Gilt funds come under the category of mutual funds that invest in government securities and fall under a broader category of debt funds.
In order to comprehend gilt funds, the government securities need to be understood. Government security means a debt instrument issued by the central government or state government to generate funds for public expenses.
They are issued through the Reserve Bank of India and are referred to as gilt. Here is a detailed list of the best gilt funds in 2024.
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List of Gilt Mutual Funds in India
| Fund Name | Category | Risk | 1Y Returns | Rating | Fund Size(in Cr) |
|---|---|---|---|---|---|
| SBI Magnum Gilt Fund | Debt | Moderate | 10.4% | 5 | ₹9,500 |
| ICICI Prudential Gilt Fund | Debt | Moderate | 8.7% | 5 | ₹6,390 |
| Quant Gilt Fund | Debt | Moderate | 8.3% | 5 | ₹99 |
| IDFC Government Securities Provident Fund | Debt | Moderate | 2.4% | 4 | ₹95 |
| DSP Government Securities Fund | Debt | Moderate | 11.3% | 4 | ₹1,211 |
| DSP Gilt Fund | Debt | Moderate | 10.6% | 4 | ₹1,080 |
| PGIM India Gilt Fund | Debt | Moderate | 10.6% | 4 | ₹115 |
| DSP Government Securities Fund | Debt | Moderate | 10.7% | 4 | ₹731 |
| Debt | Moderate | 7.9% | 4 | ₹2,882 | |
| Indiabulls Gilt Fund | Debt | Low | 2.8% | 3 | ₹0 |
| Invesco India Gilt Fund | Debt | Moderate | 11.8% | 3 | ₹966 |
| Edelweiss Government Securities Fund | Debt | Moderate | 11.2% | 3 | ₹163 |
| Tata Gilt Securities Fund | Debt | Moderate | 9.4% | 3 | ₹763 |
| Axis Gilt Fund | Debt | Moderate | 11.0% | 3 | ₹503 |
| Aditya Birla Sun Life Government Securities Fund | Debt | Moderate | 10.7% | 3 | ₹2,053 |
| View All |
Who Should Invest in Gilt Funds?
The individuals who are most suited to invest in gilt funds are:
- Investors Who Seek Exposure to Debt Investments
These funds assist an investor to be part of debt investments in mutual funds. Since they only invest in government securities, it makes them a reliable source of investment.
- Investors with Zero Risk Tolerance
Given that gilt bonds hold government securities as their only underlying asset, it does not come with market risks. It can be an alternative to term deposits because it holds zero risks for the investor.
- Investors About to Retire
Investors who are about to retire usually look out for options to start investing in risk-free and reliable options. Moreover, they cannot take market-related credit risk and the strain of managing funds. Therefore, gilt funds can be a reliable option with reasonable returns and under the expertise of a fund manager.
- Investors Who Want to Balance their Portfolio
Investors who look forward to balancing their portfolios with stable and risky funds can add gilt funds to their portfolio, given that it does not carry risks.
Factors to Consider while Investing in Gilt Mutual Funds
The major attributes to be considered before investing in gilt funds are:
- Costs: The operational expenses of a specific fund may be determined by the fund manager's investing strategy. This applies even in the case of gilt funds; therefore, before you can choose a fund, you need to be aware of the expense ratio.
- Returns: This fund carries no credit risk, given that the underlying assets are government securities. However, they do carry some amount of interest rate risk based on economic conditions.
- Investment Horizon: These funds have medium to long-term maturity periods, and the average period to stay invested in this fund is three years. If you wish to invest in it, you must have an investment horizon ranging from at least 3 to 5 years.
- Taxes: Your capital gains earned from gilt funds will be taxed; although the percent will be based on your holding period, you will have to be aware of the rates.
Major Advantages
Here are some major advantages of investing inthe top gilt mutual funds–
Low credit risk:Since gilt funds invest in government bonds and securities, they carry minimal credit risks, unlike mutual funds that invest in corporate bonds.
Capital protection: Chances of capital loss with the best gilt funds is minimal as they invest significantly in government-backed securities.
Reasonable returns: Gilt funds offer significant returns over a mid to long period.
Flexible investment modes: One can invest in gilt funds in one of two ways – SIP and lump sum. A Systematic Investment Plan is where investors deposit a fixed sum periodically. This sum can be as low as Rs.100. The lump-sum mode requires one to deposit their investment only once.
Risks Involved While Investing in Gilt Mutual Funds
Here are the core risks that may be associated with best performing gilt funds-
- Interest Rate Risk
Bond prices always have an inverse correlation with the interest rate movement. This states that if the interest rate increases, then the price of the bond decreases, and vice-versa. The sensitivity of the price of the debt instruments to fluctuation is known as interest rate risk.
- Duration Risk
Longest-duration gilt funds have the highest duration risks because the maturities of gilt funds range from 90 days to more than 30 years. Longer-term gilt funds carry higher duration risks, although if the intention is to hold the bond to maturity, this risk is often mitigated.
FAQs
Q1. What is the meaning of a gilt fund?
Gilt funds come from the category of debt funds but invest exclusively in bonds and fixed interest-bearing securities that are issued by the government.
Q2. Is a gilt fund better than a fixed deposit?
Though gilt funds could easily beat a 10-year bank fixed deposit rate over the long tenure, it cannot be assured that they are not market-linked. So, considering these, you will have to consider the viability of a gilt fund and if it matches your financial goals.
Q3. Are gilt funds a good investment?
