Tata Mutual Fund serves as one of the most prestigious management companies that offer various types of mutual fund schemes for investments. Out of the various schemes available, liquid mutual funds from Tata can serve as an ideal choice for investors who wish to invest their hard-earned money into a mutual fund scheme that offers minimal risk but maximum liquidity. The following article explores the meaning of a liquid mutual fund and other essential details regarding the top liquid fund by Tata Mutual Fund that investors can select for their investment portfolio:
Liquid mutual funds: Meaning
Aliquid mutual fund is a type of mutual fund investment scheme that helps investors to invest in securities and assets which are known for their minimal risk. Moreover, such mutual funds are known for their higher liquidity helping investors to cash out their investments any time they prefer.
Tata liquid fund
Being an open-ended liquid fund scheme, the Tata liquid fund delivers higher liquidity to its investors. Consisting of debt and money market instruments, the Tata liquid fund offers protection from any kind of financial risk. Investment into a Tata liquid fund can help investors generate reasonable returns with minimal risk. Following our certain essential details regarding the Tata liquid fund that investors must be aware of;
Fund size ₹25,965 crores
Expense ratio 0.21%
NAV ₹4083.79
Inception date 1st January 2013
Minimum investment ₹5000 in lump-sum and ₹500 for SIP investments
Exit load 0.007% if redeemed in a single day, 0.0045% if redeemed within 6 days, and no exit load in case the investors redeem in and after the 7th day.
Past performance
The Tata liquid mutual fund has been able to generate a reasonable amount of returns which have been listed as follows.
One-year return – 7.35%
Three-year return – 6.74%
Five-year return – 5.56%
Since its inception – 6.9% CAGR
Portfolio holdings
The Tata liquid mutual fund mainly comprises debt and money market instruments and various other securities with immaturity of up to 91 days. These include investments and securities related to the Reserve Bank of India, Reliance Industries Ltd, Reliance Retail Ventures Ltd, and the National Bank for Agriculture and Rural Development. The fund manager is responsible for managing the Tata liquid fund investment in high-quality instruments with a high credit rating of A1. 80% of the fund is invested in A 1+ rated securities and the remaining 20% is directed towards sovereign securities.
Liquid mutual funds serve as a reliable option for investors who wish to park their minimum investments for a short period to generate reasonable returns. With investment in high-quality securities with a high credit rating, liquidity, and lower risk, the Tata liquid fund can offer overall protection from any kind of financial risk or loss. Moreover, investment in Tata liquid funds can even help investors diversify their overall investment portfolio by investing in securities that attract minimal risk. However, investors must opt for complete research and analysis before investing in a liquid fund. Sound financial planning, decision-making, and analysis of every aspect related to the Tata liquid fund are essential before investment.
