Gilt funds back in vogue

Investors pump in fresh Rs 908 crore in August

Gilt funds, which primarily invest in government securities (G-Secs), are back in vogue among investors. The month saw a whopping net inflows of Rs 908 crore. Last it was in April that this asset class could see close to Rs 1,000 crore of positive inflows.

The fund category has been sluggish for last three months. May and June witnessed cumulative net outflows of units worth Rs 830 crore.

However, amid sharp volatility in the weakening stock markets during August and profit booking in gold funds, investors seem to have taken shelter in Gilt funds last month.

And it all happened when gilt funds had a robust sale of Rs 1,764 crore - not seen since April this year.

Industry executives say that investors are once again betting long on gilt funds.

Gilts have seen rising interest from investors, especially from October last year. This can be gauged from the fact that for four months in a row, i.e; from October, 2012 to January, 2013; the fund category saw an unabated net inflow of over Rs 1,000 crore on an average per month.

As on 31 August, the assets under management (AUM) of Gilt funds stood at Rs 8,890 crore or one percentage of industry's overall AUM of Rs 7.66 lakh crore.

Table : Showing inflows and sales in Gilt funds so far in FY14
Month	net inflows/outflows	Sales
April	986	2083
May	498	802
June	332	414
July	96	1028
August	908	1764

All figures in Rs crore
Source : Association of Mutual Funds in India (Amfi)