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Best 10-Year GILT Mutual Funds 2020 | Government Bond Funds

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Best 10-Year Gilt Funds 2020

Updated on January 23, 2020 , 2099 views

Gilt Funds are a type of debt Mutual Funds that predominately invest in Government Securities (G-Secs) issued by the RBI (Reserve Bank of India) on behalf of the government.

Ideally, there are two kinds of gilt funds offered to the investors, one is gilt funds that invest in government securities across maturity. And the other is 10-year gilt funds that will invest in government securities with a maturity of 10 years.

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Gilt Funds with 10-Year Constant Maturity

A gilt fund with 10-year constant maturity will invest 80 percent of its total assets in government securities. Gilt funds having an average maturity of 10 years are usually quite sensitive to interest rate changes. If suppose, you are holding these funds, and interest rates begin to rise, then there are extreme chances that these funds can give you negative returns.

10-year-gilt-funds

In contrast, the times where interest rates are expected to come down, gilt funds with higher maturity has the capability to deliver good returns. But, unlike other Debt fund, these funds are not exposed to credit risk unless the government goes bankrupt.

Investors who are planning to invest in such high maturity gilt funds, it is advisable to invest when interest rates are expected to ease down because a decrease in interest rates causes a rise in the prices of long-term gilt securities. Also, it would be convenient for an investor to shift their investment from short-term gilt securities to higher maturity when the interest rates are expected to fall.

Why Should One Invest in Gilt Mutual Funds?

Gilt debt funds tend to offer the dual benefit of security and returns. Your investments are in government Bonds and hence, there is a very little risk to the invested amount. Moreover, it also gives better returns when compared to the savings bank account.

Though gilt funds with higher maturity can be risky at times, as they are more prone to interest rate risk, but they are not affected by the credit risk. So, investors who can tolerate little risk in investment can plan to invest in gilt funds with a 10-year constant maturity.

Best Performing 10 Year Gilt Funds to Invest in 2020

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)2018 (%)Debt Yield (YTM)Mod. DurationEff. Maturity
SBI Magnum Constant Maturity Fund Growth ₹44.9293
↑ 0.07
₹5001.62.613.39.311.96.67%6Y 4M 24D9Y 10M 2D
IDFC Government Securities Fund - Constant Maturity Plan Growth ₹31.9922
↑ 0.06
₹1322.13.215.710.714.27.05%7Y 4M 20D11Y 4M 2D
ICICI Prudential Constant Maturity Gilt Fund Growth ₹16.9454
↑ 0.02
₹881.82.814.18.212.87.02%7Y 10Y 1M 6D
DSP BlackRock 10Y G-Sec Fund Growth ₹15.8281
↑ 0.02
₹441.91.612.36.210.86.87%6Y 10M 6D9Y 9M 25D
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Jan 20

1. SBI Magnum Constant Maturity Fund

(Erstwhile SBI Magnum Gilt Fund Short Term)

To provide the investors with the returns generated through investments in government securities issued by the Central Govt. and State Govt.

SBI Magnum Constant Maturity Fund is a Debt - 10 Yr Govt Bond fund was launched on 30 Dec 00. It is a fund with Moderately Low risk and has given a CAGR/Annualized return of 8.2% since its launch.  Ranked 1 in 10 Yr Govt Bond category.  Return for 2019 was 11.9% , 2018 was 9.9% and 2017 was 6.2% .

Below is the key information for SBI Magnum Constant Maturity Fund

SBI Magnum Constant Maturity Fund
Growth
Launch Date 30 Dec 00
NAV (24 Jan 20) ₹44.9293 ↑ 0.07   (0.16 %)
Net Assets (Cr) ₹500 on 31 Dec 19
Category Debt - 10 Yr Govt Bond
AMC SBI Funds Management Private Limited
Rating
Risk Moderately Low
Expense Ratio 0.75
Sharpe Ratio 1.9
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 500
Exit Load NIL
Yield to Maturity 6.67%
Effective Maturity 9 Years 10 Months 2 Days
Modified Duration 6 Years 4 Months 24 Days

Growth of 10,000 investment over the years.

