Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,910.1553.35
Stock Analysis, IPO, Mutual Funds, Bonds & More

Should I invest my spare money in gilt funds?

If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

ET Online|
Nov 13, 2019, 04.55 PM IST
0Comments
Getty Images
Invest in MF
I am 25 years old. I want to invest my spare money in debt mutual funds. I already have a lot of equity exposure. I don't need this money for another 7 to 10 years. Can I invest in a gilt fund?
-Sharan Mehta

Tarun Birani, Founder and CEO, TBNG Capital Advisors, responds:

Gilt mutual funds invest in government securities (G-Sec) with medium and long term maturity. Data for the last 10 years shows that gilt funds have been very volatile. These mutual funds are very sensitive to interest rate changes and can yield double-digit negative returns. However, they also have the potential to offer double-digit positive returns.

We don’t recommend investments in gilt funds, particularly as a category, as they are volatile and we believe that any investor investing in a debt fund has a conservative risk appetite. The one-year returns and even long-term performances look good for gilt funds. For retail investors seeking to invest now, where we already had a series of rate cuts, these funds doesn’t look that promising.
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

Also Read

Can I invest in a gilt fund for six-eight months?

Can I invest in a gilt fund for six-eight months?

Will gilt funds’ ongoing rally continue? unlikely, say analysts

Some gilt funds are offering 16 per cent returns in one year. Should you invest?

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service