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What is constant maturity fund?

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James Holden

Published Mar 04, 2026

What is constant maturity fund?

A constant maturity gilt fund, however, invests in a mix of government bonds with maturity of around 10 years. Whatever the interest rate scenario, the fund's portfolio duration is maintained at 10 years. Unlike traditional gilt funds, it takes a much more passive approach towards government bonds.

Besides, what is SBI Magnum Constant Maturity Fund?

899 25-899 SBI Mutual Fund The scheme seeks to provide returns to the investors generated through investments predominantly in Government securities issued by the Central Government and/or State Government such that the Average Maturity of the portfolio is around 10 years.

One may also ask, what is meant by Gilt Fund? Gilt funds are debt mutual fund schemes that invest in government issued bonds and securities of varying maturities. The various types of gilt funds include long-term gilt funds and short-term gilt funds. Long-term gilts funds invests in long dated government bonds with maturities, typically…

Keeping this in view, how does a gilt fund work?

Gilt funds only invest in government securities ranging from medium to long-term horizons. So, these funds satisfy the security needs of investors. Gilt funds invest in low-risk debt instruments such as the government securities, which ensures the preservation of capital along with moderate returns.

Which debt fund is best?

5. Top 10 Best Debt Mutual Funds in India

Fund name3-year returnsLink
Axis Banking & PSU Debt Fund8.39%Invest Now
Kotak Dynamic Bond Fund7.83%Invest Now
SBI Magnum Gilt Fund7.07%Invest Now
Kotak Corporate Bond Fund7.94%Invest Now

What is SBI Dynamic Bond Fund?

SBI Dynamic Bond Fund. Debt: Dynamic Bond. 5 Value Research 2025 25-2025 SBI Mutual Fund The scheme seeks to provide investors attractive returns through investment in an actively managed portfolio of high quality debt securities of varying maturities.

How is SBI Banking and Financial Services Fund?

SBI Banking & Financial Services Fund aims to provide investors with opportunities for long-term capital appreciation by predominantly investing in equity and equity related securities of companies engaged in banking and financial services*.

What is SBI Magnum Income Fund?

SBI Magnum Income Fund. Debt: Medium to Long Duration. 4 Value Research 567 25-567 SBI Mutual Fund The scheme seeks to provide investors an opportunity to generate regular income through investments in debt and money market instruments such that the Macaulay duration of the portfolio is between 4 years and 7 years.

Why gilt funds are falling?

“Returns of gilt funds are directly linked to fall in G-sec yields. Various factors contributed to this fall in G-sec yields – large scale OMO buybacks by RBI, global growth concerns, softening in crude prices and benign CPI,” says Naresh Kumar, fund manager (fixed income), Tata Mutual Fund.

What is HDFC Short Term Debt Fund?

About HDFC Short Term Debt Fund
The Scheme is an open-ended scheme and is a short-duration low-risk debt fund. It seeks to generate regular income through investment in debt securities and money market instruments. The Scheme is benchmarked against CRISIL Short-Term Bond Index.

What is Crisil Composite Bond Fund Index?

Composite Indices
CRISIL Composite Bond Fund – To track the performance of a debt portfolio that includes government securities and AAA/AA rated corporate bonds.

Is it right time to buy gilt funds?

For an investor, gilt funds can be an ideal blend of low risk and reasonable returns. However, the performances are highly dependent on the movement of interest rates. So, a falling interest rate regime would be the best time to invest in gilt funds.

Is it good to invest in Gilt Fund?

Gilt mutual funds are considered ideal for long-term debt mutual fund investors with an aggressive risk profile. However, these schemes are extremely sensitive to interest rate environment. Simply put, investors can make very high returns if they can get into these schemes just when the rates start falling.

Are gilts a good investment?

Investing in gilts is generally considered to be less risky than shares. However, fixed interest securities are more likely than shares to be affected by inflation (and changes in interest rates) and there might be credit/default risks if you choose corporate bonds or non-UK government bonds.

Can gilt funds give negative returns?

Gilt mutual funds invest in government securities (G-Sec) with medium and long term maturity. These mutual funds are very sensitive to interest rate changes and can yield double-digit negative returns. However, they also have the potential to offer double-digit positive returns.

What is difference between gilt and debt fund?

Gilt Funds invest entirely in G-secs with different maturity date. While Investment under Debt funds has two classifications, short-term debt funds and long-term debt funds. Short-term debt fund invests in Commercial papers, certificate of deposits and bonds with shorter maturity period.

What is difference between liquid fund and debt fund?

Liquid funds invest in fixed income securities that have a maximum maturity profile of 91 days. While there are debt funds such as overnight funds that invest in overnight securities with a maturity of one day, there are gilt funds that invest in government securities with a maturity of 10 years.

Are gilts tax free?

