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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 (%) 2023 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity SBI Magnum Constant Maturity Fund Growth ₹59.9407
↓ -0.07 ₹1,761 2.3 5.6 10.2 5.6 7.5 6.88% 6Y 10M 20D 9Y 10M 24D ICICI Prudential Constant Maturity Gilt Fund Growth ₹23.1087
↓ -0.03 ₹2,452 2.4 5.6 10.2 5.6 7.7 6.87% 6Y 8M 5D 9Y 7M 2D IDFC Government Securities Fund - Constant Maturity Plan Growth ₹42.9147
↓ -0.04 ₹343 2.4 5.9 11 5.5 7.4 6.87% 6Y 7M 17D 9Y 4M 13D Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Oct 24 Gilt
funds having AUM/Net Assets above 100 Crore
. Sorted on Last 3 Year Return
.
(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 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 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. SBI Magnum Constant Maturity Fund
CAGR/Annualized
return of 7.8% since its launch. Ranked 1 in 10 Yr Govt Bond
category. Return for 2023 was 7.5% , 2022 was 1.3% and 2021 was 2.4% . SBI Magnum Constant Maturity Fund
Growth Launch Date 30 Dec 00 NAV (25 Oct 24) ₹59.9407 ↓ -0.07 (-0.11 %) Net Assets (Cr) ₹1,761 on 15 Oct 24 Category Debt - 10 Yr Govt Bond AMC SBI Funds Management Private Limited Rating ☆☆☆☆ Risk Moderately Low Expense Ratio 0.64 Sharpe Ratio 1.3 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 6.88% Effective Maturity 9 Years 10 Months 24 Days Modified Duration 6 Years 10 Months 20 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 19 ₹10,000 30 Sep 20 ₹11,024 30 Sep 21 ₹11,576 30 Sep 22 ₹11,521 30 Sep 23 ₹12,394 30 Sep 24 ₹13,648 Returns for SBI Magnum Constant Maturity Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 25 Oct 24 Duration Returns 1 Month -0.2% 3 Month 2.3% 6 Month 5.6% 1 Year 10.2% 3 Year 5.6% 5 Year 6.3% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.5% 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% Fund Manager information for SBI Magnum Constant Maturity Fund
Name Since Tenure Rajeev Radhakrishnan 1 Nov 23 0.92 Yr. Tejas Soman 1 Dec 23 0.84 Yr. Data below for SBI Magnum Constant Maturity Fund as on 15 Oct 24
Asset Allocation
Asset Class Value Cash 2.08% Debt 97.92% Debt Sector Allocation
Sector Value Government 97.92% Cash Equivalent 2.08% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 07.18 Goi 14082033
Sovereign Bonds | -32% ₹539 Cr 52,500,000 07.18 Goi 24072037
Sovereign Bonds | -28% ₹470 Cr 45,500,000 7.26% Govt Stock 2033
Sovereign Bonds | -23% ₹397 Cr 38,500,000 7.10%Goi 08/04/2034
Sovereign Bonds | -15% ₹261 Cr 25,500,000
↑ 2,000,000 Net Receivable / Payable
CBLO | -1% ₹23 Cr Treps
CBLO/Reverse Repo | -1% ₹13 Cr 2. 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 2023 was 7.7% , 2022 was 1.2% and 2021 was 2.8% . ICICI Prudential Constant Maturity Gilt Fund
Growth Launch Date 12 Sep 14 NAV (25 Oct 24) ₹23.1087 ↓ -0.03 (-0.14 %) Net Assets (Cr) ₹2,452 on 15 Oct 24 Category Debt - 10 Yr Govt Bond AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.39 Sharpe Ratio 1.23 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 6.87% Effective Maturity 9 Years 7 Months 2 Days Modified Duration 6 Years 8 Months 5 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 19 ₹10,000 30 Sep 20 ₹11,256 30 Sep 21 ₹11,897 30 Sep 22 ₹11,796 30 Sep 23 ₹12,726 30 Sep 24 ₹13,991 Returns for ICICI Prudential Constant Maturity Gilt Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 25 Oct 24 Duration Returns 1 Month -0.2% 3 Month 2.4% 6 Month 5.6% 1 Year 10.2% 3 Year 5.6% 5 Year 6.8% 10 Year 15 Year Since launch 8.6% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.7% 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 Fund Manager information for ICICI Prudential Constant Maturity Gilt Fund
