Axis Gilt Fund Benefits Features And More

Some investors who are new to mutual fund investing, do not want to expose their finances to market volatility. Such investors can consider the option of investing in debt mutual funds. While equity mutual funds predominantly invest in equity and equity related instruments for generating capital appreciation, debt funds invest the majority of their investible corpus in bonds, corporate securities, treasury bills, repo rates, certificate of deposits, commercial papers, and other money market instruments.

Although debt funds do not invest in the equity market, that does not make them a risk free investment. Debt funds are prone to other types of risks like credit risk and interest rate risk. If you want to invest in a debt fund that invests in government backed securities, you can consider investing in gilt funds.

What is a gilt fund?

As per market regulator SEBI’s (Securities and Exchange Board of India) definition, a gilt fund “invests exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt-oriented schemes.”

A gilt fund is an open-ended debt scheme that aims at offering stable returns (however, not guaranteeing the same) by investing in high rated fixed income securities like central and state government bonds.

How does a gilt fund work?

Whenever the Indian government (State or Central) requires funds, it reaches out to the government’s banker i.e. the Reserve Bank of India. The Reserve Bank of India has the task of accumulating the necessary funds from banks and insurance agencies to help the government and lends the funds thus accumulated to the government . The Reserve Bank of India issues government securities in exchange for the borrowed sum. These securities have a fixed maturity date. A gilt fund manager subscribes to these securities and when they mature, the fund earns interest.

Axis Gilt Fund – A debt mutual fund by Axis Mutual Fund

Axis Gilt Fund is an open-ended debt scheme investing in government securities across maturity timelines. The investment objective of Axis Gilt Fund is to generate credit risk-free returns through investments in sovereign securities issued by the Central Government and / or State Government.

Benefits of Axis Gilt Funds

• Axis Gilt Fund is an open-ended GILT (Government securities) fund which invests in a portfolio of government securities
• The fund may also invest in bonds backed by the central government or respective state
governments
• The fund manager strives to enhance portfolio returns by actively managing interest rate
risks arising due to market volatility
• Axis Gilt Fund doesn’t have default risk as securities are backed by a sovereign guarantee
• The scheme allows easy access to the GILT market
• Axis Gilt Fund is suitable for an investment horizon of 3 years or more

Liquidity offered

The Scheme offers Units for Subscription and Redemption at NAV based prices on all Business Days. Under normal circumstances, the AMC shall dispatch the redemption proceeds within 10 business days from the date of receipt of request from the Unit holder.

Who is eligible for investing?

All categories of investors (whether existing or new Unitholders) as permitted under the Scheme Information Document of the Scheme are eligible to subscribe under Direct Plan. Investments under Direct Plan can be made through various modes offered by the Fund for investing directly with the Fund (except where investors’ applications for subscription of units are routed through Distributors).

Minimum investment amount

Investors who wish to make a lumpsum investment must invest a minimum of Rs. 5000/- and in multiples of Re. 1/- thereafter. To start a Systematic Investment Plan (SIP) the minimum investment sum is Re. 1000/- and in multiples of Re. 1/- thereafter.

Entry / Exit load

Entry load is not applicable for this investment product. The exit load for Axis Gilt Fund is NIL.

Things to consider before investing in Axis Gilt Fund

Retail investors are expected to determine their risk appetite before investing in the scheme. Investments made in Axis Gilt Fund do not guarantee returns. The scheme might get affected by changes in the interest rate. Fixed income securities such as government bonds, corporate bonds, money market instruments, and derivatives run price risk or interest rate risk. Generally, when interest rates rise, prices of existing fixed income securities fall and vice versa. To understand other risks associated with the scheme, investors may refer to the scheme information document (SID).
Axis Gilt Fund
An open ended debt scheme investing in government securities across maturity

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.