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Five Best Performing Gilt Funds to Invest in

Highlights

  • Gilt funds invest in government securities of different maturities
  • You can buy and sell them anytime - But of the many gilt funds, which are the ones should you consider? Read this post for the same

Gilts funds have gained popularity in the last couple of years due to their superlative performance. As an aggregate, gilt funds have been the best performing category of mutual funds. This is because of the sharp fall in G-Sec yield (government securities yield) due to low inflation, growth, and decreasing interest rates. These factors have led to an increase in the prices of government securities leading to double-digit returns. Gilt funds invest in government securities of different duration and are open-ended (you can buy/sell anytime).

Top Mutual Funds to Invest in Now

Best Performing Gilt Funds

DSP Government Securities Fund

This fund is offered by the DSP Mutual Fund. These are the key features of this fund:

  • This fund was launched on 30th Sep 1999 and has delivered an impressive 9.94% since launch.
  • The benchmark is the Isec Li-Bex Index and is rated four stars by Value Research.
  • The fund manages an AUM of INR 1,173 crores.
  • This fund holds five government securities with an average maturity of 10.70 years.
  • The current yield to maturity is 6.10% which means if you invest and hold this fund till its maturity then you will get a 6.10% return.

ICICI Prudential Gilt Fund

This fund is offered by ICICI Prudential Mutual Fund. These are the key features of this fund:

  • This fund was launched on 19th Aug 1999 and has delivered an impressive 10.17% since launch.
  • The benchmark is CRISIL Dynamic Gilt Index and is rated three stars by Value Research.
  • The fund manages an AUM of INR 2,864 crores.
  • This fund holds 17 government securities with an average maturity of 16.40 years.
  • The current yield to maturity is 6.30% which means if you invest and hold this fund till its maturity then you will get a 6.30% return.
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IDFC Government Securities Fund

This fund is offered by IDFC Mutual Fund. These are the key features of this fund:

  • This fund was launched on 1st Dec 2008 and has delivered 8.93% since launch.
  • The benchmark is CRISIL Dynamic Gilt Index and is rated four stars by Value Research.
  • The fund manages an AUM of INR 1,066 crores.
  • This fund holds 6 government securities with an average maturity of 8.23 years.
  • The current yield to maturity is 6.03% which means if you invest and hold this fund till its maturity then you will get a 6.03% return.

Nippon India Gilt Securities Fund

This fund is offered by Nippon Mutual Fund, also the erstwhile Reliance Mutual Fund. These are the key features of this fund:

  • This fund was launched on 4th July 2003 and has delivered 6.58% since launch.
  • The benchmark is CRISIL Dynamic Gilt Index and is rated five stars by Value Research.
  • The fund manages an AUM of INR 1,381 crores.
  • This fund holds 13 government securities with an average maturity of 10.49 years.
  • The current yield to maturity is 6.05% which means if you invest and hold this fund till its maturity then you will get a 6.05% return.

SBI Magnum Gilt Fund

This fund is offered by SBI Mutual Fund, which is also the largest mutual fund in the country. These are the key features of this fund:

  • This fund was launched on 30th Dec 2000 and has delivered 8.48% since launch.
  • The benchmark is CRISIL Dynamic Gilt Index and is rated five stars by value research.
  • The fund manages an AUM of INR 2,752crores.
  • This fund holds 8 government securities with an average maturity of 12.93 years.
  • The current yield to maturity is 6.27% which means if you invest and hold this fund till its maturity then you will get a 6.27% return.
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Snapshot of Best Performing Gilt Funds

Fund NameAUM (In Crores)No of securitiesAverage MaturityYield to maturity
DSP Gilt1173510.76.10%
ICICI Gilt28641716.246.30%
IDFC Gilt106668.236.03%
NIPPON Gilt13811310.496.05%
SBI Gilt2752812.936.27%

Returns of Gilt Funds Regular Plan (In % TERMS)

Fund NameLast 6 monthsLast 1 yearLast 3 yearsLast 5 years
DSP Gilt10.6314.478.959.79
ICICI Gilt10.8914.238.039.94
IDFC Gilt11.4815.139.3110.15
NIPPON Gilt9.3512.968.9710.40
SBI Gilt9.5413.738.3010.10

Conclusion

As we can see, these funds have delivered superlative returns. The last one year, especially, has been great with returns in the vicinity of 13-15%. This has been due to falling interest rates and rising prices of government securities. However, one needs to be mindful of the risks in gilt funds before investing. These returns might not repeat in the near future and one should not invest with an expectation of 15%. If interest rates do not come down from here, these funds could at best deliver liquid fund kind of returns of 5-6%. To know more about gilt funds and whether they are a good option to invest, you can read another post of ours-https://www.wishfin.com/mutual-fund/are-gilt-funds-a-good-investment-option/.

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