ICICI Prudential’s gilt mutual fund emerged as the top performer in the category, delivering an annualised five‑year return of just over 6 per cent. The data, released by Livemint Money, shows that all 23 gilt schemes tracked by the platform posted positive returns, keeping the entire segment in the green for the first time in several quarters. Gilt funds are required to invest at least 80 per cent of their assets in government securities of varying maturities, making them a low‑risk avenue for retail investors seeking stable income.
5 per cent and the yield curve flattening, these funds have been able to capture higher coupon payments while preserving capital, a combination that appeals to salaried professionals wary of equity market volatility. The broad‑based outperformance also saw Bandhan Gilt Fund and Axis Gilt Fund rank among the top five performers over both one‑year and five‑year horizons, underscoring the depth of the segment. For investors tracking the Nifty 50, the steady gains in gilt funds provide a counter‑balance to the equity‑heavy index, especially as the Sensex has been oscillating within a narrow range amid global rate concerns.
While gilt funds cannot match the upside of equities, their consistent returns and capital protection make them a useful component of a diversified portfolio for risk‑averse salaried savers. Retail investors should compare expense ratios and duration exposure before allocating, as a modest tilt towards gilt funds can enhance overall portfolio stability without sacrificing too much growth potential.