Performance Evaluation of Gilt Mutual Fund Schemes in India

Abstract

Mutual fund is an investment vehicle for small investors with common financial goals to enter the market through pooling. There are different types of mutual fund schemes which are available to investors, such as equity schemes, debt schemes, gilt schemes, hybrid schemes, index schemes etc. Amongst these schemes, gilt schemes are considered as safest for risk averse investors because these are confined only to government securities. In the present study, growth of gilt schemes has been examined and the performance of selected gilt schemes has been evaluated for the period 1st January, 2013 to 31st December, 2017. 15 gilt schemes, one from each asset management company (AMC) have been selected on the basis contribution to assets under management (AUM) as on 31st December, 2017. NAVs were collected on monthly basis and S&P BSE Sovereign 10 year Bond Fund has been considered as benchmark index for comparison. A major decline in gilt schemes in terms of number and resources mobilized was observed during 2016 and 2017. It was found that all gilt schemes had generated positive returns throughout the study period and involved high risk during 2015 and 2016. Further, it was revealed that L& T Gilt Fund ranked on top and Sundaram Gilt Fund ranked at bottom in terms of risk adjusted measures.