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Best Gilt Funds to Invest 2022

Gilt funds are the schemes that are issued by the government of India or the Reserve Bank of India so that investors invest in the securities of the government. The goal of issuing gilt funds is raising money for the government when investors from various sources like banks, insurance companies, and various other institutions that carry out investments invest in government securities. 

When these gilt funds mature, the government securities are returned by the gilt funds in exchange for money. There are many gilt funds out there in the market, but the best-gilt funds to invest in are those government securities of the central government and the state government of India which invest at a fixed rate of interest. 

The gilt funds refrain from investing in corporate bonds unlike the standard debt funds so that the risk involved in investing is reduced. The security market of the government is controlled by institutional investors at large. Retail investors can also invest in gilt funds with ease.

Top 6 Gilt Funds to Invest 2022

There are many gilt funds that are issued by the government to raise money for the functioning of the country. For investors to make smart investments, it is essential for them to invest in the best. Great investments will give higher returns to the investors making their investments a success.

Fund Name AUM (Cr) Returns over 1-Year Returns over 3-Years Returns over 5-Years
Aditya Birla Sun Life Government Securities


       880.66



 3%



9.9%



8.49%
SBI Magnum Gilt Fund
37.11

3.1%

10.1%

8.65%
ICICI Prudential Gilt Fund 

3,739


2.7%


9.4%


8.12%
SBI Magnum Constant Maturity Fund

816


2.4%


9.9%


9.15%
Canara Robeco Gilt Fund

93.21


1.9%


8.1%


7.4%
Nippon India Gilt Securities Fund  

1,372


1.8%


9.9%


8.58%

The above table shows the top 6 gilt funds and their annual returns over the course of 1 year, 3 years, and 5 years. The table also shows the assets under the management of the companies.

The following are the best-gilt funds in which the investors should consider investing in:

