+91-22-48913909Top 6 Best Gilt Funds To Invest In 2026
Want to invest during falling interest rates? Gilt Funds in India are an answer to this!
Gilt Mutual Funds provide good returns during times of falling interest rates depending upon its maturity (or duration). Investors Investing in these funds need to have enough time for tracking their investments since the NAVs of these funds move very sharply with movement in interest rates.
Gilts funds are often used by two kinds of investors. Firstly, those who primarily want little or no credit risk, since the securities are backed by the government of India (or the government of the country they belong to) hence they carry least possible credit risk.
How To Choose Best Gilt Debt Mutual Funds?
1. Duration And Average Maturity
When investing in gilt debt funds, it becomes necessary to determine the average maturity and the duration of the fund. This can be obtained in the fact sheet of the fund, the average maturity relates to the average time taken for securities to mature. The higher the average maturity (or duration), the higher the sensitivity to interest rate movement. While a downward movement is positive to the NAV of the fund (and hence returns), and upward (or increase) movement of interest rates will impact the NAV negatively resulting in a loss.
Duration refers to the weighted average maturity of the securities in a Portfolio. It is a prime parameter used by analysts and others to determine the interest rate sensitivity of the mutual fund. If the funds are held for the time of duration of the portfolio and the fund manager does not do anything, then the investor will generate the yield on the portfolio, without being subjected to interest rate movements. Gilts funds are often used by two kinds of investors. Firstly, those who primarily want little or no credit risk, since the securities are backed by the government of India (or the government of the country they belong to), these investors invest for the yield and not for a view on interest rates. The other kind of investors who invest in Gilt Funds are the ones who take a view on interest rates, they would typically look at the maturity or duration of the portfolio and invest accordingly.
There are primarily three kinds of gilt funds that exist, short term, medium term and long term. Short term gilt funds have a low duration, typically less than a year. Long-term gilt funds can have a very high maturity period, at times going up to 10 to 15 years also. Long-term gilt funds are invested in for yield as well as playing the interest rate view by investors.
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2. Interest Rate Risk
Gilt funds and interest rates are archrivals. There is an inverse relationship between Gilt debt funds and interest rates. An increase or decrease in the interest rate causes the NAV of the fund to fall or rise. This results in the fluctuation in the fund’s return. In fact, such extreme Volatility in returns of the gilt funds makes them the riskiest in the debt mutual category. The impact is so profound that it may drive the yields to negative in the short run. Therefore, one should consider investing in gilt funds when inflation is near its peak and the RBI (Reserve Bank of India) is not likely to raise the interest rate immediately. This would ensure there no downward movement in the NAV and hence returns. Any fall in interest rates would add to the returns of the fund.
A newbie investor should avoid investing in gilt mutual funds without a robust strategy.
Moreover, there are some other quantitative parameters that investors need to analyse before selecting the best Gilt Funds:
Look for a Gilt Fund that gives the most stable and consistent returns year-after-year. A fund having lesser volatility would be consistent. Volatility can be determined using the Beta and Standard Deviation (SD). Beta indicates how much fund’s return is sensitive to index movements. A beta of 1 signifies that the mutual fund NAV moves in line with the relevant benchmark, a beta of a greater than 1 designates that the NAV moves more than the relevant benchmark of the fund, and a beta of less than 1 means NAV moves less than the benchmark. Investors should decide before getting into a fund whether they want higher beta or low beta.Coming to SD, it is a statistical measure representing the volatility or risk of a fund. The higher the SD, higher will be the fluctuations in the returns. Ideally, investors look for funds with a lower standard deviation. However, if the investor is clear on the reason of investing and has reviewed the fund performance as well as portfolio & related parameters (yield, duration, maturity etc), this is something one can overlook.
The expense ratio is also one of the parameters to check your fund returns. It is advisable to go for a fund with a lower expense ratio in the same category. This is because the returns are derived after deducting expense ratio from the fund’s total return. Thus, the lower the expense ratio, the better returns it can deliver.
