Amid growing investor demand for low-risk, high-liquidity instruments, Capitalmind Mutual Fund is gearing up to launch its Capitalmind Liquid Fund — a short-term debt scheme designed for parking surplus cash and managing liquidity efficiently. The fund house has filed draft documents with the Securities and Exchange Board of India (SEBI), with the new fund offer (NFO) expected to open after regulatory approval.
The move comes as fund houses increasingly strengthen their presence in the debt category, following the recent entry of Jio BlackRock Mutual Fund into the liquid fund space. Industry analysts see this as part of a broader trend where newer fund managers seek to build investor confidence through safer, short-duration offerings before expanding into equity-oriented products.
Investment strategy and objectives
According to the draft scheme information document filed with SEBI, the Capitalmind Liquid Fund will invest up to 100% of its assets in debt and money market instruments with residual maturities of up to 91 days. The fund aims to provide optimal returns with high liquidity and safety, aligning with the conservative objectives typical of liquid funds.
The portfolio will include treasury bills, government securities, PSU bonds, corporate papers, commercial paper, certificates of deposit, and repos or reverse repos. It may also hold cash equivalents based on liquidity needs. At least 20% of the fund’s net assets will remain invested in highly liquid instruments such as cash, T-bills, and government securities, ensuring smooth redemption and stability.
Instruments and exclusions
As outlined in the draft, the scheme will invest in sovereign and quasi-sovereign debt, including instruments issued or guaranteed by the Government of India and state governments, along with corporate bonds and money market instruments. However, the fund will not invest in overseas securities, ReITs, InvITs, or equity-linked instruments. It will also steer clear of debt securities with special features such as AT1 or AT2 bonds, structured obligations, or short-selling activities.
Fund manager and NFO details
The Capitalmind Liquid Fund will be managed by Prateek Jain, CFA and M.Com, who also oversees the Capitalmind Flexi Cap Fund. Jain previously managed fixed-income portfolios at Invesco Asset Management and PNB Asset Management, specialising in liquid and overnight strategies, yield-curve trading, and duration management.
The NFO will be priced at ₹1,000 per unit, with a minimum investment of ₹5,000 and additional purchases in multiples of Re 1. Systematic Investment Plans (SIPs) will also start at ₹1,000, making it accessible for short-term investors seeking stability and liquidity.
With its entry into the liquid fund space, Capitalmind Mutual Fund aims to position itself as a disciplined player in the fixed-income market — offering investors a data-driven, transparent approach to short-term debt investing.
Liquid funds right now
Liquid mutual funds have become a preferred choice for investors seeking short-term parking options with relatively low risk and stable returns. A recent analysis of leading liquid funds shows that while returns remain tightly clustered, some funds have delivered slightly higher consistency across time horizons.
The top five liquid funds based on one-year returns are Franklin India Liquid Fund Super Institutional Plan, Groww Liquid Fund, Axis Liquid Fund, Aditya Birla Sun Life Liquid Fund, and PGIM India Liquid Fund. These funds have generated around 6.8% annual returns, with 6-month returns averaging near 3% and 3-year returns hovering around 7%. Over five years, the average return across these leaders stands at 5.7–5.8%, aligning with prevailing short-term interest rates.
Although the return differential between funds is marginal, the data underscores the category’s stability and suitability for conservative investors prioritising liquidity and safety over aggressive growth. Experts recommend assessing credit quality, portfolio composition, expense ratios, and fund size before investing, as these factors often influence consistency more than headline yields. For investors seeking short-term flexibility without market volatility, these top liquid funds continue to provide a reliable, regulated avenue for parking surplus cash efficiently.
Top 5 liquid funds — returns comparison
Fund (Direct) 6M Return (%) 1Y Return (%) 3Y Return (%) 5Y Return (%)
Franklin India Liquid Fund Super Institutional 3.07 6.83 7.08 5.78
Groww Liquid Fund – Direct Plan 3.05 6.82 7.01 5.67
Axis Liquid Fund – Direct Plan 3.06 6.81 7.11 5.81
Aditya Birla Sun Life Liquid Fund – Direct Plan 3.06 6.81 7.14 5.83
PGIM India Liquid Fund – Direct Plan 3.04 6.80 7.11 5.81
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