Why these four
Of the 20 short duration funds with a published average AUM for the July–September 2026 quarter, these four are the largest: ICICI Prudential Short Term, HDFC Short Term, Kotak Short Term, and SBI Short Term. Together they hold ₹62,091 crore, 65% of the category. Short duration funds hold bonds whose average life is one to three years. That is long enough for interest-rate moves to show in the NAV and short enough that a bad year is usually modest. Every figure is for the Direct plan, Growth option, from NAVs to 22 October 2026.
| Fund | Average AUM, July–September 2026 (₹ crore) | Share of category | Direct plan expense ratio |
|---|---|---|---|
| ICICI Prudential Short Term | 19,244 | 20.1% | 0.45% |
| HDFC Short Term | 14,819 | 15.5% | 0.39% |
| Kotak Short Term | 14,379 | 15.1% | 0.3827% |
| SBI Short Term | 13,649 | 14.3% | 0.42% |
Returns
| Fund | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| ICICI Prudential Short Term | 4.88% | 7.49% | 6.97% | 7.62% |
| HDFC Short Term | 4.26% | 7.23% | 6.44% | 7.23% |
| Kotak Short Term | 4.30% | 7.25% | 6.33% | 7.15% |
| SBI Short Term | 4.00% | 7.07% | 6.27% | 6.92% |
| Category median | 4.34% | 7.24% | 6.33% | 6.92% |
Returns of a year or more are compounded annual rates. Over three years ICICI Prudential Short Term led at 7.49% and SBI Short Term was lowest at 7.07%, a gap of 0.42 points a year against a category median of 7.24%. All four were positive over one year.
Calendar years
| Year | ICICI Prudential Short Term | HDFC Short Term | Kotak Short Term | SBI Short Term | Category median |
|---|---|---|---|---|---|
| 2022 | 5.44% | 3.98% | 3.85% | 4.05% | 3.85% |
| 2023 | 8.10% | 7.59% | 7.31% | 7.26% | 7.31% |
| 2024 | 8.45% | 8.51% | 8.56% | 8.27% | 8.43% |
| 2025 | 8.61% | 8.19% | 8.09% | 8.23% | 8.13% |
| 2026 to 22 Oct | 3.73% | 3.31% | 3.45% | 3.17% | 3.47% |
The four funds were never more than 1.59 points apart in any calendar year, so fees and duration matter more than which year you look at. A dash means the fund did not hold a full record for that year.
Risk
| Fund | Volatility (3 yr) | Worst fall (3 yr) | Sharpe ratio | Now vs peak |
|---|---|---|---|---|
| ICICI Prudential Short Term | 0.95% | −0.57% | 1.05 | −0.57% |
| HDFC Short Term | 0.94% | −0.60% | 0.77 | −0.60% |
| Kotak Short Term | 0.97% | −0.52% | 0.78 | −0.39% |
| SBI Short Term | 0.97% | −0.49% | 0.59 | −0.49% |
| Category median | 0.97% | −0.56% | 0.71 | −0.43% |
HDFC Short Term was the steadiest of the four on three-year volatility (0.94%) and Kotak Short Term the bumpiest (0.97%). Volatility is the annualised standard deviation of daily returns; the worst fall is the deepest peak-to-trough drop in the last three years. The Sharpe ratio uses a 6.5% risk-free rate.
What a monthly SIP earned
| Fund | 3-year SIP return (a year) | 5-year SIP return (a year) |
|---|---|---|
| ICICI Prudential Short Term | 6.56% | 7.16% |
| HDFC Short Term | 6.14% | 6.73% |
| Kotak Short Term | 6.19% | 6.71% |
| SBI Short Term | 6.05% | 6.58% |
| Category median | 6.23% | 6.73% |
SIP returns are annualised (XIRR) for ₹10,000 a month. They differ from lump-sum returns because each instalment buys at a different price.
Cost
Among the four, Kotak Short Term charged the lowest Direct expense ratio at 0.3827% and ICICI Prudential Short Term the highest at 0.45%. On a ₹10 lakh holding that is a difference of ₹673 a year. Expense ratios are deducted from the NAV every day, so they are already inside the returns shown above.
Reading the comparison
- Size is not a verdict. These are the largest funds in the category, not the best; a fund's rank by AUM says nothing about its rank by return.
- Three years is a short window for an equity fund. A fund that led while yields fell may lag when they rise.
- Returns are historical, computed from NAVs, and not a forecast.
- This is not a recommendation to buy or sell any fund.
- Short duration fund returns in October 2026
- Short duration against corporate bond funds
- All short duration funds
Source: AMFI NAVs to 22 October 2026; AMFI average AUM for July–September 2026; fund houses' TER disclosures.
Frequently asked questions
Which is the biggest short duration fund in India?
By average AUM for July–September 2026, ICICI Prudential Short Term at about ₹19,244 crore, ahead of HDFC Short Term (₹14,819 crore), Kotak Short Term (₹14,379 crore) and SBI Short Term (₹13,649 crore).
Which of the four biggest short duration funds has the best 3-year return?
ICICI Prudential Short Term, at 7.49% a year to 22 October 2026, against 7.07% for SBI Short Term and a category median of 7.24%. Direct plan, Growth option.
Which has the lowest expense ratio?
Kotak Short Term, at 0.3827% for the Direct plan; ICICI Prudential Short Term charges 0.45%.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are WealthTicker’s own calculations from public data — AMFI’s fund NAVs and disclosures, NSE’s index and FII/DII files, and the fund houses’ monthly portfolios (how we calculate). They are as of the dates stated and can be revised by their source.
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