How to Choose Top Gilt Mutual Funds In October 2024 For Safe Investment
What Are Gilt Funds?
Gilt funds are a type of debt mutual fund that invests in government securities that are issued by the central or state governments. Gilt funds must invest at least 80% of their assets in government securities. These funds are generally safer than other types of mutual funds, as they are subjected to interest rate risk. If the interest rate rises, the value of bonds in the fund can fall. Gilt funds have minimum credit risk and are generally free from defaults. Guit Funds are not recommended to regular debt investors because they are risky and volatile.
Who Can Invest in Gilt Funds?
Mutual fund advisors are suggesting that Non risk-taking investors or experienced investors should consider investing in gilt funds. Investors believe that these funds will give a better return in the next few months. The reason for this belief is that the Reserve Bank of India (RBI) might reduce the rate of interest in the second half of 2024. Gilt funds can provide returns of more than 10% if interest rates go down, making them a potentially attractive investment.
Top Gilt Funds to Invest in October 2024:
Here are some recommended gilt funds: The Nippon India Gilt Securities Fund has improved its performance, shifting from the fourth quartile to the third quartile in the last two months. The Aditya Birla Sun Life Government Securities Fund has been in the third quartile for the past six months. The Bandhan Government Securities Fund has continuously performed better, remaining in the second quartile for the last seven months.
1. SBI Magnum Gilt Fund:
The SBI Magnum Gilt Fund focuses on investing in government securities with no credit risk, it is ideal for conservative investors looking for stable returns and safety in a changeable interest rate environment.
2. ICICI Prudential Gilt Fund:
This fund invests in government securities and focuses on providing consistent returns by taking advantage of interest rate movements, it is suited for investors with longer investment horizons.
3. Nippon India Gilt Securities Fund:
This fund primarily invests in government bonds and provides low-risk exposure to debt markets. It is a better option for those who are looking to benefit from potential rate cuts by the RBI.
4. Aditya Birla Sun Life Government Securities Fund:
These Funds aim to generate returns by investing in government securities through
different maturities, this fund offers safety and long-term capital appreciation potential with minimal credit risk.
5. Bandhan G-sec Fund:
Bandhan G-sec fund offers investors the chance to invest in government securities and focus on maintaining a balance between safety and steady returns, ideal for risk-averse investors looking for stable income.
If you want to take advantage of a possible drop in interest rates, gilt mutual funds could be a better option. However, be cautious: gilt funds carry risks and are highly sensitive to changes in the rate of interest. Because of this, they are best suited for well-informed investors who are ready to take risks and have a long-term investment plan.
