Shivani Verma | Jan 23, 2025 |
Top Gilt Mutual Funds for Investment in January 2025
Gilt mutual funds are debt mutual funds that put money into government bonds, also known as G-secs. Mutual fund experts suggest gilt funds to aggressive or knowledgeable debt investors because they trust that gilt funds provide great returns when the RBI begins cutting interest rates. Some of the mutual fund experts say gilt funds have the potential to deliver double-digit returns when interest rates are going down.
According to SEBI rules, these schemes are required to invest at least 80% of their funds in government securities. Because these funds invest in government bonds or lend money to the government that is why they have no credit risk and zero chance of defaults. The scheme is suggested to the informed investors only, who are prepared to take the risk and long-term financial plan.
Gilt funds are not suggested to regular debt investors because they can be risky and volatile. These funds are especially affected when interest rates rise. Bond prices and yields move in opposite directions like when rates go up, bond prices fall, which lowers the NAVs (Net Asset Values) of the schemes.
From these top gilt funds, Nippon India Gilt Securities Fund has been in the top third quartile for the past five months. Before that, the scheme had been in the top fourth quartile. Aditya Birla Sun Life Government Securities Fund has been in the top third quartile for the past nine months. Bandhan Government Securities Fund has been in the top third quartile in the past month. Before that, the scheme had been in the top second quartile.
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