Long Term Gilt Fund India

Long Term Gilt Fund India

The below table shows Long Term Gilt Fund India based on AUM, NAV, and minimum SIP.

NameAUM (Cr)NAVMinimum SIP (Rs)
SBI magnum gilt fund7884.2762.721000
ICICI Pru gilt fund4864.5799.01100
Kotak Gilt Fund-PF&Trust3136.85100.42100
Aditya Birla SL G-Sec Fund1481.4878.42100
DSP Gilt Fund712.791.12100
UTI Gilt fund580.0558.62500
PGIM india gilt fund122.4129.221000

Content:

What Are Gilt Funds In India?

Gilt funds in India are mutual funds that invest primarily in government securities issued by the Reserve Bank of India. These funds are considered low-risk investments, providing stable returns and capital preservation, making them suitable for conservative investors seeking safety and steady income.

Gilt funds exclusively invest in high-quality government bonds, ensuring minimal credit risk. Their performance is influenced by interest rate movements, where falling rates typically lead to higher returns. Investors benefit from the security of government backing, which reduces the risk of default.

However, gilt funds are sensitive to interest rate fluctuations. When interest rates rise, the value of the bonds in the fund may decrease, affecting returns. Therefore, investors should consider their investment horizon and risk tolerance when investing in gilt funds.

Best Long Term Gilt Fund In India

The table below shows Best Long Term Gilt Fund In India based on the lowest to highest expense ratio.

NameExpense Ratio (%)Minimum SIP (Rs)
PGIM India Gilt fund0.451000
SBI magnum gilt fund0.461000
Aditya Birla SL G-Sec Fund0.46100
Kotak Gilt Fund-PF&Trust0.47100
ICICI pru gilt fund0.56100
DSP Gilt Fund0.56100
UTI Gilt fund0.69500
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Top Long Term Gilt Fund In India

The table below shows the Top Long Term Gilt Fund In India based on the Highest 3Y CAGR. 

NameCAGR 3Y (%)Minimum SIP (Rs)
ICICI Pru gilt fund6.48100
SBI magnum gilt fund6.081000
Kotak Gilt Fund-PF&Trust5.94100
DSP Gilt Fund5.86100
Aditya Birla SL G-Sec Fund5.69100
PGIM India Gilt fund5.561000
UTI Gilt fund5.12500

List Of Best Long Term Gilt Funds In India

The table below shows a List Of the best Long Term Gilt Funds In India based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

NameAMCExit Load (%)
ICICI Pru gilt fundICICI Prudential Asset Management Company Limited0
SBI magnum gilt fundSBI Funds Management Limited0
Kotak Gilt Fund-PF&TrustKotak Mahindra Asset Management Company Limited0
DSP Gilt FundDSP Investment Managers Private Limited0
Aditya Birla SL G-Sec FundAditya Birla Sun Life AMC Limited0
PGIM India Gilt fundPGIM India Asset Management Private Limited0
UTI Gilt fundUTI Asset Management Company Private Limited0

Top Long Term Gilt Funds

The table below shows the top Long Term Gilt Funds In India based on Absolute 1 Year Return and AMC.

NameAMCAbsolute Returns – 1Y (%)
ICICI Pru Gilt fundICICI Prudential Asset Management Company Limited7.89
DSP Gilt FundDSP Investment Managers Private Limited7.48
PGIM India Gilt fundPGIM India Asset Management Private Limited7.38
Aditya Birla SL G-Sec FundAditya Birla Sun Life AMC Limited7.22
SBI magnum gilt fundSBI Funds Management Limited7.17
Kotak Gilt Fund-PF&TrustKotak Mahindra Asset Management Company Limited7.16
UTI Gilt fundUTI Asset Management Company Private Limited6.68

Who Should Invest In Gilt Funds For The Long Term?

Investors seeking a stable, low-risk investment for the long term should consider gilt funds. These funds invest in government securities, offering safety and predictable returns, making them ideal for conservative investors, such as retirees or those nearing retirement.

Gilt funds are less volatile compared to equity funds because they invest in government-backed securities. This makes them a safer option during market downturns or economic instability, providing a cushion against significant losses.

Furthermore, these funds offer liquidity and tax-efficient returns, which are attractive for investors who need steady income or wish to manage their tax liabilities effectively. They can be an essential part of a diversified investment portfolio.

How To Invest In The Gilt Funds For A Long Term?

To invest in gilt funds for the long term, open an account with Alice Blue and choose a fund that invests primarily in government securities. Assess funds based on past performance, management expertise, and risk factors to ensure they align with your financial goals.

Start by setting clear investment objectives and understanding the duration and risk associated with gilt funds. These funds are suitable for investors looking for steady returns with relatively low risk, making them ideal for conservative long-term investment strategies.

Regularly review and rebalance your portfolio to maintain the desired asset allocation. Utilize tools and resources provided by Alice Blue to monitor fund performance and economic indicators that impact interest rates and bond yields, ensuring your investments remain on track.

