Best Gilt Funds to Invest in September 2024

Are you looking for an investment option with government backing for stability and consistent growth? Gilt mutual funds might be the suitable avenue to go for. While these funds primarily invest in government securities, they can turn volatile when interest rates fluctuate.

So, which gilt funds should you invest in 2024? We have got you covered with the top five recommendations in this blog. First, let’s find out whether or not gilt funds are for you.

Who Should Invest in Gilt Funds?

While gilt funds are essentially debt mutual funds, they are for debt investors looking for aggressive growth. They can be a bit risky when interest rates rise, and turn rewarding when the rates fall.

As you know, bond prices and yields move in opposite directions. Rising interest rates can drag down the NAVs of these funds. Interestingly, 80% of the assets of gilt funds are to be invested in government securities to ensure stability.

So, if you are an informed investor, gilt funds are for you. However, you must understand the associated risks and be ready to tolerate short-term fluctuations to gain over the longer horizon.

Best Gilt Funds to Invest in September 2024

We have curated this list of the top-performing gilt funds to invest in September 2024.

1. Nippon India Gilt Securities Fund

● AUM: INR 1645.14 crore
● NAV: INR 40.3241
● Expense Ratio: 1.29%
● 1-year return: 8.85%
● 2-year return: 7.65%
● 3-year return: 5.52%

If you are looking for long-term capital appreciation by investing in government securities, Nippon India Gilt Securities Fund is one of the best picks. It primarily invests in high-quality government securities, which makes it a relatively safer choice within the gilt category. You will benefit from the interest rate cycles and security in government-backed schemes.

2. Bandhan G-Sec Fund

● AUM: INR 2543.49 crore
● NAV: INR 36.1224
● Expense Ratio: 1.14%
● 1-year return: 10.89%
● 2-year return: 8.31%
● 3-year return: 5.96%

Conservative investors often go for the Bandhan G-Sec Fund. With this mutual fund, you get exposure to government securities with minimal credit risk. It maintains a diversified portfolio of government securities with varying maturity periods. Thus, the fund delivers stable returns over time.

3. SBI Magnum Gilt Fund

● AUM: INR 8870.92 crore
● NAV: INR 65.7285
● Expense Ratio: 0.94%
● 1-year return: 9.13%
● 2-year return: 8.54%
● 3-year return: 6.63%

SBI Magnum Gilt Fund has a good reputation for managing a portfolio that mostly consists of government securities. If you are looking for a mix of security and returns, particularly during periods of declining interest rates, this fund might be ideal for you. The fund capitalizes on interest rate movements while maintaining a lower credit risk profile.

4. ICICI Prudential Gilt Fund

● AUM: INR 6361.6 crore
● NAV: INR 102.8496
● Expense Ratio: 1.09%
● 1-year return: 7.99%
● 2-year return: 8.11%
● 3-year return: 6.40%

ICICI Prudential Gilt Fund is known for its active management and flexibility in adjusting to movements in interest rates. It provides long-term returns and invests in a diversified portfolio of government securities. If you are comfortable with moderate volatility in exchange for potential higher returns, go for this fund.

5. Aditya Birla Sun Life Government Securities Fund

● AUM: INR 1865.69 crore
● NAV: INR 82.1782
● Expense Ratio: 0.47%
● 1-year return: 10.03%
● 2-year return: 8.31%
● 3-year return: 6.37%

Aditya Birla Sun Life Government Securities Fund is a great option for investors willing to capitalize on the safety and liquidity of government securities. With prudent management, it delivers consistent returns. This makes it suitable for long-term investors looking for stability in government securities.

Conclusion

Considering the balanced risk profile and security that the top gilt funds offer, you may consider diversifying your portfolio with one of these mutual funds. Particularly, if you are conservative with your investment approach but expect higher returns compared to fixed deposits or savings accounts over the long term, go for gilt funds.

The information provided in this article is for educational and informational purposes only and should not be considered as financial or investment advice. Investment in gilt mutual funds involves risk, and past performance is not indicative of future results. Before making any investment decisions, you should consult with a licensed financial advisor and carefully assess your risk tolerance, financial situation, and investment objectives. The recommendations made are based on current data as of September 2024 and may not be suitable for every investor. The author and publisher are not liable for any losses or damages resulting from reliance on the information provided.