DateValue
31 Dec 14₹10,000
31 Dec 15₹10,908
31 Dec 16₹12,306
31 Dec 17₹13,074
31 Dec 18₹14,368
31 Dec 19₹16,077

SBI Magnum Constant Maturity Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹209,201.
Net Profit of ₹29,201
Invest Now

Returns for SBI Magnum Constant Maturity Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month 0.7%
3 Month 1.6%
6 Month 2.6%
1 Year 13.3%
3 Year 9.3%
5 Year 9.8%
10 Year
15 Year
Since launch 8.2%
Historical performance (Yearly) on absolute basis
YearReturns
2018 11.9%
2017 9.9%
2016 6.2%
2015 12.8%
2014 9.1%
2013 12.6%
2012 8.7%
2011 9.2%
2010 8.4%
2009 5.2%
Fund Manager information for SBI Magnum Constant Maturity Fund
NameSinceTenure
Mahak Khabhia7 May 181.49 Yr.

Data below for SBI Magnum Constant Maturity Fund as on 31 Dec 19

Asset Allocation
Asset ClassValue
Cash7.23%
Debt92.77%
Debt Sector Allocation
SectorValue
Government92.77%
Cash Equivalent7.23%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
7.26% Govt Stock 2029
Sovereign Bonds | -
53%₹260 Cr25,000,000
↑ 4,000,000
GOVT STOCK
Sovereign Bonds | -
18%₹89 Cr8,500,000
↑ 8,500,000
6.68% Govt Stock 2031
Sovereign Bonds | -
17%₹83 Cr8,500,000
↓ -2,000,000
6.79% Govt Stock 2029
Sovereign Bonds | -
5%₹25 Cr2,500,000
Treps
CBLO/Reverse Repo | -
5%₹23 Cr
Net Receivable / Payable
Net Current Assets | -
3%₹12 Cr

2. IDFC Government Securities Fund - Constant Maturity Plan

(Erstwhile IDFC Government Securities Fund - Short Term Plan)

IDFC – GSF -ST is an open ended dedicated gilt scheme with an objective to generate optimal returns with high liquidity by investing Government Securities. However there is no assurance that the investment objective of the scheme will be realized.

IDFC Government Securities Fund - Constant Maturity Plan is a Debt - 10 Yr Govt Bond fund was launched on 9 Mar 02. It is a fund with Moderate risk and has given a CAGR/Annualized return of 6.7% since its launch.  Ranked 2 in 10 Yr Govt Bond category.  Return for 2019 was 14.2% , 2018 was 11.8% and 2017 was 6.2% .

Below is the key information for IDFC Government Securities Fund - Constant Maturity Plan

IDFC Government Securities Fund - Constant Maturity Plan
Growth
Launch Date 9 Mar 02
NAV (24 Jan 20) ₹31.9922 ↑ 0.06   (0.20 %)
Net Assets (Cr) ₹132 on 31 Dec 19
Category Debt - 10 Yr Govt Bond
AMC IDFC Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 0.47
Sharpe Ratio 2.17
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load NIL
Yield to Maturity 7.05%
Effective Maturity 11 Years 4 Months 2 Days
Modified Duration 7 Years 4 Months 20 Days

Growth of 10,000 investment over the years.

DateValue
31 Dec 14₹10,000
31 Dec 15₹10,899
31 Dec 16₹11,995
31 Dec 17₹12,743
31 Dec 18₹14,241
31 Dec 19₹16,256

IDFC Government Securities Fund - Constant Maturity Plan SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹212,284.
Net Profit of ₹32,284
Invest Now

Returns for IDFC Government Securities Fund - Constant Maturity Plan

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month 0.9%
3 Month 2.1%
6 Month 3.2%
1 Year 15.7%
3 Year 10.7%
5 Year 10%
10 Year
15 Year
Since launch 6.7%
Historical performance (Yearly) on absolute basis
YearReturns
2018 14.2%
2017 11.8%
2016 6.2%
2015 10.1%
2014 9%
2013 12.6%
2012 10.6%
2011 8.6%
2010 1.9%
2009 3.5%
Fund Manager information for IDFC Government Securities Fund - Constant Maturity Plan
NameSinceTenure
Harshal Joshi15 May 172.63 Yr.

