News reports reveal that bond yield on 10-year government paper has fallen below 11%. This implies higher bond/gilt prices, which has propped up gilt funds net asset values (NAVs). According to reports in leading business dailies, yield on 10-year government paper fell below the 11% mark for over 6 months. In simpler terms bond/gilt prices have appreciated. This has pushed up the net assets of gilt fund portfolios, translating into higher net asset values (NAVs).
Open-ended, Gilt Schemes | NAV (Rs) |
Last week |
Last month |
Last year |
Since inception |
JM G-Sec (PFP) (Gr) | 12.0 | 1.2% | 2.3% | 16.1% | 16.5% |
JM G-Sec (RP) (Gr) | 11.9 | 1.1% | 2.4% | 15.2% | 15.3% |
Templeton Govt Sec (Gr) | 12.3 | 1.1% | 2.5% | 14.4% | 14.7% |
Birla Gilt Plus (LT) (Gr) | 11.7 | 1.1% | 2.4% | 13.1% | 13.7% |
Tata Gilt Sec. A (Reg) | 10.8 | 0.9% | 1.3% | 14.1% | 14.1% |
K Gilt Serial 2007 (Gr) | 11.5 | 0.9% | 1.9% | 13.6% | 13.8% |
DSP ML G-Sec. Fund A(Gr) | 11.7 | 0.8% | 2.2% | 13.3% | 13.7% |
Dundee Sov. Trust (Gr) | 11.9 | 0.8% | 2.2% | 10.5% | 11.3% |
Pru ICICI Gilt(IP)(Gr) | 11.8 | 0.7% | 1.9% | 12.6% | 12.9% |
Tata Gilt Sec. B (App) | 12.0 | 0.7% | 1.7% | 15.6% | 15.6% |
K Gilt Investment (Gr) | 12.5 | 0.6% | 1.6% | 11.4% | 12.0% |
Zurich(I) Sov Gilt (PT)(Gr) | 10.5 | 0.6% | 1.6% | 0.0% | 6.4% |
Birla Gilt Plus Inv. (Gr) | 11.3 | 0.5% | 1.5% | 10.6% | 11.0% |
Lower bond yields are driven by improved perception on the interest rate front. Investors expect a reduction in interest rates in the near term. Whether this actually happens is another matter altogether, as the Reserve Bank of India (RBI) has not implied this in any manner. However, for the time being, gilt fund investors won’t be complaining.
Sorry! There are no related views on news for this company/sector.
Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.
What should you do if the market falls? In this video, I'll tell you what I will do.
A favourable demand supply scenario makes a strong case for real estate prices.
Rahul Shah on whether Bharti Airtel will emerge as the next big thing in the Indian stock market
Ajit Dayal on how India's vaccine strategy will impact the markets.
More
Equitymaster requests your view! Post a comment on "Lower yields prop up gilt fund NAVs". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!