5 Top-Rated Mutual Funds That Invests In Government Bonds, Given Over 21% Returns On 5-Year

Those who wish to diversify their portfolio with fixed-income assets or build an emergency fund might consider beginning a systematic investment plan (SIP) in debt funds such as Gilt Mutual Funds. SIP in these funds helps in keeping the risk low over the investment by using Rupee Cost Averaging. Long-duration funds long-duration funds, and dynamic bond funds, have more volatility than other debt funds due to interest rate risk.

Why Should you add Gilt Mutual Funds to your portfolio?

Gilt funds invest exclusively in government assets or G-Secs with medium to long-term maturities. As a result, these funds meet investors' security requirements. These funds are debt funds. They differ from bond funds in that the latter may invest a portion of their assets in riskier corporate bonds.

Gilt funds invest in low-risk debt instruments like government securities, ensuring capital preservation while providing moderate returns. Despite the lower return, a gilt fund has superior asset quality than a standard equities fund. It is frequently seen as a good investment shelter for risk-averse individuals seeking to invest in government assets.
Investors who are looking for a safe investment for the long term with good returns can opt to invests in these funds.

 

Top Performing Gilt Mutual fund in 5 Year SIP

IDFC Government Securities Fund - Investment Plan - Direct Plan-Growth

It is an open-ended Gilt mutual fund scheme from IDFC Mutual Fund. It has Rs 1,449 Crores assets under management as on 28 February 2022 and recently declared NAV is Rs 30.472 as of 16th March 2022. Its expense ratio is 0.62%. The fund is low top moderate risky when comes to investing. However, it has delivered good returns, better than its peer funds. Rating agency CRISIL has rated this fund with 4 stars. 

Edelweiss Government Securities Fund - Direct Plan-Growth

It is also an open-ended Gilt mutual fund scheme from Edelweiss Mutual Fund. It has Rs 113.14 Crores assets under management, and the recently declared NAV is Rs 20.664 as of 16th March 2022. Its expense ratio is 0.69%. When it comes to investing, the fund is low to moderately risky. However, it also outperformed its peer funds in terms of returns. The fund has 46.81% investment in Debt of which 46.81% is in Government securities. Rating agency CRISIL has rated this fund with 5 stars. 

DSP Government Securities Fund - Direct Plan-Growth

Launched on 01 January 2013 by the DSP Mutual Fund. It is also an open-ended Gilt mutual fund scheme. It has Rs 416.71 Crores assets under management, and the recently declared NAV is Rs 79.662 as of 16th March 2022. Its expense ratio is 0.54%. When it comes to investing, the fund is low to moderately risky. However, it also outperformed its peers' funds in terms of returns. The fund has 67.85% investment in Debt of which 67.85% is in Government securities. Rating agency CRISIL has rated this fund with 4 stars.

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

It's a 9-year-old open-ended Gilt mutual fund scheme from Aditya Birla Sun Life Mutual Fund launched on 01 January 2013. It has Rs 1,103.95 Crores assets under management as on 28 February 2022 and recently declared NAV is Rs 69.4846 as of 16th March 2022. Its expense ratio is 0.29%, almost half of the category average expense ratio. The fund possesses moderate risk, investment in this fund is risky. However, it has delivered good returns, better than its peer funds. The fund has 97.41% investment in Debt of which 97.43% is in Government securities. Rating agency CRISIL has rated this fund with 3 stars. 

Kotak Gilt - Investment - Direct Plan-Growth

It is an open-ended gilt mutual fund launched by the Kotak Mahindra Mutual Funds on 01 January 2013. Its AUM is worth Rs 1,84.68 Crore. While the NAV is Rs 85.6019 as on 16th March 2022. Its expense ratio is 0.4%, close to its category average expense ratio. It has given good returns over the year since its inception, better than the category average. However, the is risky to invest in and poses the risk of capital loss. Fund has 92.28% investment in Debt of which 92.28% is in Government securities. CRISL rated this fund 3 stars. 

Returns Over The Years

Absolute And Annualised Returns

Mutual Funds	1-Year	2-Year	3-Year	5-Year	Since Inception
IDFC Government Securities Fund - Investment Plan - Direct Plan - Growth	6.43%	7.18%	10.05%	8.62%	9.56%
Edelweiss Government Securities Fund - Direct Plan - Growth	6.99%	7.91%	9.76%	8.38%	9.39%
DSP Government Securities Fund - Direct Plan - Growth	5.32%	6.44%	9.66%	8.30%	8.49%
Aditya Birla Sun Life Government Securities Fund - Direct Plan - Growth	6.84%	6.85%	9.18%	8.43%	9.48%
Kotak Gilt - Investment - Direct Plan - Growth	5.37%	6.69%	8.92%	8.06%	8.64%

SIP Absolute Returns

Mutual Funds	1-Year	2-Year	3-Year	5-Year
IDFC Government Securities Fund - Investment Plan - Direct Plan - Growth	2.63%	5.19%	11.36%	24.42%
Edelweiss Government Securities Fund - Direct Plan - Growth	2.16%	5.94%	11.80%	23.98%
DSP Government Securities Fund - Direct Plan - Growth	1.76%	4.49%	10.45%	23.00%
Aditya Birla Sun Life Government Securities Fund - Direct Plan - Growth	2.30%	5.15%	10.63%	22.32%
Kotak Gilt - Investment - Direct Plan - Growth	1.55%	4.39%	10.07%	21.74%

Source - Money Control

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.