What are Gilt Funds?
Gilt funds are open-ended debt funds, which primarily invest in Government Securities (G-Secs) across maturities. The term G-Secs include government bonds issued by central and state governments, Treasury Bills (T-Bills) and Cash Management Bills (CMBs). As per the SEBI circular on categorisation of mutual fund schemes, Gilt Funds have to invest at least 80% of their total assets in G-Secs.
List of Top 10 Gilt Funds
| Fund Name | Returns (% p.a.) | |||
| 1 year | 3 year | 5 year | 10 year | |
| ICICI Prudential Gilt Fund | 6.29 | 7.58 | 6.02 | 7.92 |
| Baroda BNP Paribas Gilt Fund | 4.87 | 7.25 | 5.03 | 6.46 |
| Axis Gilt Fund | 4.30 | 7.13 | 5.26 | 7.11 |
| Bandhan Gilt Fund | 3.29 | 7.00 | 4.90 | 7.51 |
| SBI Magnum Gilt Fund | 4.08 | 6.98 | 5.58 | 7.73 |
| UTI Gilt Fund | 4.79 | 6.89 | 5.13 | 7.30 |
| HDFC Gilt Fund | 4.34 | 6.79 | 4.87 | 6.61 |
| DSP Gilt Fund | 2.74 | 6.74 | 5.17 | 7.49 |
| Invesco India Gilt Fund | 2.83 | 6.52 | 4.49 | 6.33 |
| Tata Gilt Securities Fund | 3.39 | 6.50 | 4.47 | 6.24 |
Data as on December 9, 2025
Why Invest in Gilt Funds?
- The risk of default in government securities is almost nil as these are backed by the sovereign guarantee, which makes the portfolios of Gilt Funds immune from credit risk
- Some Gilt Funds may also invest in corporate bonds backed/guaranteed by the central government or respective state governments, which offer higher returns than G-Secs
- Gilt Funds usually try to enhance their returns by actively managing interest rate risks
- Gilt funds usually follow flexible duration strategy to benefit across interest rate cycles and are free to invest anywhere across the sovereign yield curve
Who Should Invest in Gilt Funds?
- Investors seeking exclusive exposure to government securities across maturities
- Those seeking to invest in debt funds without any credit risk exposure
- Investors seeking accrual income from government securities along with the possibility to benefit from capital gains caused by falling interest rates
- Investors who clearly understand the potential and risks involved in pursuing duration risk strategies