Top Gilt Mutual Funds for Investment in December 2024
Gilt funds are a type of debt fund that invests in fixed interest-bearing securities and bonds issued by the central and state governments. These schemes invest around 80% of their corpus in government securities and do not carry any credit risk. Mutual fund experts suggest gilt funds for aggressive debt investors because they believe that gilt funds provide better returns when the RBI may reduce interest rates. Gilt funds are said to have the potential to give double-digit returns when interest rates are falling.
If you want to invest in a mutual fund, which likely drops down in that case, you may consider investing in the gilt mutual funds. On the other hand, gilt funds are highly sensitive and risky because of the changes in the interest rate situation. That is why these schemes are suggested to only those investors who are ready to take risks and have a long-term investment horizon. Gilt funds are not suggested for inexperienced or new debt investors because they are volatile and have high risk. If the rate goes up in this situation, the gilt fund suffers more.
Bond prices and yields move in opposite directions, meaning when bond prices go up, the yields go down, and when bond prices go down, yields go up. One should always be well-informed about changes in interest rates in the economy.
If you are confused about whether you should invest in these schemes or not, in that case, you should only invest if you’re willing to wait for the interest rates to change.
Top gilt funds for investment in December 2024:
- Nippon India Gilt Securities Fund
- Bandhan G-Sec Fund
- SBI Magnum Gilt Fund
- ICICI Prudential Gilt Fund
- Aditya Birla Sun Life Government Securities Fund
In these funds, Nippon India Gilt Securities Fund has been in the top third quartile for the past four months, before 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 eight months. Bandhan Government Securities Fund has been in the top second quartile for the past nine months.
