Gilt funds are a safe and reliable option for short-term investments, offering stable returns with no credit risk as they invest in government securities. They’re perfect for those seeking alternatives to fixed deposits or looking to park funds temporarily.
Since December, most long-term gilt funds that predominantly invest in government securities have extended their average maturity over the last few months
In the long term, gilt funds can outperform most other fixed-income funds. But they can be volatile in the short term as seen in the returns of the last couple of years
Investors latch on to government securities schemes of mutual fund houses. As per AMFI the mutual fund industry’s trade body, gilt funds saw net inflows of Rs 396 crore in June, as against an outflow of Rs 127 crore a month back