One needs to be careful in the entry and exit of their investments accurately. More importantly, considering important parameters to shortlist or invest in the best Gilt funds can be an optimal way to strengthen your portfolio. We take you to some of those parameters, following the best Gilt funds or Best Performing Mutual Funds to Invest in 2026.
Fund Selection Methodology used to find 6 funds
Best Gilt Funds To Invest In FY 26 - 27
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2024 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity UTI Gilt Fund Growth ₹65.5791
↑ 0.00 ₹423 1.1 2.1 5.1 6.4 5.1 6.12% 3Y 1M 6D 7Y ICICI Prudential Gilt Fund Growth ₹107.924
↑ 0.00 ₹8,890 2.7 2.4 4.8 6.7 6.8 7.47% 9Y 5M 12D 21Y 5M 1D SBI Magnum Constant Maturity Fund Growth ₹66.427
↑ 0.03 ₹1,637 2.1 1.7 3.9 6.8 6.7 6.95% 6Y 9M 7D 9Y 6M SBI Magnum Gilt Fund Growth ₹68.2136
↑ 0.01 ₹8,306 1.7 1.9 3.8 6.1 4.5 7.12% 8Y 1M 20D 23Y 5M 1D Nippon India Gilt Securities Fund Growth ₹38.9752
↑ 0.01 ₹1,552 2.5 2.1 3.6 5.7 3.7 7.31% 9Y 9M 23Y 8M 5D Canara Robeco Gilt Fund Growth ₹76.9606
↑ 0.06 ₹122 1.8 1.7 2.8 5.4 3.6 6.46% 3Y 9M 17D 6Y 6M 3D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 4 Sep 26 Research Highlights & Commentary of 6 Funds showcased
Commentary UTI Gilt Fund ICICI Prudential Gilt Fund SBI Magnum Constant Maturity Fund SBI Magnum Gilt Fund Nippon India Gilt Securities Fund Canara Robeco Gilt Fund Point 1 Bottom quartile AUM (₹423 Cr). Highest AUM (₹8,890 Cr). Upper mid AUM (₹1,637 Cr). Upper mid AUM (₹8,306 Cr). Lower mid AUM (₹1,552 Cr). Bottom quartile AUM (₹122 Cr). Point 2 Established history (24+ yrs). Oldest track record among peers (27 yrs). Established history (25+ yrs). Established history (25+ yrs). Established history (18+ yrs). Established history (26+ yrs). Point 3 Top rated. Rating: 4★ (upper mid). Rating: 4★ (upper mid). Rating: 4★ (lower mid). Rating: 4★ (bottom quartile). Rating: 4★ (bottom quartile). Point 4 Risk profile: Moderate. Risk profile: Moderate. Risk profile: Moderately Low. Risk profile: Moderate. Risk profile: Moderate. Risk profile: Moderate. Point 5 1Y return: 5.14% (top quartile). 1Y return: 4.77% (upper mid). 1Y return: 3.94% (upper mid). 1Y return: 3.83% (lower mid). 1Y return: 3.60% (bottom quartile). 1Y return: 2.79% (bottom quartile). Point 6 1M return: -0.37% (bottom quartile). 1M return: -0.21% (lower mid). 1M return: -0.36% (bottom quartile). 1M return: -0.06% (upper mid). 1M return: -0.19% (upper mid). 1M return: 0.10% (top quartile). Point 7 Sharpe: -0.35 (upper mid). Sharpe: -0.29 (top quartile). Sharpe: -0.45 (upper mid). Sharpe: -0.64 (bottom quartile). Sharpe: -0.56 (lower mid). Sharpe: -1.06 (bottom quartile). Point 8 Information ratio: 0.00 (top quartile). Information ratio: 0.00 (upper mid). Information ratio: 0.00 (upper mid). Information ratio: 0.00 (lower mid). Information ratio: 0.00 (bottom quartile). Information ratio: 0.00 (bottom quartile). Point 9 Yield to maturity (debt): 6.12% (bottom quartile). Yield to maturity (debt): 7.47% (top