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Liquid Funds India - Invest in Best Liquid Mutual Funds of 2020 Research Team | Posted On Tuesday, March 10,2020, 03:11 PM

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Liquid Funds India - Invest in Best Liquid Mutual Funds of 2020



Liquid funds are among the best short-term funds you can look forward to. Liquid funds bank on high liquidity and easy conversion to cash. Liquid funds invest in commercial paper, treasury bills, certificates of deposits and so on. Here are some insights into liquid funds.

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Liquid Funds India - Invest in Best Liquid Mutual Funds of 2020

What are Liquid Funds?

Liquid funds are debt funds that come with a shorter duration and higher flexibility. These funds invest in assured return instruments like G-Secs, bank FDs, commercial paper, treasury bills and so on. The maximum maturity of liquid funds is up to 90 days. There is no lock-in period in case of liquid funds and your investment gets processed for conversion within a span of 24 working hours.

The NAV of liquid funds is calculated based on the working days. This is against other debt funds where the NAV is calculated based only on the business days for which the fund is held or until maturity. 

See Also: Saving Account vs. Liquid Funds: Which Gives Better Returns

Liquid Funds Come with Several Benefits Like:

  1. There is no entry or exit load.
  2. There is minimum risk associated with liquid funds.
  3. There is no lock-in period.
  4. The withdrawal or conversion is quick.
  5. They are excellent for short-term investments.

Who Should Invest in Liquid Funds?

Investors who are looking to maneuver their investments over a shorter investment span and are not looking forward to a high rate of interest; invest in liquid funds. Although liquid funds are highly flexible and provide a good deal of liquidity, you must not invest all your emergency money in liquid funds.

The return generated by liquid funds are in the range of 6-7% which is higher than SB accounts. If you are looking forward to investing in an avenue that is both secure and flexible then liquid funds are your go-to option.

See Also: All You Wanted to Know About Liquid Funds

Here are the 5 best liquid funds to invest in 2020:

1. ICICI Prudential Liquid Fund

This fund was launched in November 2005 and has been a consistent performer ever since. Managed by two experts, Mr. Rahul Goswami and Mr. Rohan Maru, this fund is nearly 15 years old and has been constantly outperforming its benchmark, CRISIL Liquid Fund Index (TRI).

The 1 year and 3-year returns of this fund are 7.42% and 7.15% respectively. The potential credit risk in this investment scheme is minimal as it has invested in securities that are highly rated and possesses a credible track record. The AUM of this fund is Rs. 45,842 Crore.

2. HDFC Liquid Fund

The HDFC Liquid fund was launched in the year 2000 and is almost 20 years old. It is one of the most trusted and invested liquid funds in the category and has consistently outperformed the benchmark and competitors. The fund manager Mr. Anupam Joshi is a pioneer in the field and has succeeded in maintaining a par excellence performance for this fund. The AUM of this fund is Rs. 63,423 Crore and the last 1 year and 3-year returns are 7.32% and 7.04% respectively.

3. Kotak Mahindra Liquid Scheme

Flourishing since November 2003, the Kotak Mahindra Liquid Scheme is one of the best in the category. The fund has managed to beat its benchmark, NIFTY Liquid Fund Index (TRI) across all durations and has been performing extremely well ever since. The fund manager, Mr. Deepak Agarwal along with his team has taken the Kotak Mahindra Liquid Scheme to greater heights with an AUM of Rs. 24,878 Crores. The 1 year and 3-year returns of this scheme are 7.40% and 7.12% respectively. The scheme is invested in AAA-rated securities, ensuring high security.

See Also: PhonePe Launches Liquid Fund: Is It a Good Investment Option?

4. Aditya Birla Sun Life Liquid Fund

One of the oldest liquid fund schemes in the market, the Aditya Birla Sun Life Liquid Fund has been endowing the investors since June 1997. The fund holds an AUM of Rs 42,071 Crores under the management of Mr. Kaustubh Gupta and Ms. Sunaina Da Cunha.

5. Nippon India Liquid Fund

Previously known as Reliance Liquid Fund-Treasury Plan, the Nippon India Liquid fund is an excellent scheme to look forward to. The fund has managed to generate 6.4% and 6.9% as 1 year and 3-year returns. The fund holds AUM of Rs 29,214 Crores and is a great option to invest in the category of liquid funds.

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