Gilt funds are typically the most lucrative since interest rates have room to decline, giving opportunities for capital gains.
Q4. What is the difference between a gilt fund and a debt fund?
Gilt funds are a type of debt mutual fund, but gilt funds invest only in bonds and fixed interest-bearing securities that are issued by the state and central governments.
Q5. What is the difference between a gilt fund and a gold fund?
Gilt funds are those securities that are issued by the Indian government. Gold funds are the investment funds that hold assets related to gold.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Let's have a closer look
Now let us jump and check about these top 15 mutual fund schemes.
SBI Magnum Gilt Fund Direct Growth
Fund Performance: The SBI Magnum Gilt Fund has given 7.19% annualized returns in the past three years and 7.78% in the last 5 years. The SBI Magnum Gilt Fund comes under the Debt category of SBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in SBI Magnum Gilt Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹9,500Cr |
| 1Y Returns | 10.4% |
ICICI Prudential Gilt Fund Direct Plan Growth
Fund Performance: The ICICI Prudential Gilt Fund has given 6.65% annualized returns in the past three years and 7.92% in the last 5 years. The ICICI Prudential Gilt Fund comes under the Debt category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Gilt Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹6,390Cr |
| 1Y Returns | 8.7% |
Quant Gilt Fund Direct Growth
Fund Performance: The Quant Gilt Fund comes under the Debt category of Quant Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Quant Gilt Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹99Cr |
| 1Y Returns | 8.3% |
IDFC Government Securities Provident Direct Growth
Fund Performance: The IDFC Government Securities Provident Fund has given 7.86% annualized returns in the past three years and 8.97% in the last 5 years. The IDFC Government Securities Provident Fund comes under the Debt category of IDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in IDFC Government Securities Provident Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹95Cr |
| 1Y Returns | 2.4% |
DSP Government Securities Direct Plan Growth
Fund Performance: The DSP Government Securities Fund has given 6.96% annualized returns in the past three years and 7.93% in the last 5 years. The DSP Government Securities Fund comes under the Debt category of DSP Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in DSP Government Securities Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹1,211Cr |
| 1Y Returns | 11.3% |
DSP Gilt Direct Plan Growth
Fund Performance: The DSP Gilt Fund has given 6.76% annualized returns in the past three years and 7.62% in the last 5 years. The DSP Gilt Fund comes under the Debt category of DSP Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in DSP Gilt Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹1,080Cr |
| 1Y Returns | 10.6% |
PGIM India Gilt Direct Plan Growth
Fund Performance: The PGIM India Gilt Fund has given 6.55% annualized returns in the past three years and 6.98% in the last 5 years. The PGIM India Gilt Fund comes under the Debt category of PGIM India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in PGIM India Gilt Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹115Cr |
| 1Y Returns | 10.6% |
DSP Government Securities Direct Plan Growth
Fund Performance: The DSP Government Securities Fund has given 6.47% annualized returns in the past three years and 8.78% in the last 5 years. The DSP Government Securities Fund comes under the Debt category of DSP Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in DSP Government Securities Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹731Cr |
| 1Y Returns | 10.7% |
Fund Performance: The Kotak Gilt Investment PF & Trust Fund has given 5.12% annualized returns in the past three years and 8.45% in the last 5 years. The Kotak Gilt Investment PF & Trust Fund comes under the Debt category of Kotak Mahindra Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Kotak Gilt Investment PF & Trust Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹2,882Cr |
| 1Y Returns | 7.9% |
Indiabulls Gilt Fund Direct Growth
Fund Performance: The Indiabulls Gilt Fund has given 7.44% annualized returns in the past three years and 9.22% in the last 5 years. The Indiabulls Gilt Fund comes under the Debt category of Indiabulls Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Indiabulls Gilt Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹0Cr |
| 1Y Returns | 2.8% |
Invesco India Gilt Fund Direct Growth
Fund Performance: The Invesco India Gilt Fund has given 6.75% annualized returns in the past three years and 6.32% in the last 5 years. The Invesco India Gilt Fund comes under the Debt category of Invesco Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Invesco India Gilt Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹966Cr |
| 1Y Returns | 11.8% |
Edelweiss Government Securities Fund Direct Growth
Fund Performance: The Edelweiss Government Securities Fund has given 6.49% annualized returns in the past three years and 7.79% in the last 5 years. The Edelweiss Government Securities Fund comes under the Debt category of Edelweiss Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Edelweiss Government Securities Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹163Cr |
| 1Y Returns | 11.2% |
Tata Gilt Securities Fund Direct Growth
Fund Performance: The Tata Gilt Securities Fund has given 6.47% annualized returns in the past three years and 6.6% in the last 5 years. The Tata Gilt Securities Fund comes under the Debt category of Tata Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Tata Gilt Securities Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹763Cr |
| 1Y Returns | 9.4% |
Axis Gilt Fund Direct Plan Growth
Fund Performance: The Axis Gilt Fund has given 6.47% annualized returns in the past three years and 7.49% in the last 5 years. The Axis Gilt Fund comes under the Debt category of Axis Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Axis Gilt Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹503Cr |
| 1Y Returns | 11.0% |
Aditya Birla Sun Life Government Securities Fund Direct Plan Growth
Fund Performance: The Aditya Birla Sun Life Government Securities Fund has given 6.45% annualized returns in the past three years and 7.43% in the last 5 years. The Aditya Birla Sun Life Government Securities Fund comes under the Debt category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Government Securities Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹2,053Cr |
| 1Y Returns | 10.7% |
