Are gilt funds a good bet amid rising interest rates? What investors should know – Main category in focus
While gilt funds carry very low credit risk, they are not entirely risk-free. Their primary risk stems from fluctuations in bond prices, which can affect returns. These prices are influenced by several factors, including RBI interest-rate decisions, inflation, government borrowing, liquidity conditions, US Treasury yields, Federal Reserve policy, crude oil prices, foreign investor flows and geopolitical developments. Changes in any of these factors can trigger movements in bond yields and, in turn, affect gilt fund returns.
