Mutual fund which invest only in T bills

Personal finance
1

Hi,

I want to buy Mutual funds and pledge them for trading. I don’t want to take any credit risk or duration risk. Please suggest any mutual fund which invest only in T bills.

Thanks,
Sandeep.

2

I don’t know if any fund buys exclusively T-Bills, but this comes close.

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3

Hi @sandeep_reddy_muriki Firstly its difficult for any broker to accept T-Bills for pledge due to its short maturity duration. So most of the brokers do accept G-Secs (which have good liquidity) for pledge. But if a G-Sec has a haircut of 10% (say), the mutual fund which only invests into that G-sec may not get the same haircut (also possible that MF is not in approved list of securities at the exchange). Hence, overall bad idea. So instead, buy those G-Secs and pledge them and trade on!

4

@sandeep_reddy_muriki I guess the term you are looking foris " LIquid funds".

Liquid bonds there is minimal credit risk and you can pledge as well .

if you want active participation better is G secs but on personal suggestion go for SGBs ( 1. you will get extra 2.5% interest + natural hedge against equities + you can withdraw any time + very low risk + low cost )

5

You can have a look at Parag Parikh Liquid Fund. It has almost 80% in T-Bills, which I think is highest in industry. You can go through their Latest portfolio allocations to know more.

6

Not a mutual fund but I think you are looking for liquidbees ETF

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