Business Standard

Despite high returns, avoid gilt funds if you are a small investor

Entry and exit need to be timed, which is difficult for small investors


The returns from gilt funds could remain in double digits or higher than other debt fund categories if the rates fall

Tinesh Bhasin
Gilt and long-duration funds are giving double-digit returns as there are expectations that the Reserve Bank of India (RBI) will go for a rate cut in June. Gilts and longer-duration papers are highly sensitive to interest rate movements and the returns shoot up as rates fall.

The one-year average returns from gilt funds are at 10.18 per cent. In the same duration, the returns from the other gilt category — 10-year constant duration — are at 11.85 per cent. There is also the newly introduced long-duration debt category, which has given 11.53 per cent returns in the past year. The three

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First Published: May 29 2019 | 12:08 AM IST

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