Data below for IDFC Government Securities Fund - Constant Maturity Plan as on 31 Dec 19

Asset Allocation
Asset ClassValue
Cash5.52%
Debt94.48%
Debt Sector Allocation
SectorValue
Government94.48%
Cash Equivalent5.52%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
GOVT STOCK
Sovereign Bonds | -
71%₹94 Cr9,000,000
↑ 3,000,000
7.88% GS 2030
Sovereign Bonds | -
16%₹21 Cr2,000,000
↓ -1,500,000
7.59% Govt Stock 2026
Sovereign Bonds | -
8%₹10 Cr1,000,000
↑ 1,000,000
Triparty Repo
CBLO/Reverse Repo | -
2%₹3 Cr
Net Current Assets
Net Current Assets | -
2%₹3 Cr
Cash Margin - Ccil
CBLO/Reverse Repo | -
1%₹1 Cr

3. ICICI Prudential Constant Maturity Gilt Fund

The Scheme aims to provide reasonable returns by investing in portfolio of Government Securities with average maturity of around 10 years. However, there can be no assurance that the investment objective of the Scheme will be realized.

ICICI Prudential Constant Maturity Gilt Fund is a Debt - 10 Yr Govt Bond fund was launched on 12 Sep 14. It is a fund with Moderate risk and has given a CAGR/Annualized return of 10.3% since its launch.  Ranked 6 in 10 Yr Govt Bond category.  Return for 2019 was 12.8% , 2018 was 9.7% and 2017 was 2.4% .

Below is the key information for ICICI Prudential Constant Maturity Gilt Fund

ICICI Prudential Constant Maturity Gilt Fund
Growth
Launch Date 12 Sep 14
NAV (24 Jan 20) ₹16.9454 ↑ 0.02   (0.09 %)
Net Assets (Cr) ₹88 on 31 Dec 19
Category Debt - 10 Yr Govt Bond
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderate
Expense Ratio 0.33
Sharpe Ratio 1.92
Information Ratio 0
Alpha Ratio 0
Min Investment 5,000
Min SIP Investment 1,000
Exit Load 0-7 Days (0.25%),7 Days and above(NIL)
Yield to Maturity 7.02%
Effective Maturity 10 Years 1 Month 6 Days
Modified Duration 7 Years

Growth of 10,000 investment over the years.

DateValue
31 Dec 14₹10,000
31 Dec 15₹10,691
31 Dec 16₹12,418
31 Dec 17₹12,715
31 Dec 18₹13,949
31 Dec 19₹15,727

ICICI Prudential Constant Maturity Gilt Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹209,201.
Net Profit of ₹29,201
Invest Now

Returns for ICICI Prudential Constant Maturity Gilt Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month 0.8%
3 Month 1.8%
6 Month 2.8%
1 Year 14.1%
3 Year 8.2%
5 Year 9.2%
10 Year
15 Year
Since launch 10.3%
Historical performance (Yearly) on absolute basis
YearReturns
2018 12.8%
2017 9.7%
2016 2.4%
2015 16.2%
2014 6.9%
2013
2012
2011
2010
2009
Fund Manager information for ICICI Prudential Constant Maturity Gilt Fund
NameSinceTenure
Rahul Goswami12 Sep 145.31 Yr.

Data below for ICICI Prudential Constant Maturity Gilt Fund as on 31 Dec 19

Asset Allocation
Asset ClassValue
Cash4.15%
Debt95.85%
Debt Sector Allocation
SectorValue
Government95.85%
Cash Equivalent4.15%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
6.79% Govt Stock 2029
Sovereign Bonds | -
48%₹42 Cr4,250,000
7.59% Govt Stock 2029
Sovereign Bonds | -
30%₹26 Cr2,500,000
GOVT STOCK
Sovereign Bonds | -
16%₹14 Cr1,350,000
↑ 150,000
Net Current Assets
Net Current Assets | -
2%₹2 Cr
GOVT STOCK
Sovereign Bonds | -
2%₹2 Cr200,000
↑ 200,000
Treps
CBLO/Reverse Repo | -
2%₹2 Cr

4. DSP BlackRock 10Y G-Sec Fund

(Erstwhile DSP BlackRock Constant Maturity 10Y G-Sec Fund)

The investment objective of the Scheme is to seek to generate returns commensurate with risk from a portfolio of Government Securities with weighted average maturity of around 10 years. There is no assurance that the investment objective of the Scheme will be realized.

