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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.
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.
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.
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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.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity ICICI Prudential Constant Maturity Gilt Fund Growth ₹20.9482
↑ 0.00 ₹2,196 0.1 4.7 7.1 4.4 1.2 0% SBI Magnum Constant Maturity Fund Growth ₹54.3374
↑ 0.02 ₹1,507 0.1 4.5 6.9 4.1 1.3 7.32% 6Y 6M 29D 9Y 6M 11D IDFC Government Securities Fund - Constant Maturity Plan Growth ₹38.6707
↑ 0.01 ₹303 0.1 4.5 6.8 3.6 0.7 7.27% 6Y 5M 26D 9Y 4M 24D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23 Gilt
funds having AUM/Net Assets above 100 Crore
. Sorted on Last 3 Year Return
.
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 Below is the key information for ICICI Prudential Constant Maturity Gilt Fund Returns up to 1 year are on (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 Below is the key information for SBI Magnum Constant Maturity Fund Returns up to 1 year are on (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 Below is the key information for IDFC Government Securities Fund - Constant Maturity Plan Returns up to 1 year are on 1. ICICI Prudential Constant Maturity Gilt Fund
CAGR/Annualized
return of 8.6% since its launch. Ranked 6 in 10 Yr Govt Bond
category. Return for 2022 was 1.2% , 2021 was 2.8% and 2020 was 13.6% . ICICI Prudential Constant Maturity Gilt Fund
Growth Launch Date 12 Sep 14 NAV (22 Aug 23) ₹20.9482 ↑ 0.00 (0.02 %) Net Assets (Cr) ₹2,196 on 31 Jul 23 Category Debt - 10 Yr Govt Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.39 Sharpe Ratio 0.39 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 0% Effective Maturity Modified Duration Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹11,866 31 Aug 20 ₹13,184 31 Aug 21 ₹14,003 31 Aug 22 ₹14,113 31 Aug 23 ₹15,081 Returns for ICICI Prudential Constant Maturity Gilt Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 22 Aug 23 Duration Returns 1 Month -0.2% 3 Month 0.1% 6 Month 4.7% 1 Year 7.1% 3 Year 4.4% 5 Year 8.3% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2022 1.2% 2021 2.8% 2020 13.6% 2019 12.8% 2018 9.7% 2017 2.4% 2016 16.2% 2015 6.9% 2014 2013 Fund Manager information for ICICI Prudential Constant Maturity Gilt Fund
Name Since Tenure Anuj Tagra 29 Dec 20 2.67 Yr. Rohit Lakhotia 12 Jun 23 0.22 Yr. Data below for ICICI Prudential Constant Maturity Gilt Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 12.29% Debt 87.71% Debt Sector Allocation
Sector Value Government 87.71% Cash Equivalent 12.29% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 07.18 Goi 2033
Sovereign Bonds | -49% ₹1,087 Cr 108,345,100
↑ 8,345,100 7.26% Govt Stock 2033
Sovereign Bonds | -39% ₹875 Cr 87,000,000
↓ -31,000,000 Net Current Assets
Net Current Assets | -12% ₹273 Cr Treps
CBLO/Reverse Repo | -0% ₹2 Cr 2. SBI Magnum Constant Maturity Fund
CAGR/Annualized
return of 7.8% since its launch. Ranked 1 in 10 Yr Govt Bond
category. Return for 2022 was 1.3% , 2021 was 2.4% and 2020 was 11.6% . SBI Magnum Constant Maturity Fund
