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 | 7.62 | 8.03 | 6.25 | 7.83 |
| Baroda BNP Paribas Gilt Fund | 6.64 | 7.94 | 5.28 | 6.48 |
| DSP Gilt Fund | 5.08 | 7.77 | 5.73 | 7.60 |
| Axis Gilt Fund | 5.93 | 7.72 | 5.61 | 7.15 |
| SBI Magnum Gilt Fund | 5.41 | 7.69 | 5.88 | 7.70 |
| HDFC Gilt Fund | 6.03 | 7.58 | 5.15 | 6.58 |
| Bandhan Government Securities Fund – Investment Plan | 3.66 | 7.45 | 4.99 | 7.40 |
| Invesco India Gilt Fund | 4.25 | 7.25 | 4.74 | 6.27 |
| Edelweiss Government Securities Fund | 4.48 | 7.19 | 5.73 | 7.25 |
| UTI Gilt Fund | 5.37 | 7.19 | 5.18 | 7.15 |
Data as on October 24, 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