With Over 22% SIP Returns, These Two Gilt Funds Are Good For Long Term SIP

As interest rates appear to have bottomed out, a lot of investors are contemplating investing in gilt funds. Gilt funds, also known as Government Securities funds, are debt securities issued by the Reserve Bank of India (RBI) on behalf of the Indian government or state governments.

Should You Add Gilt Fund To Your Portfolio?

Gilt funds are a type of debt-based fund that has grown in popularity in recent years. While Gilt Funds have nearly minimal credit risk due to their nature of investing in government assets, this does not mean that these funds or government securities are without danger. These funds are subject to duration risk.
The advantages of these products cannot be emphasized, especially at this time of high market volatility.

Gilt funds are likely to be worthwhile investments, but investors should be aware of the price volatility and interest rate risk before doing so. Gilt funds may be employed as a balancing component in your portfolio, providing moderate returns while posing a little risk.

DSP Government Securities Fund - Direct Plan-Growth

It is an open-ended Gilt mutual fund scheme from DSP Mutual Fund. As of February 28, 2022, this fund has Rs 417 crores in assets under administration. The Fund's NAV as of March 22, 2022, is Rs 79.6672. The fund's cost ratio is 0.54 percent, which is lower than the category's average.

In comparison to its counterparts, the fund has performed well. It's a low-to-moderate-risk investment. This fund has also received a four-star rating from CRISIL. The fund's credit profile is moderate, indicating that it has been loaned to high-quality borrowers. Because most funds in this category lend to stronger borrowers, the risk of default is higher in this fund than in others in the category.

The fund has a debt investment of 67.85 percent, including 67.85 percent in government securities. Investors that desire to invest money for a longer period of time, but whose primary concern is the security of their assets.

SIP Returns

Tenure	Absolute Returns	Annualised Returns
1 Year	1.62%	3.02%
2 Year	4.38%	4.19%
3 Year	10.29%	6.47%
5 Year	22.86%	8.17%

Aditya Birla Sun Life Government Securities Fund - Direct Plan-Growth

Launched in 2013, this Gilt mutual fund scheme is an open-ended fund. As of February 28, 2022, this program had Rs 1,104 crores in assets under administration. The fund's net asset value (NAV) as of March 22, 2022, is Rs 69.5051. The expense ratio of the fund is 0.29 percent, which is lower than the category average.

Its performance over the last year has been mediocre when compared to its peers. It's a fairly hazardous bet that might result in a loss. The fund's credit record is outstanding, suggesting that it has been loaned to borrowers of high quality. Because most funds in this category lend to comparable borrowers, the risk of default is similar across the board.

The fund has a debt investment of 97.41 percent, with 97.43 percent in government securities. Investors that desire to invest money for a longer period of time, but whose primary concern is the security of their assets.

 
SIP Returns

Tenure	Absolute Returns	Annualised Returns
1 Year	2.21%	4.13%
2 Year	5.05%	4.82%
3 Year	10.53%	6.62%
5 Year	22.20%	7.96%

Disclaimer

Mutual fund investments are subject to market risk. Read all scheme-related documents, and Terms and Conditions carefully before investing. The above-mentioned information is purely informational and doesn't guarantee any return. The Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.