Name Since Tenure Manish Banthia 22 Jan 24 0.69 Yr. Raunak Surana 22 Jan 24 0.69 Yr. Data below for ICICI Prudential Constant Maturity Gilt Fund as on 15 Oct 24
Asset Allocation
Asset Class Value Cash 3.54% Debt 96.46% Debt Sector Allocation
Sector Value Government 96.46% Cash Equivalent 3.54% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.10%Goi 08/04/2034
Sovereign Bonds | -84% ₹2,030 Cr 198,151,900
↑ 49,500,000 07.18 Goi 14082033
Sovereign Bonds | -7% ₹170 Cr 16,572,600
↓ -42,500,000 07.18 Goi 24072037
Sovereign Bonds | -5% ₹119 Cr 11,500,000
↓ -8,500,000 Net Current Assets
Net Current Assets | -3% ₹69 Cr Treps
CBLO/Reverse Repo | -1% ₹17 Cr 3. IDFC Government Securities Fund - Constant Maturity Plan
CAGR/Annualized
return of 6.6% since its launch. Ranked 2 in 10 Yr Govt Bond
category. Return for 2023 was 7.4% , 2022 was 0.7% and 2021 was 1.8% . IDFC Government Securities Fund - Constant Maturity Plan
Growth Launch Date 9 Mar 02 NAV (25 Oct 24) ₹42.9147 ↓ -0.04 (-0.10 %) Net Assets (Cr) ₹343 on 30 Sep 24 Category Debt - 10 Yr Govt Bond AMC IDFC Asset Management Company Limited Rating ☆☆☆ Risk Moderate Expense Ratio 0.49 Sharpe Ratio 1.49 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 6.87% Effective Maturity 9 Years 4 Months 13 Days Modified Duration 6 Years 7 Months 17 Days Growth of 10,000 investment over the years.
Date Value 30 Sep 19 ₹10,000 30 Sep 20 ₹11,195 30 Sep 21 ₹11,769 30 Sep 22 ₹11,595 30 Sep 23 ₹12,463 30 Sep 24 ₹13,794 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 25 Oct 24 Duration Returns 1 Month -0.1% 3 Month 2.4% 6 Month 5.9% 1 Year 11% 3 Year 5.5% 5 Year 6.5% 10 Year 15 Year Since launch 6.6% Historical performance (Yearly) on absolute basis
Year Returns 2023 7.4% 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% Fund Manager information for IDFC Government Securities Fund - Constant Maturity Plan
Name Since Tenure Harshal Joshi 15 May 17 7.39 Yr. Brijesh Shah 10 Jun 24 0.31 Yr. Data below for IDFC Government Securities Fund - Constant Maturity Plan as on 30 Sep 24
Asset Allocation
Asset Class Value Cash 0.92% Debt 99.08% Debt Sector Allocation
Sector Value Government 99.08% Cash Equivalent 0.92% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 7.18% Govt Stock 2033
Sovereign Bonds | -60% ₹206 Cr 20,100,000
↑ 100,000 7.18% Govt Stock 2037
Sovereign Bonds | -20% ₹70 Cr 6,800,000 7.26% Govt Stock 2032
Sovereign Bonds | -8% ₹26 Cr 2,500,000 6.54% Govt Stock 2032
Sovereign Bonds | -7% ₹25 Cr 2,550,000 7.1% Govt Stock 2034
Sovereign Bonds | -3% ₹10 Cr 1,000,000 7.17% Govt Stock 2028
Sovereign Bonds | -0% ₹1 Cr 71,000 8.24% Govt Stock 2027
Sovereign Bonds | -0% ₹0 Cr 44,000 Net Current Assets
Net Current Assets | -1% ₹2 Cr Triparty Repo Trp_170924
CBLO/Reverse Repo | -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.