Here is why FundsIndia recommends HDFC Short Term Debt

A reasonably large-sized fund:

The fund maintains a reasonable AUM size of around Rs 8,974 crore.

Positioned for the short term (2-3 years): The fund is suitable for investors looking to hold for a minimum of 2-3 years timeline with high credit quality and low volatility in returns.

With portfolio yields comfortably above inflation: The fund currently runs a YTM of 7.0 percent, which is a representation of the aggregate interest rate at which the fund lends to different companies (or the government). The Expense Ratio of the fund is the lowest in its category at 0.4 percent, compared to the category average of 1.1 percent.

Prioritising safety and high credit quality: The fund has high credit quality with allocation to highest rated papers (AAA and Equivalent) at 92 percent. The remaining 8 percent has been invested in companies with rating AA and below.

The list of non-AAA instruments that the fund has exposure to is given below.

The fact is that – most of the non-AAA rated exposure of the fund is owned either by the government or by large and well-established groups such as Tata, Aditya Birla Group and Vedanta – is a reflection of the high credit quality focus of the fund.