Low Duration Mutual Funds are investments in debt paper with a maturity of between 6 to 12 months. These funds are designed to provide consistent returns with minimum responsiveness to fluctuations in the interest rate. Low duration funds can be used to cope with risk by investing in high quality debt securities that provide superior returns than ultra-short or liquid funds. They are appropriate in the case of investors with a short investment horizon, who want predictable income with a low level of volatility.
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