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Difference between revisions of "Gilt Mutual Funds"
Cooleo (talk | contribs) (Created page with "{{Alphabets}} What are Gilt funds? Why should we invest in them? Gilt Funds are one of the safest type of mutual funds. This is because the schemes w...") |
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| − | What are Gilt funds? Why should we invest in them? | + | ==What are Gilt funds? Why should we invest in them?== |
| − | Gilt Funds are one of the safest type of mutual funds. | + | '''Gilt Funds''' are one of the safest type of mutual funds. |
| − | This is because the schemes will invest only in Government securities. | + | This is because the schemes will invest only in Government securities of various maturities / duration. |
So, investors are protected from credit risk because of the Government guarantee that comes along with it. | So, investors are protected from credit risk because of the Government guarantee that comes along with it. | ||
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Each of these bonds will have a different maturity date. | Each of these bonds will have a different maturity date. | ||
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| + | ==Volatility== | ||
| + | Gilt funds are highly volatile and their NAV rates move very sharp often mimicking as if they are an equity instrument. | ||
| + | |||
| + | Some times, their returns can be drastically negative too. | ||
| + | |||
| + | Economic factors such as Union Budget, Government spending and even US Fed rate tweaking will have an impact on the NAV of these funds. | ||
==Related Topics== | ==Related Topics== | ||
*[[Equity Mutual Funds]] | *[[Equity Mutual Funds]] | ||
Revision as of 02:18, 26 December 2017
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What are Gilt funds? Why should we invest in them?
Gilt Funds are one of the safest type of mutual funds.
This is because the schemes will invest only in Government securities of various maturities / duration.
So, investors are protected from credit risk because of the Government guarantee that comes along with it.
These schemes should be preferred by risk averse and conservative investors where safety of capital is of utmost importance than return.
When ever Government needs money, it raises by issuing Government security bonds.
Each of these bonds will have a different maturity date.
Volatility
Gilt funds are highly volatile and their NAV rates move very sharp often mimicking as if they are an equity instrument.
Some times, their returns can be drastically negative too.
Economic factors such as Union Budget, Government spending and even US Fed rate tweaking will have an impact on the NAV of these funds.
Related Topics
- Equity Mutual Funds
- Debt Mutual Funds
- Balanced Funds
- Diversified Equity Funds
- Equity Linked Savings Schemes (ELSS)
- Liquid Mutual Fund Schemes
- Short-term Debt Mutual Fund Schemes
- Arbitrage Mutual Fund Schemes
- Exchange Traded Funds
- International Mutual Fund Schemes
- Smallcap Mutual Fund Schemes
- Thematic Mutual Fund Schemes
- Dynamic Bond Funds
- Monthly Income Plans