quartile). Yield to maturity (debt): 6.95% (lower mid). Yield to maturity (debt): 7.12% (upper mid). Yield to maturity (debt): 7.31% (upper mid). Yield to maturity (debt): 6.46% (bottom quartile). Point 10 Modified duration: 3.10 yrs (top quartile). Modified duration: 9.45 yrs (bottom quartile). Modified duration: 6.77 yrs (upper mid). Modified duration: 8.14 yrs (lower mid). Modified duration: 9.75 yrs (bottom quartile). Modified duration: 3.80 yrs (upper mid). UTI Gilt Fund
ICICI Prudential Gilt Fund
SBI Magnum Constant Maturity Fund
SBI Magnum Gilt Fund
Nippon India Gilt Securities Fund
Canara Robeco Gilt Fund
(Erstwhile UTI Gilt Advantage Fund- LTP) To generate credit risk-free return through investment in sovereign securities issued by the Central Government and / or a State Government and / or any security unconditionally guaranteed by the Central Government and / or a State Government for repayment of principal and interest. However there can be no assurance that the investment objective of the Scheme will be achieved. Below is the key information for UTI Gilt Fund Returns up to 1 year are on (Erstwhile ICICI Prudential Long Term Gilt Fund) To generate income through investment in Gilts of various maturities. Research Highlights for ICICI Prudential Gilt Fund Below is the key information for ICICI Prudential 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. Research Highlights for SBI Magnum Constant Maturity Fund Below is the key information for SBI Magnum Constant Maturity Fund Returns up to 1 year are on (Erstwhile SBI Magnum Gilt Fund - Long Term Plan) To provide the investors with returns generated through investments in government securities issued by the Central Government and / or a State Government Research Highlights for SBI Magnum Gilt Fund Below is the key information for SBI Magnum Gilt Fund Returns up to 1 year are on The primary investment objective of the scheme is to generate optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the Central Government and State Government. Research Highlights for Nippon India Gilt Securities Fund Below is the key information for Nippon India Gilt Securities Fund Returns up to 1 year are on (Erstwhile Canara Robeco GILT PGS) To provide risk free return (except interest rate risk) and long term capital
appreciation by investing only in Govt. Securities. However, there can be no assurance that the investment objective of the scheme will be realized. Research Highlights for Canara Robeco Gilt Fund Below is the key information for Canara Robeco Gilt Fund Returns up to 1 year are on 1. UTI Gilt Fund
UTI Gilt Fund
Growth Launch Date 21 Jan 02 NAV (04 Sep 26) ₹65.5791 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹423 on 31 Jul 26 Category Debt - Government Bond AMC UTI Asset Management Company Ltd Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.92 Sharpe Ratio -0.35 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.12% Effective Maturity 7 Years Modified Duration 3 Years 1 Month 6 Days Growth of 10,000 investment over the years.