  1. Aditya Birla Sun Life Government Securities
  • Launched on 12 October 1999 this is one of the best gilt funds to invest in 2021. One of the top 6 gilt funds to invest in, these top gilt funds have a net asset value of 64.3951 rupees. The net assets of these top 6 best gilt funds to invest the amount to rupees 881 crores. 
  • This best performing gilt funds is a debt-government bond. These top gilt funds are managed by Birla Sun Life Asset Management Company Limited. These gilt funds 2021 are moderate-risk funds. The expense ratio on these best gilt funds to invest in 2021 is 1.18. 
  • Sharpe ratio on this top gilt funds is 0.11. The minimum amount of investment that is applicable on this best performing gilt funds is rupees 1000 and the minimum amount of SIP investment on this best gilt funds to invest in 2021 is 1000 rupees.
  • The yield to maturity on these top gilt funds is 6.28%. Effective maturity period on this gilt funds 2021 is a recorded 5 years 2 months and 5 days and modified duration period is 4 years 2 months and 12 days.
  1. SBI Magnum Gilt Fund
  • Launched on 30 December 2000 this is one of the best gilt funds to invest in 2021. One of the top 6 gilt funds to invest in, these top gilt funds have a net asset value of 50.999 rupees. The net assets of these top 6 best gilt funds to invest the amount to rupees 3,711 crores. 
  • This best performing gilt funds is a debt-government bond. These best performing gilt funds are managed by SBI Funds Management Private Limited. These gilt funds 2021 are moderate-risk funds. The expense ratio on this best gilt funds to invest in 2021 is 0.97. 
  • Sharpe ratio on this top gilt funds is 0.14. The minimum amount of investment that is applicable on this best performing gilt funds is rupees 5000 and the minimum amount of SIP investment on this best gilt funds to invest in 2021 is 500 rupees.
  • The yield to maturity on these top gilt funds is 4.5%. Effective maturity period on this gilt funds 2021 is a recorded 4 years and modified duration period is 1 year 11 months and 12 days.
  1. ICICI Prudential Gilt Fund
  • Launched on 19 August 1999 this is one of the best gilt funds to invest in 2021. One of the top 6 gilt funds to invest in, these top gilt funds have a net asset value of 78.6005 rupees. The net assets of these top 6 best gilt funds to invest the amount to rupees 3,739 crores. 
  • This best performing gilt funds is a debt-government bond. These top 6 best gilt funds to invest in are managed by ICICI Prudential Asset Management Company Limited. These gilt funds 2021 are moderate-risk funds. The expense ratio on these best gilt funds to invest in 2021 is 1.08. 
  • Sharpe ratio on this top gilt funds is 1.05. The minimum amount of investment that is applicable on this best performing gilt funds is rupees 5000 and the minimum amount of SIP investment on this best gilt funds to invest in 2021 is 1000 rupees.
  • The yield to maturity on these top gilt funds is 6.08%. Effective maturity period on this gilt funds 2021 is a recorded 14 years 3 months and 7 days and modified duration period is 5 years 1 month and 17 days.
  1. SBI Magnum Constant Maturity Fund
  • Launched on 30 December 2000 this is one of the best gilt funds to invest in 2021. One of the top 6 gilt funds to invest in, these top gilt funds have a net asset value of 49.9937 rupees. The net assets of these top 6 best gilt funds to invest the amount to rupees 816 crores. 
  • This best performing gilt funds is a 10-year debt-government bond. These top 6 best gilt funds to invest in are managed by SBI Funds Management Private Limited. These gilt funds 2021 are moderately low-risk funds. The expense ratio on this best gilt funds to invest in 2021 is 0.64. 
  • Sharpe ratio on this top gilt funds is 0.06. The minimum amount of investment that is applicable on this best performing gilt funds is rupees 5000 and the minimum amount of SIP investment on this best gilt funds to invest in 2021 is 500 rupees.
  • The yield to maturity on these top gilt funds is 6.38%. Effective maturity period on this gilt funds 2021 is a recorded 9 years 6 months and 25 days and modified duration period is 6 years 7 months and 2 days.
  1. Canara Robeco Gilt Fund
  • Launched on 29 December 1999 this is one of the best gilt funds to invest in 2021. One of the top 6 gilt funds to invest in, these top gilt funds have a net asset value of 60.5858 rupees. The net assets of these top 6 best gilt funds to invest the amount to rupees 93 crores. 
  • This best performing gilt fund is a debt-government bond. This gilt funds 2021 is managed by Canara Robeco Asset Management Company Limited. These gilt funds 2021 are moderate-risk funds. The expense ratio on these best gilt funds to invest in 2021 is 1.24. 
  • Sharpe ratio on this top gilt funds is -0.29. The minimum amount of investment that is applicable on this best performing gilt funds is rupees 5000 and the minimum amount of SIP investment on this best gilt funds to invest in 2021 is 1000 rupees.
  • The yield to maturity on these top gilt funds is 4.71%. Effective maturity period on this gilt funds 2021 is a recorded 3 years 2 months and 28 days and modified duration period is 2 years 4 months and 19 days.
  1. Nippon India Gilt Securities Fund  
  • Launched on 22 August 2008 this is one of the best gilt funds to invest in 2021. One of the top 6 gilt funds to invest in, this top 6 best gilt funds to invest in has a net asset value of 30.467 rupees. The net assets of these top 6 best gilt funds to invest the amount to rupees 1,373 crores. 
  • This best performing gilt funds is a debt-government bond. The top gilt funds are managed by Nippon Life Asset Management Limited. These gilt funds 2021 are moderate-risk funds. The expense ratio on this best gilt funds to invest in 2021 is 1.59. 
  • Sharpe ratio on this top 6 best gilt funds to invest is -0.29. The minimum amount of investment that is applicable on this best performing gilt funds is rupees 5000 and the minimum amount of SIP investment on this best gilt funds to invest in 2021 is 100 rupees.
  • The yield to maturity on these top gilt funds is 5.8%. Effective maturity period on this gilt funds 2021 is a recorded 6 years 4 months and 10 days and modified duration period is 4 years 7 months and 20 days.

How to Choose Best Gilt Debt Mutual Funds?

Gilt funds are a good investment option. But they can be a waste of investment if not carried out properly. To prevent that from happening investors need to ascertain the qualities that make gilt funds the best.

The following are the points that the investors need to consider to choose the gilt debt mutual funds:

  • Duration and Average Maturity – When people think of investing in gilt funds, they must consider the average maturity and duration of the same. There are three types of gilt funds, namely, short-term gilt funds, medium-term gilt funds, and long-term gilt funds. The duration of short-term gilt funds is low, less than a year.  The maturity period of long-term gilt funds is very high, around 10-15 years. Investors invest in gilt funds because they want the yield on the investment as well as to play the view of interest rate.
  • Interest Rate Risk – Interest rate risk gilt funds and interest rates do not go hand in hand. The relationship between gilt debt funds and interest rates is not positive. The net asset value rises and falls when there is an increase or decrease in the interest rates. This causes the fund’s return to fluctuate. Because gilt funds are highly volatile, it makes them a high-risk fund in the category of debt mutual.

