In this article, we provide a step-by-step guide to choose a gilt mutual fund. Gilt mutual funds are those that invest a minimum of 80% of their portfolio in government securities (Gsecs or gilts). We have already discussed the basics of gilt mutual funds and when to invest in a two-part FAQ. We recommend newbie…

Shushanth asks, “dear Pattu Sir, thank you for the recent articles about gilt mutual funds, but I think they are too volatile for me. Can I use banking and PSU funds instead of gilt funds for long-term goals?” The underlying assumption here seems that Banking and PSU debt funds are “safe” and less volatile than…

We answer a set of questions on gilt mutual funds asked by investors. Interest in gilt mutual funds has increased for two reasons: credit events in debt funds and a gradual reduction in PPF interest rate. We wanted to write an article on selecting gilt mutual funds but realised that before we get into the…

Generally, debt products are expected to have lower volatility than equity mutual funds. However, many investors find that debt fund volatility is a lot higher than what they anticipated. This is because of incorrect expectations and a poor understanding of the factors that influence debt fund returns. In this article, we discuss a simple way…

A sentiment that has gained popularity after the Franklin debt funds fiasco is, “avoid all kinds of risk in debt funds”. Now I notice investors preferring liquid funds even for long-term goals stating they cannot tolerate any NAV fluctuations. Does it make sense to use such short-term funds like liquid funds even for long-term goals?…

In the past week,  gilt mutual funds fell between 1-2%. Dynamic bond funds fell 0.8% to 1%, Banking and PSU funds, corporate bond funds and all categories of debt funds holding medium to long term bonds fell by varying extents. Why did this happen? Will it impact the stock? What it means to your investments.

Franklin Templeton AMC has received 1252.44 crores from Vodafone Idea towards full principal and interest dues for the period June 12 to July 9, 2020. The AMC will now close the segregated portfolios (side-pocket) and payout investors. Here how this payout will be taxed. Thanks to an amendment in budget 2020, the taxation of segregated…

Gilt mutual funds can be tricky to understand. Those who assume they have invested in “safe” govt bonds would be shocked to see how much their prices (NAV) fluctuates daily and can even lead to negative or low returns over a few years. In this article, we find out if a market timing method can…

The titular question was posed by a reader a few days ago. Naturally, the AMC would allow a SIP from any MF, but does it make sense to start one in a gilt mutual fund that invests in long-term govt bonds? We look the SIP returns of I-BEX a composite sov bond index to understand…

While corporate investors withdrew from several Franklin debt funds forcing the closure of six funds (a first in India), the AMC lost 28,664 Crores of debt fund AUM from 31st Dec 2019 to April 30th 2020. Amusingly, one of their debt funds grew 520% in AUM! A look at the change in their debt AUM.