CRISIL Ultra Short-Term Bond Fund Index

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The CRISIL Ultra Short-Term Bond Fund Index is a fixed income benchmark published by CRISIL Research (a division of CRISIL Limited, majority-owned by S&P Global) designed to represent the performance of an investment portfolio with a Macaulay duration of 3-6 months – the precise range mandated by SEBI for the ultra short duration debt mutual fund category. The index bridges the gap between the very short-dated CRISIL Liquid Fund Index (maturity up to 91 days) and the CRISIL Short-Term Bond Fund Index (Macaulay duration 1-3 years).

Publisher

CRISIL Limited is India’s premier credit rating and analytical services company. CRISIL Research administers the CRISIL fixed income index family and has published bond benchmarks for the Indian mutual fund market since the late 1990s.

Composition and methodology

The CRISIL Ultra Short-Term Bond Fund Index is built from a blend of short-dated instruments:

Instrument typeApproximate weight
Commercial paper (CP), A1+ rated20-35%
Certificates of deposit (CD), A1+ rated15-25%
Short-term government securities (3-12 months)25-40%
Short-dated AAA-rated corporate bonds (3-12 months)10-20%
T-bills5-15%

Methodology features:

  • Index type: total return (price + accrual), computed daily.
  • Duration target: Macaulay duration 3-6 months; modified duration approximately 0.25-0.50 years.
  • Valuation: FIMMDA/NDS-OM prices and matrix pricing.
  • Rebalancing: monthly, rolling instruments out as they approach very short maturities and incorporating newly issued instruments entering the eligible maturity window.
  • Credit quality: investment grade, with a strong tilt towards the highest short-term ratings (A1+/AAA).
IndexMacaulay durationPrincipal risk
CRISIL Liquid Fund Index30-60 daysNear-zero rate risk
CRISIL Ultra Short-Term Bond Fund Index3-6 monthsVery low rate risk
CRISIL Short-Term Bond Fund Index1-3 yearsModerate rate risk
CRISIL Composite Bond Fund Index3-7 yearsSignificant rate risk

Ultra short-term bond funds accept marginally higher rate risk compared with liquid funds but remain among the most conservative category of actively managed debt funds. A 100 basis point yield movement would change the index level by approximately 0.25-0.50%, compared with less than 0.2% for the Liquid Fund Index and 1.5-2.5% for the Short-Term Bond Fund Index.

Historical returns

PeriodApproximate CRISIL Ultra Short-Term Bond Fund Index CAGR
1-year (FY2024-25)6.8-7.8%
3-year CAGR (2022-25)5.5-7.0%
5-year CAGR (2020-25)5.0-6.5%
10-year CAGR (2015-25)6.5-7.5%

Returns exceed liquid fund returns by approximately 20-60 basis points in most periods, reflecting the yield pickup from holding slightly longer-dated instruments and from the credit spread of commercial paper and certificates of deposit over government securities.

Mutual fund schemes

The CRISIL Ultra Short-Term Bond Fund Index is used as the benchmark for:

  • Ultra short duration funds: SEBI-mandated Macaulay duration of 3-6 months. Examples: Aditya Birla Sun Life Savings Fund, ICICI Prudential Ultra Short Term Fund, Nippon India Ultra Short Duration Fund, Kotak Savings Fund.
  • Low duration funds: sometimes use this index or a blended benchmark; SEBI defines low duration as 6-12 month Macaulay duration.

Ultra short-term funds are popular with:

  • Retail investors seeking better post-tax returns than savings accounts.
  • Corporate treasurers managing 3-12 month cash positions.
  • Investors bridging between liquid and longer-duration debt funds.

See also

References

  1. CRISIL Research. “CRISIL Fixed Income Indices Methodology.” crisil.com. Accessed 2026.
  2. SEBI. Circular SEBI/HO/IMD/DF3/CIR/P/2017/114 on mutual fund categorisation.
  3. SEBI. Circular SEBI/HO/IMD/DF3/CIR/P/2018/04 on TRI benchmarks.
  4. AMFI. “Debt category benchmark data.” amfiindia.com. 2025.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

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