Growth Launch Date 30 Dec 00 NAV (22 Aug 23) ₹54.3374 ↑ 0.02 (0.03 %) Net Assets (Cr) ₹1,507 on 31 Jul 23 Category Debt - 10 Yr Govt Bond AMC SBI Funds Management Private Limited Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.64 Sharpe Ratio 0.37 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.32% Effective Maturity 9 Years 6 Months 11 Days Modified Duration 6 Years 6 Months 29 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹11,746 31 Aug 20 ₹12,804 31 Aug 21 ₹13,497 31 Aug 22 ₹13,654 31 Aug 23 ₹14,554 Returns for SBI Magnum Constant Maturity Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 22 Aug 23 Duration Returns 1 Month -0.3% 3 Month 0.1% 6 Month 4.5% 1 Year 6.9% 3 Year 4.1% 5 Year 7.5% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2022 1.3% 2021 2.4% 2020 11.6% 2019 11.9% 2018 9.9% 2017 6.2% 2016 12.8% 2015 9.1% 2014 12.6% 2013 8.7% Fund Manager information for SBI Magnum Constant Maturity Fund
Name Since Tenure Dinesh Ahuja 25 Jan 20 3.6 Yr. Data below for SBI Magnum Constant Maturity Fund as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 0.86% Debt 99.14% Debt Sector Allocation
Sector Value Government 99.14% Cash Equivalent 0.86% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.26% Govt Stock 2033
Sovereign Bonds | -71% ₹1,077 Cr 107,000,000 7.26% Govt Stock 2032
Sovereign Bonds | -16% ₹246 Cr 24,500,000 7.54% Govt Stock 2036
Sovereign Bonds | -9% ₹131 Cr 12,800,000 GOI 02.01.2030 GOV
Sovereign Bonds | -1% ₹17 Cr 2,656,000 GOI 02.07.2030 GOV
Sovereign Bonds | -1% ₹16 Cr 2,656,000 07.18 Goi 2033
Sovereign Bonds | -1% ₹15 Cr 1,500,000
↑ 1,500,000 Net Receivable / Payable
CBLO | -1% ₹8 Cr Treps
CBLO/Reverse Repo | -0% ₹5 Cr 3. IDFC Government Securities Fund - Constant Maturity Plan
CAGR/Annualized
return of 6.5% since its launch. Ranked 2 in 10 Yr Govt Bond
category. Return for 2022 was 0.7% , 2021 was 1.8% and 2020 was 13.2% . IDFC Government Securities Fund - Constant Maturity Plan
Growth Launch Date 9 Mar 02 NAV (22 Aug 23) ₹38.6707 ↑ 0.01 (0.03 %) Net Assets (Cr) ₹303 on 31 Jul 23 Category Debt - 10 Yr Govt Bond AMC IDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.63 Sharpe Ratio 0.32 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.27% Effective Maturity 9 Years 4 Months 24 Days Modified Duration 6 Years 5 Months 26 Days Growth of 10,000 investment over the years.
Date Value 31 Aug 18 ₹10,000 31 Aug 19 ₹12,157 31 Aug 20 ₹13,450 31 Aug 21 ₹14,220 31 Aug 22 ₹14,207 31 Aug 23 ₹15,141 Returns for IDFC Government Securities Fund - Constant Maturity Plan
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 22 Aug 23 Duration Returns 1 Month -0.3% 3 Month 0.1% 6 Month 4.5% 1 Year 6.8% 3 Year 3.6% 5 Year 8.4% 10 Year 15 Year Since launch 6.5% Historical performance (Yearly) on absolute basis
Year Returns 2022 0.7% 2021 1.8% 2020 13.2% 2019 14.2% 2018 11.8% 2017 6.2% 2016 10.1% 2015 9% 2014 12.6% 2013 10.6% Fund Manager information for IDFC Government Securities Fund - Constant Maturity Plan
Name Since Tenure Harshal Joshi 15 May 17 6.3 Yr. Data below for IDFC Government Securities Fund - Constant Maturity Plan as on 31 Jul 23
Asset Allocation
Asset Class Value Cash 1.63% Debt 98.37% Debt Sector Allocation
Sector Value Government 98.37% Cash Equivalent 1.63% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.26% Govt Stock 2033
Sovereign Bonds | -97% ₹297 Cr 29,500,000 8.24% Govt Stock 2027
Sovereign Bonds | -1% ₹2 Cr 217,000 6.79% Govt Stock 2027
Sovereign Bonds | -0% ₹2 Cr 152,000 7.17% Govt Stock 2028
Sovereign Bonds | -0% ₹1 Cr 71,000 6.54% Govt Stock 2032
Sovereign Bonds | -0% ₹0 Cr 50,000 Triparty Repo
CBLO/Reverse Repo | -1% ₹4 Cr Net Current Assets
Net Current Assets | -0% ₹1 Cr Cash Margin - Ccil
CBLO | -0% ₹0 Cr
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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.