With over 22% SIP returns, these two Gilt funds are good for long-term SIP

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Should you add a gilt fund to your portfolio?

Gilt funds are a type of debt-based fund that has grown in popularity in recent years. Although Gilt Funds have almost minimal credit risk due to their nature of investing in government assets, this does not mean that these funds or government securities are safe. These funds are subject to duration risk.
The benefits of these products cannot be overemphasized, especially in this time of high market volatility.

Gilt funds are likely to be attractive investments, but investors should be aware of price volatility and interest rate risk before doing so. Golden funds can be used as a balancing element in your portfolio, offering moderate returns while posing a little risk.

DSP Government Securities Fund - Direct-Growth Plan

DSP Government Securities Fund – Direct-Growth Plan

This is an open-ended Gilt mutual fund plan of DSP Mutual Fund. As of February 28, 2022, this fund had Rs 417 crore in assets under administration. The Net Asset Value of the Fund as of March 22, 2022 is Rs 79.6672. The fund’s cost ratio is 0.54%, which is below the category average.

Compared to its peers, the fund performed well. This is a low to moderate risk investment. This fund also received a four-star rating from CRISIL. The fund’s credit profile is moderate, indicating that it has lent to high quality borrowers. Since 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%, including 67.85% in government securities. Investors who wish to invest money for a longer period of time, but whose primary concern is the security of their assets.

SIP Returns

Mandate Absolute returns Annualized returns
1 year 1.62% 3.02%
2 years 4.38% 4.19%
3 years 10.29% 6.47%
5 years 22.86% 8.17%
Sun Life Aditya Birla Government Securities Fund - Direct Plan - Growth

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

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

Its performance over the past year has been poor compared to its peers. It’s quite a risky bet that can result in a loss. The fund’s credit record is exceptional, suggesting that it has lent to high quality borrowers. Since 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%, of which 97.43% is government securities. Investors who wish to invest money for a longer period of time, but whose primary concern is the security of their assets.

SIP Returns

Mandate Absolute returns Annualized returns
1 year 2.21% 4.13%
2 years 5.05% 4.82%
3 years 10.53% 6.62%
5 years 22.20% 7.96%
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