Scripbox debt portfolio (Short term Money) has returned 5.30% for the period May 1,2017 - April 30, 2018 while the term deposit rate for the same period has been around 6.43%. There was an under performance of the Debt Portfolio to the tune of 1.13%.
We believe that debt funds continue to be the best option over term deposits and we are quite confident going forward.
1.The core idea of Scripbox :
The objective of the Scripbox portfolio of Debt funds is to select a portfolio of 3 debt funds that have a consistent track record of performing better than CCIL Broad TRI Index, and therefore expected to do better than the Term Deposit rates.
We had the following 3 funds in the debt portfolio. This Report card is based on the performance of these funds from May 01, 2017 till Apr 30, 2018.
- Birla Sun Life Dynamic Bond Fund - Retail (G)
- Axis Liquid Fund (G)
- SBI Ultra Short Term Debt Fund (G)
The analysis of the absolute performance of the Scripbox Debt portfolio is against the other alternative investment option which is Term Deposits.
2.Scripbox Portfolio of Debt Funds
Axis Liquid Fund(G) outperformed the TDR by 0.41%; SBI Ultra Short Term Debt Fund(G) outperformed by 0.04% while Birla Sun Life Dynamic Bond Fund - Retail (G) underperformed the TDR by 3.80%.
3.Returns over the last 3 years for investors
Although the Scripbox debt fund portfolio has underperformed in last 1 year, its returns for 2 year and 3 year has been higher than the term deposit rates.
* SBI Term deposit rate prevailing in 2017-18 for respective tenure.
The above returns do not consider the tax implications. Interest from term deposits like FD is taxed as per income slabs of the individual. Debt funds held longer than 3 years are taxed at 20% of indexed gains which significantly improves the post tax returns. You can read more about taxation on debt funds in this blog.