DSP BlackRock 10Y G-Sec Fund is a Debt - 10 Yr Govt Bond fund was launched on 26 Sep 14. It is a fund with Moderate risk and has given a CAGR/Annualized return of 9% since its launch.  Ranked 8 in 10 Yr Govt Bond category.  Return for 2019 was 10.8% , 2018 was 5.9% and 2017 was 2.3% .

Below is the key information for DSP BlackRock 10Y G-Sec Fund

DSP BlackRock 10Y G-Sec Fund
Growth
Launch Date 26 Sep 14
NAV (24 Jan 20) ₹15.8281 ↑ 0.02   (0.11 %)
Net Assets (Cr) ₹44 on 31 Dec 19
Category Debt - 10 Yr Govt Bond
AMC DSP BlackRock Invmt Managers Pvt. Ltd.
Rating
Risk Moderate
Expense Ratio 0.46
Sharpe Ratio 1.38
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 500
Exit Load 0-7 Days (0.1%),7 Days and above(NIL)
Yield to Maturity 6.87%
Effective Maturity 9 Years 9 Months 25 Days
Modified Duration 6 Years 10 Months 6 Days

Growth of 10,000 investment over the years.

DateValue
31 Dec 14₹10,000
31 Dec 15₹10,665
31 Dec 16₹12,314
31 Dec 17₹12,601
31 Dec 18₹13,349
31 Dec 19₹14,790

DSP BlackRock 10Y G-Sec Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹180,000
expected amount after 3 Years is ₹203,125.
Net Profit of ₹23,125
Invest Now

Returns for DSP BlackRock 10Y G-Sec Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

DurationReturns
1 Month 0.9%
3 Month 1.9%
6 Month 1.6%
1 Year 12.3%
3 Year 6.2%
5 Year 7.9%
10 Year
15 Year
Since launch 9%
Historical performance (Yearly) on absolute basis
YearReturns
2018 10.8%
2017 5.9%
2016 2.3%
2015 15.5%
2014 6.6%
2013
2012
2011
2010
2009
Fund Manager information for DSP BlackRock 10Y G-Sec Fund
NameSinceTenure
Vikram Chopra17 Jul 163.46 Yr.
Vivek Ved17 Jul 163.46 Yr.

Data below for DSP BlackRock 10Y G-Sec Fund as on 31 Dec 19

Asset Allocation
Asset ClassValue
Cash1.59%
Debt98.41%
Debt Sector Allocation
SectorValue
Government98.41%
Cash Equivalent1.59%
Credit Quality
RatingValue
AAA100%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
6.79% Govt Stock 2029
Sovereign Bonds | -
78%₹34 Cr3,350,000
↓ -650,000
7.88% GS 2030
Sovereign Bonds | -
21%₹9 Cr850,000
↑ 850,000
Treps / Reverse Repo Investments / Corporate Debt Repo
CBLO/Reverse Repo | -
1%₹0 Cr
Net Receivables/Payables
Net Current Assets | -
1%₹0 Cr

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How do 10-Year Gilt Funds Generate Returns?

Gilt funds predominately generate returns by trading the underlying instruments. Depending on the interest rate outlook, a fund manager will tend to trade in and out of gilts with varying maturities. By these means, trading returns will be generated by the fund, apart from the returns generated on the coupon (the yield).

In this manner, the fund manager takes a view on the future movement of the interest rates in the market and invests either in short-term gilt funds or gilt funds with higher maturity. When a fund manager presumes interest rates are going to fall, a major part of the portfolio will be shifted to longer-maturity securities. Also, in such market scenario, the price of the existing long-term bonds tends to rise more than those of shorter maturity gilts.

Since gilts are linked to the market on a day-to-day basis, the price movement is reflected in the Net Asset Value (NAV) of the fund. An understanding of interest rate movements and their impact on the returns (as per its duration) is essential in order to understand the potential returns that can be generated by Investing in gilt funds.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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