Gilt Funds or Dynamic Bond Funds – Where to Invest Now?

Before we begin, let’s understand the basic concept of Gilt (or Government bond funds) and Dynamic Bond Funds. Gilt Fund – A Gilt fund invests at least 80% of its portfolio in Government bonds. Government issues Securities for medium to long-term maturity periods. These funds typically have an average maturity of 3-5 years and thus are very prone to interest rate risk– the risk that arises due to changes in market interest rates. Funds maintaining a higher duration are more volatile due to high sensitivity to changes in interest rates over a short period. However, you may expect decent returns …

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