Interest on gilts is paid gross, but is liable for Income Tax. This makes gilts particularly attractive to non-tax payers. Any profits from selling gilts are tax-free and don't have to be included on tax returns.

What is the difference between a bond and a gilt?

A gilt-edged bond is simply a high-grade type of debt. What blue-chip stocks are to ordinary equities, gilt-edged bonds are to regular bond issues. As with any bond, the federal or corporate issuer is borrowing money from investors at a set rate of interest for a specific period of time.

Do gilt funds have lock in period?

HDFC Gilt fund is a type of debt fund which invests in government securities, central government loans and state development loans of medium to long-term horizon with a lock-in period of 5 years.

What does gilt stand for?

Government Issued Long Term

What is 10 Year Gilt Fund?

Gilt Funds are a type of debt Mutual Funds that predominately invest in Government Securities (G-Secs) issued by the RBI (Reserve Bank of India) on behalf of the government. And the other is 10-year gilt funds that will invest in government securities with a maturity of 10 years.

Which mutual fund is best in SBI?

4. Top 5 SBI Mutual Funds
Top 5 SBI Mutual Funds1yr3yr
SBI Banking & Financial Services Fund-Regular Plan (Equity Banking)16.118.74
SBI Bluechip Fund (Equity large Cap)9.8611.48
SBI Consumption Opportunities Fund (Equity FMCG)28.2619.43
SBI Dynamic Asset Allocation Fund (Hybrid Asset Allocation Fund)10.369.58

Which mutual fund is best to invest in?

Top Mutual Fund Schemes to Invest in FY 2018-19
  • Mirae Asset Large Cap Reg-G. Invest Now.
  • Motilal Oswal Multicap 35 Reg-G. Invest Now.
  • SBI Magnum MultiCap-G. Invest Now.
  • Kotak Standard Multicap Reg-G. Invest Now.
  • Aditya Birla SL Equity-G. Invest Now.
  • ICICI Pru Multicap-G. Invest Now.
  • Axis Bluechip-G. Invest Now.
  • ICICI Pru Bluechip-G.

What is the best gold mutual fund?

Usually categorized as "Precious Metals," gold mutual funds typically hold stocks of mining companies. A few of the best gold mutual funds, in terms of long-term performance, long manager tenure and average to low expense ratios include Tocqueville Gold (TGLDX) and Gabelli Gold Load-Waived (GLDAX.

Which debt fund gives highest return?

Top 10 Debt Mutual Funds
Fund NameCategory1Y Returns
Kotak Corporate Bond FundDebt9.0%
Axis Banking & PSU Debt FundDebt9.2%
Kotak Bond Short Term PlanDebt9.5%
SBI Magnum Medium Duration FundDebt11.3%

How do I choose a debt fund?

“If you have an investment horizon of three years, choose a fund with a lower maturity than three years, so that you do not face that volatility,” said Pathak. You can find the average maturity of a debt scheme in its monthly factsheet. Pathak also emphasized on not to look at the past returns.

Are debt funds tax free?

Long term capital gains upto Rs 1 Lakh is totally tax free. Tax on debt mutual funds - The minimum holding period for short term capital gains in debt funds is 3 years. Short term capital gains (if the units are sold before three years) in debt mutual funds are taxed as per applicable tax rate of the investor.

Is Debt Fund better than fixed deposit?

Debt funds offer better post-tax returns to the investor if held for more than three years, with good liquidity options. Liquid and ultra-short term funds invest in overnight call money that do not have the credit risks, and they also provide better returns compared to fixed deposits.

Which is better debt fund or fixed deposit?

The big difference is that debt funds offer a lot of flexibility and choice. Bank FDs are now giving just about 7-7.5% interest on their FDs. That is why debt funds give returns over 9% on an average. Of course, you can still get higher returns if you take credit risk but let us forget about that for the time being.

Which is better liquid fund or debt fund?

Although liquid funds are less risky than equity schemes, they do entail broader risks like sharp revisions in interest rates or likelihood of diminished credit quality. Debt funds invest in bonds and debentures. The prices of these bonds are associated with benchmark interest rates.

Which is the best short term debt fund?

4. Top 10 Short-Term Mutual Funds
Fund Name1-year ReturnsLink
SBI Magnum Constant Maturity Fund13.1%Invest Now
HDFC Short Term Debt Fund9.95Invest Now
Aditya Birla Sun Life Floating Rate Fund-Long Term Plan8.64%Invest Now
ICICI Prudential Ultra Short Term Fund8.41%Invest Now

Is it right time to withdraw money from mutual fund?

One line answer: When you achieve your financial goal! Over a long period of time, the market will always go up. Before investing your money in a mutual fund, make sure you have a financial planner who is taking care of your financial goals. You should not withdraw your money from the mutual fund until you need it.

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