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Gilt Funds Get Hotter

The flows into gilt funds have risen lately due to a number of favourable factors, including removal or reduction of exit load

In March 2015, 41 gilt funds have attracted assets of ₹14,140 crore. This can be attributed to a number of reasons. First, since the RBI looks poised to cut interest rates, fund managers are locking in higher rates. Second, income funds are moving money into G-secs. Finally, reduction or complete removal of exit load on gilt funds has also boosted flows into G-secs. Also, in some cases the cutoff period for the levy of exit load has been reduced.

Exit load is the fees charged by mutual funds at the time of redemption, especially before a certain period. This charge is calculated as a percentage of the amount invested. The two accompanying tables detail the change in AUMs and exit loads (tenure) of gilt funds.

Indiabulls Gilt fund is the only fund which has increased its load percentage as well as exit load tenure to 1 per cent for redemption within one year. Earlier there was no exit load.

Gilt Fund AUM (₹cr)

Scheme nameMar-15Dec-14Difference
HDFC Gilt-LT Plan2464.88988.041477
SBI Magnum Gilt-LT Plan1233.26515.21718
ICICI Prudential LT Gilt1585.271044.58541
Kotak Gilt Investment833.01445.22388
Reliance Gilt Securities1012.8651.78361
IDFC Govt Securities-Inv Plan1050.9705.85345
UTI Gilt Advantage LT Plan613273.99339
ICICI Pru Gilt-Inv Plan-PF Option776.67445.42331
BSL Govt Securities-LT Plan888.88646.16243
JP Morgan India Govt Securities797.04638.03159