Date Value Returns for UTI Gilt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month -0.4% 3 Month 1.1% 6 Month 2.1% 1 Year 5.1% 3 Year 6.4% 5 Year 5.4% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2024 5.1% 2023 8.9% 2022 6.7% 2021 2.9% 2020 2.3% 2019 10.3% 2018 11.8% 2017 6.3% 2016 4.3% 2015 15.5% Fund Manager information for UTI Gilt Fund
Name Since Tenure Data below for UTI Gilt Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 2. ICICI Prudential Gilt Fund
ICICI Prudential Gilt Fund
Growth Launch Date 19 Aug 99 NAV (04 Sep 26) ₹107.924 ↑ 0.00 (0.00 %) Net Assets (Cr) ₹8,890 on 31 Jul 26 Category Debt - Government Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆ Risk Moderate Expense Ratio 1.09 Sharpe Ratio -0.29 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.47% Effective Maturity 21 Years 5 Months 1 Day Modified Duration 9 Years 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value Returns for ICICI Prudential Gilt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month -0.2% 3 Month 2.7% 6 Month 2.4% 1 Year 4.8% 3 Year 6.7% 5 Year 6.1% 10 Year 15 Year Since launch 9.2% Historical performance (Yearly) on absolute basis
Year Returns 2024 6.8% 2023 8.2% 2022 8.3% 2021 3.7% 2020 3.8% 2019 12.6% 2018 10.8% 2017 6.8% 2016 2.1% 2015 18.2% Fund Manager information for ICICI Prudential Gilt Fund
Name Since Tenure Data below for ICICI Prudential Gilt Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 3. SBI Magnum Constant Maturity Fund
SBI Magnum Constant Maturity Fund
Growth Launch Date 30 Dec 00 NAV (04 Sep 26) ₹66.427 ↑ 0.03 (0.04 %) Net Assets (Cr) ₹1,637 on 31 Jul 26 Category Debt - 10 Yr Govt Bond AMC SBI Funds Management Private Limited Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.63 Sharpe Ratio -0.45 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.95% Effective Maturity 9 Years 6 Months Modified Duration 6 Years 9 Months 7 Days Growth of 10,000 investment over the years.
Date Value Returns for SBI Magnum Constant Maturity Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month -0.4% 3 Month 2.1% 6 Month 1.7% 1 Year 3.9% 3 Year 6.8% 5 Year 5.5% 10 Year 15 Year Since launch 7.7% Historical performance (Yearly) on absolute basis
Year Returns 2024 6.7% 2023 9.1% 2022 7.5% 2021 1.3% 2020 2.4% 2019 11.6% 2018 11.9% 2017 9.9% 2016 6.2% 2015 12.8% Fund Manager information for SBI Magnum Constant Maturity Fund
Name Since Tenure Data below for SBI Magnum Constant Maturity Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 4. SBI Magnum Gilt Fund
SBI Magnum Gilt Fund
Growth Launch Date 30 Dec 00 NAV (04 Sep 26) ₹68.2136 ↑ 0.01 (0.01 %) Net Assets (Cr) ₹8,306 on 31 Jul 26 Category Debt - Government Bond AMC SBI Funds Management Private Limited Rating ☆☆☆☆ Risk Moderate Expense Ratio 0.94 Sharpe Ratio -0.64 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.12% Effective Maturity 23 Years 5 Months 1 Day Modified Duration 8 Years 1 Month 20 Days Growth of 10,000 investment over the years.
Date Value Returns for SBI Magnum Gilt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month -0.1% 3 Month 1.7% 6 Month 1.9% 1 Year 3.8% 3 Year 6.1% 5 Year 5.7% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2024 4.5% 2023 8.9% 2022 7.6% 2021 4.2% 2020 3% 2019 11.7% 2018 13.1% 2017 5.1% 2016 3.9% 2015 16.3% Fund Manager information for SBI Magnum Gilt Fund
Name Since Tenure Data below for SBI Magnum Gilt Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 5. Nippon India Gilt Securities Fund
Nippon India Gilt Securities Fund
Growth Launch Date 22 Aug 08 NAV (04 Sep 26) ₹38.9752 ↑ 0.01 (0.02 %) Net Assets (Cr) ₹1,552 on 31 Jul 26 Category Debt - Government Bond AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Moderate Expense Ratio 1.28 Sharpe Ratio -0.56 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-15 Days (0.25%),15 Days and above(NIL) Yield to Maturity 7.31% Effective Maturity 23 Years 8 Months 5 Days Modified Duration 9 Years 9 Months Growth of 10,000 investment over the years.
