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NFO Pick – (Jio Blackrock Low Duration Fund)

24 Dec 2025 , 02:43 PM

WHAT WE UNDERSTAND BY LOW DURATION FUNDS?

Low duration funds can be seen as short-term debt funds or treasury funds with McCaulay Duration (MD) of 6 months to 1 year. One of the big advantages of a low duration fund is that it gives better returns than a bank deposit, liquid fund, or a money market fund; with only slightly higher risk. In a rising interest rate scenario, the yields will gradually rise.

What happens to low duration funds when rates fall. At the short end, the impact is more of liquidity than of interest rates or macros. However, when rates rise, these funds at the short end of the yield curve are in a position to participate on the upside too. Also, these low duration funds can trade across different bonds in a tax neutral manner. This boosts YTM.

HOW LOW DURATION FUNDS PERFORMED IN INDIA

The table captures 10 best low-duration funds ranked on 1-year returns.

Scheme Name	Returns (%) 1-Year	Returns (%) 3-Year	Returns (%) 5-Year	AUM (₹ in Crore)
HSBC Low Duration Fund	9.10	8.17	6.62	1,056.44
Kotak Low Duration Fund	7.87	7.84	6.47	15,116.21
Nippon India Low Duration Fund	7.83	7.72	6.55	11,781.53
Axis Treasury Advantage Fund	7.82	7.73	6.37	7,440.04
HDFC Low Duration Fund	7.81	7.83	6.51	24,665.60
ICICI Prudential Savings Fund	7.81	7.85	6.42	31,246.32
Aditya Birla Sun Life Low Duration Fund	7.81	7.78	6.54	15,664.72
Mirae Asset Low Duration Fund	7.80	7.66	6.24	2,627.38
Mahindra Manulife Low Duration Fund	7.70	7.73	6.32	637.33
Baroda BNP Paribas Low Duration Fund	7.68	7.63	6.30	314.24
Data Source: AMFI

There are a total of 23 low duration funds in India, of which we have considered only 20 funds with a legacy of at least 5 years. These are the top-10 low duration funds ranked by 1-year returns. Low duration funds have AUM of ₹1,54,724 crore. Here are quick averages.

The 1-year average returns for low duration funds comes to 7.73%, 3-year average returns come to 7.65%, and 5-year returns are close to 6.33%. That is good yield on a very low to moderate-risk asset class. 1-year returns have gone as high at 9.10%.

GLANCE AT JIO BLACKROCK LOW DURATION FUND

Here are key details of the Jio Blackrock Low Duration Fund.

NFO opens on January 08, 2026 and closes on January 13, 2026. It is an open-ended fund investing in high quality debt instruments with McCaulay Duration of 6 months to 1 year. On the risk-o-meter, Jio Blackrock Low Duration Fund is classified as “Low to Moderate Risk,” due to its conservative portfolio mix. There will be no exit load on this fund.
Minimum application amount in NFO is ₹500 and in multiples of ₹1 thereafter. While the interest rate risk (price risk) is minimized due to short maturities, the Jio Blackrock Low Duration Fund does have an element of default risk in it. Arun Ramachandran and Vikrant Mehta are the designated fund managers for the fund.

Let us turn to the taxation aspect.

TAX TREATMENT OF RETURNS ON THE FUND

Jio Blackrock Low Duration Fund will be classified as a non-equity fund for income tax purposes. Here are some unique points to understand.

Since the debt composition will be more than 65% in the case of Jio Blackrock Low Duration Fund, the fund will be classified as a pure debt fund and will be taxed accordingly.
Effective the Union Budget presented in May 2024, there will be no classification of long term and short term in case of debt funds. Any return earned (irrespective of holding period) will be treated as other income and taxed at incremental tax rate applicable.

This model is more favourable to persons in the low income (low tax brackets) and less favourable to people in the higher income groups.

JIO BLACKROCK LOW DURATION FUND (WHO SHOULD INVEST IN THIS FUND?)

Being a fund of very short duration, it is about parking money for short-term purposes. Here are some case studies to park funds in Jio Blackrock Low Duration Fund.

Persons looking to park funds profitably ahead of an upcoming liability in the next one year, can park funds in Low Duration Funds.
Typically, when you redeem your equity funds at an opportune time ahead of your goal-posts, these funds can be parked in a low duration fund for that interim period.
Investors planning systematic transfer plans (STP) into equity funds can use low duration funds as the risk levels are fairly low and returns stable over a short-term time horizon.
This is ideal for investors looking for parking-returns higher than bank deposits, liquid funds, and money market funds; with a very small additional risk factor.
Low Duration Funds can also be a good way for businesses to park funds meant for statutory dues, monthly payouts like rent, salaries etc.
Even individual investors can use low duration funds as part of their financial planning process to plan for short-term goals.