Performance Metrics Of Long Term Gilt Funds

Performance metrics of long-term gilt funds include yield to maturity, duration, and average maturity. These indicators help assess the fund’s sensitivity to interest rate changes and its potential return, providing a comprehensive view of its performance and risk profile in a fluctuating market environment.

Yield to maturity (YTM) measures the total expected return if the bonds are held until they mature, considering all interest payments and principal recovery. It is crucial for evaluating the income-generating ability of gilt funds over the long term, influencing investment decisions.

Duration and average maturity are key to understanding a fund’s interest rate risk. Longer duration indicates a higher sensitivity to rate changes, affecting fund value. Investors should consider these metrics to match their investment horizon and risk tolerance, ensuring alignment with their financial goals.

Benefits Of Investing In Long Term Gilt Funds

The main benefits of investing in long-term gilt funds include high safety, as they invest in government securities. These funds offer predictable returns and are less sensitive to market fluctuations, making them suitable for conservative investors seeking stability and moderate growth over time.

  • Safety First: Long-term gilt funds invest in government securities, ensuring high security for your investments. These bonds are backed by the government, significantly reducing the risk of default, which makes them a safe haven during economic uncertainties.
  • Predictable Returns: These funds provide predictable interest income, derived from long-term government securities. Their returns are generally stable, making them ideal for investors who prefer knowing what to expect from their investments in terms of returns over time.
  • Low Market Volatility: Due to their investment in government securities, long-term gilt funds are less affected by market fluctuations compared to equity funds. This low volatility is beneficial for investors looking to maintain a steady portfolio during turbulent market periods.
  • Tax Efficiency: Investing in long-term gilt funds can offer tax advantages. The returns from these funds are treated as long-term capital gains, which are taxed at a lower rate with indexation benefits, potentially increasing the net return on investment for taxpayers.
  • Liquidity: Despite their long-term nature, gilt funds offer liquidity. Investors can buy or sell fund units on any business day, providing flexibility and access to funds without significant constraints or penalties, which is especially valuable during financial emergencies.

Challenges Of Investing In Long Term Gilt Funds

The main challenges of investing in long-term gilt funds include interest rate sensitivity, which can affect fund valuations negatively when rates rise. Additionally, these funds generally offer lower returns compared to equities, which might not appeal to investors seeking higher growth opportunities.

  • Interest Rate Sensitivity: Long-term gilt funds are highly sensitive to changes in interest rates. When rates rise, the value of existing bonds drops, potentially leading to losses. This sensitivity makes timing and market prediction crucial for investors in these funds.
  • Modest Returns: While safer, long-term gilt funds typically offer lower returns compared to equities or high-yield bonds. Investors aiming for rapid asset growth may find these funds less attractive, as the safer the investment, the lower the potential returns tend to be.
  • Inflation Risk: Over extended periods, inflation can erode the real returns of gilt funds. If inflation rates surpass the yield of the bonds, investors might experience a decrease in purchasing power, making long-term gilt funds less suitable during high inflation periods.
  • Capital Opportunity Cost: Investing in long-term gilt funds ties up capital that could potentially yield higher returns in more aggressive investments. This opportunity cost is a significant consideration, especially for younger investors or those comfortable with higher risks.
  • Liquidity Constraints: Despite general liquidity, selling bonds before maturity in a rising interest rate environment can result in losses. This can pose a challenge for investors needing to liquidate assets quickly but facing unfavorable market conditions.
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Introduction to Long Term Gilt Funds In India

SBI magnum gilt fund

SBI Magnum Gilt Fund Direct-Growth, a gilt mutual fund scheme offered by SBI Mutual Fund, has been operational for 11 years and 4 months since its inception on January 1, 2013.

The SBI Magnum Gilt Fund is classified as a short and mid-term gilt fund, featuring an AUM of ₹7,884.27 crore. It belongs to the moderate risk category as defined by SEBI and has achieved a 5-year CAGR of 7.17%. The fund’s expense ratio is 0.46, with an exit load of 7.17%. The actual composition includes 1.98% in Cash & Equivalents, 5.19% in Treasury Bills, and 92.83% in Government Securities.

ICICI Pru gilt fund

The ICICI Prudential Gilt Fund Direct Plan-Growth, a gilt mutual fund offering from ICICI Prudential Mutual Fund, has been operational for 11 years and 4 months since its inception on January 1, 2013.

The ICICI Pru Gilt Fund is a short and mid-term gilt fund with an AUM of ₹4,864.57 crore. It falls under the moderate risk category by SEBI and has recorded a 5-year CAGR of 7.89%. The fund has an expense ratio of 0.56 and an exit load of 7.89%. The actual allocation includes 1.76% in cash and equivalents and 98.24% in government securities.

Kotak Gilt Fund-PF&Trust

Kotak Gilt Investment Direct-Growth is a gilt mutual fund offered by Kotak Mahindra Mutual Fund. It has been operational for 11 years and 4 months, with its inception date on January 1, 2013.