Date Value Returns for Nippon India Gilt Securities Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month -0.2% 3 Month 2.5% 6 Month 2.1% 1 Year 3.6% 3 Year 5.7% 5 Year 4.8% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2024 3.7% 2023 8.9% 2022 6.7% 2021 2.1% 2020 1.8% 2019 11.2% 2018 12.4% 2017 8% 2016 3.4% 2015 17% Fund Manager information for Nippon India Gilt Securities Fund
Name Since Tenure Data below for Nippon India Gilt Securities Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 6. Canara Robeco Gilt Fund
Canara Robeco Gilt Fund
Growth Launch Date 29 Dec 99 NAV (04 Sep 26) ₹76.9606 ↑ 0.06 (0.07 %) Net Assets (Cr) ₹122 on 31 Jul 26 Category Debt - Government Bond AMC Canara Robeco Asset Management Co. Ltd. Rating ☆☆☆☆ Risk Moderate Expense Ratio 1.24 Sharpe Ratio -1.06 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 6.46% Effective Maturity 6 Years 6 Months 3 Days Modified Duration 3 Years 9 Months 17 Days Growth of 10,000 investment over the years.
Date Value Returns for Canara Robeco Gilt Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 4 Sep 26 Duration Returns 1 Month 0.1% 3 Month 1.8% 6 Month 1.7% 1 Year 2.8% 3 Year 5.4% 5 Year 4.7% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2024 3.6% 2023 8.8% 2022 6.5% 2021 2.3% 2020 1.8% 2019 10.3% 2018 9.9% 2017 4.9% 2016 2.9% 2015 18% Fund Manager information for Canara Robeco Gilt Fund
Name Since Tenure Data below for Canara Robeco Gilt Fund as on 31 Jul 26
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity
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Conclusion
If you want to invest in gilt mutual funds, then you need to invest opportunistically. An essential thing about investing in the best Gilt Funds is to strategies well. Having a strategy would help you to avoid perilous situations. Investing in these funds demands an ability to take a view on what the RBI may do in its credit risk policy and a call on interest rate movements.
FAQs
1. Who releases the gilt funds?
A: The gilt funds are in the form of securities released by the Reserve Bank of India. The RBI releases the g-sec or the securities, which are in the form of funds. These, when matured, are distributed amongst the investors in the form of payouts.
2. What are the returns that I can expect on the gilt funds?
A: Gilt funds are one of the safest investments, and you can expect good returns. However, the interest payable is dependent upon the market conditions. You can expect returns of up to 12% on your investments.
3. Do gilt funds have an expense ratio?
A: Gilt funds behave like mutual funds, and hence, there is an expense ratio. In other words, there will be certain operational costs that the investor has to bear when it comes to gilt funds. The expense ratio will be a percentage of the total investment value. Your fund manager can tell you about the amount of money that will be considered expense ratio.
4. Is there a specific time limit for which I should hold my gilt funds?
A: Like any other mutual fund, it is a good idea to hold your investment in gilt funds for 3-5 years. This is adequate time for you to realize your investment.
5. Can I create wealth by investing in gilt funds?
A: You can invest in the gilt funds and generate wealth over a medium to moderate period. After that, you can divert your earnings into other investments. Thus, gilt funds can be used to create wealth as these are known to generate wealth.
6. What financial goal can gilt funds help me achieve?
A: If you are looking to earn on your investments over a reasonable period and increase your wealth in the medium-term, it is good to invest in gilt funds. These funds do not need you to invest in the long-term, and you can realize your investments in 3-5 years.
7. Is a gilt fund taxable?
A: You will have to pay tax on long-term Capital Gains if you sell the gilt funds before maturity. The capital gain from the fund is also taxable. If you stay invested in the fun for a short period, which is three years, then you will have to pay taxes for short-term capital gains. If you stay invested in the gilt fund for the given amount of time, you will have to pay tax under long-term capital gains.
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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Research Highlights for UTI Gilt Fund