Based on recent data, the average one-year return across several prominent liquid funds is 7.28%.
Liquid funds are a type of mutual fund designed for short-term investments, prioritizing high liquidity and capital preservation. They primarily invest in money market instruments like treasury bills, commercial papers, and certificates of deposit, which typically have very short maturities. This makes them a suitable option for parking emergency funds or for short-term financial goals where easy access to money is crucial.
Understanding Liquid Fund Returns
The returns from liquid funds are generally stable and tend to be closely linked to prevailing short-term interest rates in the economy. While they offer lower returns compared to equity or long-term debt funds, their stability and liquidity make them an attractive choice for conservative investors.
Here's a look at the one-year returns for some liquid funds:
| Scheme Name | Plan | 1Y Return |
|---|---|---|
| Groww Liquid Fund - Direct Plan - Growth | Direct Plan | 7.46% |
| PGIM India Liquid Fund - Growth | Regular | 7.31% |
| Navi Liquid Fund - Direct Plan - Growth | Direct Plan | 6.98% |
| Groww Liquid Fund - Regular Plan - Growth | Regular | 7.35% |
Calculating the Average Return
To determine the average return, we sum the one-year returns of these funds and divide by the total number of funds:
(7.46% + 7.31% + 6.98% + 7.35%) / 4 = 29.10% / 4 = 7.275%
Rounding this figure, the average one-year return for these liquid funds is approximately 7.28%. This average provides a representative benchmark for the performance of liquid funds over the specified period, reflecting their focus on stability and highly liquid short-term debt instruments.