The Kotak Gilt Fund-PF&Trust is a short and mid-term gilt fund with an AUM of ₹3,136.85 crore. It is categorized under SEBI’s moderate risk level and has a 5-year CAGR of 7.16%. The fund maintains an expense ratio of 0.47 and an exit load of 7.16%. The actual composition includes 2.30% in cash and equivalents, while government securities make up 97.70%.

Aditya Birla SL G-Sec Fund

Aditya Birla Sun Life Government Securities Fund Direct Plan-Growth, a gilt mutual fund scheme, is part of the Aditya Birla Sun Life Mutual Fund portfolio. Launched on January 1, 2013, this fund has been operational for 11 years and 4 months.

The Aditya Birla SL G-Sec Fund is categorized as a short and mid-term gilt fund with an AUM of ₹1,481.48 crore. It is listed under the moderate risk category by SEBI and has reported a 5-year CAGR of 7.22%. The fund carries an expense ratio of 0.46 and an exit load of 7.22%. The actual allocation includes 2.27% in cash and equivalents and 97.73% in government securities.

DSP Gilt Fund

DSP Gilt Direct Plan-Growth is a gilt mutual fund scheme offered by DSP Mutual Fund. It was launched on January 1, 2013, and has been operational for 11 years and 4 months.

The DSP Gilt Fund falls into the category of short and mid-term gilt funds, with an AUM of ₹712.7 crore. It’s classified under SEBI’s moderate risk category and has a 5-year CAGR of 7.48%. The fund’s expense ratio stands at 0.56, with an exit load of 7.48%. The actual allocation of the portfolio includes 5.47% in cash and equivalents, 18.96% in treasury bills, and 75.57% in government securities.

UTI Gilt fund

UTI Gilt Fund Direct-Growth, a gilt mutual fund scheme from UTI Mutual Fund, has been operational for 11 years and 4 months since its inception on January 1, 2013.

The UTI Gilt Fund is a short and mid-term gilt fund with an AUM of ₹580.05 crore. It is designated under the moderate risk category by SEBI and has achieved a 5-year CAGR of 6.68%. The fund has an expense ratio of 0.69 and an exit load of 6.68%. The actual composition includes 15.70% in cash and equivalents and 84.30% in government securities.

PGIM India Gilt fund

PGIM India CRISIL IBX Gilt Index – Apr 2028 Fund Direct-Growth is an index mutual fund scheme offered by PGIM India Mutual Fund. Launched on February 2, 2023, this fund has been operational for 1 year and 3 months.

The PGIM India Gilt Fund, categorized as a short and mid-term gilt fund, has an AUM of ₹122.41 crore. Positioned within the moderate risk category by SEBI, it boasts a 5-year CAGR of 7.38%. The fund’s expense ratio is 0.45, with an exit load of 7.38%. The actual composition includes 10.09% in cash and equivalents, while 89.91% is invested in government securities.

Top Long Term Gilt Funds In India – FAQs

Which Are The Best Long Term Gilt Funds In India?

Best Long Term Gilt Funds In India #1: SBI magnum gilt fund
Best Long Term Gilt Funds In India #2: ICICI Pru gilt fund
Best Long Term Gilt Funds In India #3: Kotak Gilt Fund-PF&Trust
Best Long Term Gilt Funds In India #4: Aditya Birla SL G-Sec Fund
Best Long Term Gilt Funds In India #5: DSP Gilt Fund

These funds are listed based on the Highest AUM.

What Are The Top Long Term Gilt Funds In India?

The top long-term gilt funds in India include SBI Magnum Gilt Fund, ICICI Pru Gilt Fund, Kotak Gilt Fund-PF & Trust, Aditya Birla SL G-Sec Fund, and DSP Gilt Fund. These funds are well-regarded for their management strategies and have historically provided stable returns by investing in government securities.

Can I Invest In Long Term Gilt Funds In India?

Yes, you can invest in long-term gilt funds in India. These funds are a good choice if you’re looking for safe investment options with moderate returns. They primarily invest in government securities, making them less volatile and offering a stable investment avenue over a longer investment horizon.

Is Gilt Fund Good For the Long Term?

Gilt funds can be a good option for long-term investment, especially for conservative investors. They offer safety since they invest in government securities and provide stable returns. However, they are sensitive to interest rate changes, which can affect performance, so they are best suited for those with a lower risk tolerance.

Are Gilt Funds Taxable In India?


Yes, gilt funds are taxable in India. The gains from gilt funds are treated as capital gains. Short-term capital gains (if held for less than three years) are taxed as per the individual’s income tax slab rates. Long-term capital gains (if held for more than three years) are taxed at 20% with indexation benefits.

How To Invest In Long Term Gilt Funds In India?

To invest in long-term gilt funds in India, start by researching and selecting a reputable fund that matches your investment goals. Open a Demat and trading account through a financial services provider or directly through mutual fund platforms. Regularly monitor the fund’s performance and adjust your holdings as needed.

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