Mutual funds: 5 money market schemes delivered over 7.5% return to investors in the past one year

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With interest rates hovering at a high level, investments in debt mutual funds have delivered handsome returns. Reserve Bank of India (RBI) has kept the repo rate unchanged for the past 12 months, thus rendering the investments in debt instruments reasonably attractive.

Now, RBI is expected to cut the interest rate later this year, as per a Reuters report thus triggering the onset of a declining interest rate cycle.

Among debt mutual funds, there are multiple options which investors can opt for. Here we put the spotlight on money market mutual funds which have given decent returns to investors.

Let us first describe what money market funds are.

Money market funds

These are mutual fund schemes which invest in money market instruments with maturity of up to one year. There are 23 mutual fund schemes in this category with total AUM (assets under management) of 1.83 lakh crore, shows the AMFI (Association of Mutual Funds in India) data on April 30, 2024.

ALSO READ | How to choose the right debt mutual fund? Types, risks and rewards explained

There are nearly half a dozen mutual fund schemes which have given a return of over 7.5 percent in the past one year. These include the following:

Money market schemes                                            1-year-returns (%)  AUM( crore)
Aditya Birla Sun Life Money Manager Fund                         7.57 23,789
ICICI Prudential Money Market Fund                                                     7.52 23,203.11
Nippon India Money Market Fund                                                 7.54 15,808.49
Tata Money Market Fund                                                          7.53 17,732.61
UTI Money Market Fund                                                              7.55 14,633.93

(Source: AMFI)

As one can see in the table above, most mutual fund schemes have given similar returns i.e., around 7.5 percent. Debt mutual funds usually give assured but relatively lower returns when compared to those of equity mutual funds. But as the adage goes: with higher risk, comes higher return.

Interestingly, most of these mutual fund schemes have garnered huge amounts of investment from investors.

Their total asset size ranges between 14,633 crore to 23,789 crore with the highest of ABSL Money Manager Fund and the lowest of UTI Money Market Fund.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.



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Published: 14 May 2024, 03:19 PM IST