Investors should wisely invest in gilt funds as the RBI will not raise the interest rate on gilt funds. This act of RBI will ascertain the downward movement of net asset value does not take place. If there is a fall in interest rates then it would be added to the returns. An amateur investor needs to have a thick strategy before investing in gilt funds.

How to Invest in Gilt Funds?

Investing in gilt funds is very easy. There are a few steps that the investors need to follow to invest in the gilt funds.

  • First the investors need to sign-up for any financial services software program.
  • Then enter the required details that need to be filled like the amount of money that you need to invest.
  • E-KYC should be ready in about 5 minutes.
  • Now all you need to do is invest in whichever gilt fund that you like best.

Best Gilt Funds – FAQs

Q1. What are the main characteristics of gilt funds?

Ans. Gilt funds are created to enable the investors to invest in government securities with the least amount of risk involved. Higher returns are generated in the best funds in India with the least amount of risk. Gilt funds are suitable for those investors who want to engage in investing in the funds with the least amount of risk involved. 

Government bonds with maturities ranging from 5 years to 30 years are available for those people who are looking for long-term investments.

Q2. Based on which factors are taxes levied on gilt funds?

Ans. Gilt funds are invested solely in government securities and collect tax treatment of debt funds. If the gilt funds are kept for a short period of around 36 months then again tax of the short term category will be levied on the profits. If the investors hold gilt funds for more than 36 months then a long-term tax of capital profit of 20% with the benefits of indexation will be levied on the funds. 

Q3. I want to invest in gilt funds but I don’t know how to go about it.

Ans. Gilt funds are a good investment option. But they can be a waste of investment if not carried out properly. To prevent that from happening investors need to need to consider choosing the gilt debt mutual funds:

  • Duration and Average Maturity – When people think of investing in gilt funds, they must consider the average maturity and duration of the same. There are three types of gilt funds, namely, short-term gilt funds, medium-term gilt funds, and long-term gilt funds. 
  • Interest Rate Risk – Interest rate risk gilt funds and interest rates do not go hand in hand. The relationship between gilt debt funds and interest rates is not positive. The net asset value rises and falls when there is an increase or decrease in the interest rates. This causes the fund’s return to fluctuate. Because gilt funds are highly volatile, it makes them a high-risk fund in the category of debt mutual.

Q4. What factors are determined by the Reserve Bank of India before levying repo rate signals?

Ans. Different gilt has different maturity periods which make them quite lucrative investments. The funds provide reasonable returns to the investors by forecasting the movement in the rate of interest. Based on the growth rate of GDP, inflation in the market, prices of commodities, et cetera, the Reserve Bank of India provides repo rate signals.

Q5. What are gilt funds exactly?

Ans. Gilt funds are the schemes that are issued by the government of India or the Reserve Bank of India so that investors invest in the securities of the government. The goal of issuing gilt funds is raising money for the government when investors from various sources like banks, insurance companies, and various other institutions that carry out investments invest in government securities. 

Q6. Do the gilt funds invest in something else other than government securities?

Ans. When gilt funds mature, the government securities are returned by the gilt funds in exchange for money. There are many gilt funds out there in the market, but the best gilt funds to invest in are those government securities of the central government and the state government of India which invest in fixed-rate of interest. 

The gilt funds refrain from investing in corporate bonds unlike the standard debt funds so that the risk involved in investing is reduced. The security market of the government is controlled by institutional investors at large. Retail investors can also invest in gilt funds with ease.

Q7. Which are the top 2 gilt funds in which I can invest?

Ans. For investors to make smart investments, it is essential for them to invest in the best. Great investments will give higher returns to the investors making their investments a success.

  1. Aditya Birla Sun Life Government Securities
  2. SBI Magnum Gilt Fund
Marketvein Staff
Marketvein Staffhttps://www.marketvein.com/
Born libra, likes to lead from the front. Digital Marketing & Technology is his strength. He has pursued engineering. Travelling to new places & writing is his idea of fun. In his free time (if he gets some that is), he is seen donning the chef's hat at home.
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