ITI Ultra Short Term Fund: Debt Fund Guide

If you’re looking for a debt fund option, the ITI Ultra Short Term Fund Regular-IDCW Weekly, launched on May 5, 2021, aims to offer both regular income and capital growth.

This open-ended Ultra Short Duration Debt scheme from ITI Mutual Fund invests in short-term debt and money market instruments, targeting a Macaulay duration between 3 to 6 months.

Key Fund Numbers You Should Know

Understanding a fund starts with its core figures. Here’s a quick look at the ITI Ultra Short Term Fund’s snapshot as of recent dates:

• Its Net Asset Value (NAV) for the IDCW Weekly option stood at ₹1,001.16 on July 30, 2026.
• The fund manages Assets Under Management (AUM) of ₹152.84 crore as of June 30, 2026.
• The expense ratio is 0.91% as of July 24, 2026, which is slightly higher than the category average of 0.75%.
• It falls into a Low to Moderate risk category and has no exit load if you decide to withdraw your investment.

When you’re starting out, minimum investments are important to consider. You can begin with a minimum initial investment of ₹5,000, add more with just ₹1,000, or set up a Systematic Investment Plan (SIP) for as little as ₹500.

How Has the Fund Performed?

Performance is a key factor for any investment. Here are the trailing returns for this fund:

• 1 year: 5.56%
• 3 years: 6.25%
• 5 years: 5.43%
• Since launch: 5.32%

It’s worth noting that these returns have generally been below the category average for the same periods, which is something to keep in mind as you evaluate.

What’s Inside Your Investment?

The fund’s portfolio is structured to maintain a modified duration of 0.36 years and an average maturity of 0.36 years, with a yield to maturity of 6.5%. This strategy focuses on low-risk instruments.

A significant portion of the fund, 87.90%, is invested in low-risk instruments, with 9.72% specifically in government-backed securities. The credit rating profile of the instruments held is predominantly high, including A1+ and AAA rated assets.

Here’s a breakdown of its major holdings:

• Certificate of Deposits (CDs): 46.21%
• Treasury Bills (T-Bills): 9.72%
• Commercial Papers (CPs): 16.79%
• NCD & Bonds: 24.90%

Navigating Tax on Your Fund Earnings

Understanding the tax implications of your investments is crucial for managing your overall returns. Here’s how the tax rules apply to this fund:

• For investments made after April 1, 2023: Any capital gains you earn will be added to your total income and taxed according to your individual income tax slab rate.
• For investments made before April 1, 2023: If you redeem your gains within 3 years, they are taxed at your slab rate. If you hold them for more than 3 years, you benefit from indexation and are taxed at 20%.
• For dividend income: This income is also added to your total income and taxed per your slab. A 10% Tax Deducted at Source (TDS) applies if your dividend income exceeds ₹5,000 in a financial year.

This fund offers a structured approach to short-term debt, and knowing these details helps you make informed decisions about your financial journey.