Invest in Aditya Birla Sun Life Floating Rate - Short Term - Growth for higher returns

Invest in Aditya Birla Sun Life Floating Rate - Short Term - Growth for higher returns

May 9, 2018

Earning a higher rate of returns in a short duration of time could be the main purpose for few of those who invest in mutual funds. For such investors, liquid funds are a great option to meet the intended purpose. Liquid funds are those mutual funds where the corpus is invested in very short term market instruments. These could include the likes of call money, government securities, treasury bills etc. With the decrease in the interests on bank savings, liquid funds are a good option to earn higher rates of returns. The investments made in these mutual funds are less than 91 days i.e. the investments are parked by the investors anywhere in the range of a day to three months.

The specific features of the liquid funds are – high rate of returns, high liquidity and higher risk.

Knowing about Aditya Birla Sun Life Floating Rate – Short Term - Growth Fund

Aditya Birla Sun Life Floating Rate - Short term - Growth fund is a liquid fund which was launched on 10-10-2005. The minimum amount of investment into the fund is Rs.1000 and has a scope of further top up investment with a minimum amount of Rs.1000. The aim of the fund is to generate income on a regular basis by investing in a portfolio, of which a major portion is in the money market investments. This is to enhance the short term returns and the higher liquidity of the fund.

The investment of this fund does not go into any of the various business sectors as is the case with most of the other mutual funds. However the portfolio of Aditya Birla Sun Life Floating rate – Short Term – Growth fund includes a diverse range of money instrument options. India Infoline Finance Ltd, Vedanta Ltd, and Steel Authority of India ltd are the top three investments which take a share of nearly 20% of the total corpus fund. 6 % of the investment is made into the 91 days Treasury bill, which is a short term treasury bill. The other major components of the portfolio include Axis Bank Ltd, Dena Bank, India Bulls real estate ltd, HDB Financial services ltd etc. 3.8 % of the corpus is invested as a central loan.

Only 45 % of the investments are among the top three components and a major share of 55% is made in diverse money instruments. This increases the rate of returns of this liquid fund.

Performance of Aditya Birla Sun Life Floating Rate - Short Term - Growth Fund

Since the launch of the fund in 2005, the fund has stayed true to its objective of providing regular and higher rates of returns on the investments made. The 1-year, 3-year and 5-year returns of the fund have shown a consistently higher figure when compared to the average returns of the Liquids funds category.

The one year returns of this fund are 6.87% which is marginally higher than the category average of 6.35 %. The 3-year return of the fund also is substantially higher with a return of 7.45% when compared to the Liquid Funds category average returns of 6.89%.


Source: Swaraj Wealth Research


This performance is maintained in the 5-year returns where the Aditya Birla Sun Life Floating Rate- Liquid Fund has recorded returns of 8.17% which is higher than the average of the category at 7.61%.

Apart from the 5-year returns, the year on year performance of the fund has been consistently better than the average year on year growth of the Liquid Funds category of Mutual funds.


Source: Swaraj Wealth Research


The data of the last five years indicates a consistent outperformance of the Aditya Birla Sun Life Floating Rate fund than the Liquid Funds category. In the year 2017, the fund has recorded yearly returns of 6.76 % which is higher than the average performance of the category.

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