IDFC Gilt Fund

Gilt funds are Mutual funds that invest in government securities for medium to long-term maturity periods. IDFC Gilt Fund is an open-ended target mutual fund that primarily invests in debt bonds issued by the government of India. These bonds themselves do not carry any risk factors as an investment made by any individual is backed up by the government of India.

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Fund in Brief

IDFC Gilt Fund has been operating in the market for nearly 20 years intending to help investors achieve promised returns by investing funds in marketable securities. IDFC Gilt Fund prioritizes getting investors optimal returns with a guaranteed return of capital amount. It also maximizes liquidity by investing in government securities.

IDFC Gilt Fund offers two kinds of plans:

  • IDFC Gilt Fund Investment Plan 
  • IDFC Gilt Fund Constant Maturity Plan (earlier known as short term plan)

These two plans are further categorized into two plans:

  • Regular plan
  • Direct plan

These two variants are further sub-categorized as:

  • Growth plan 
  • Income Distribution and Cash Withdrawal Plan (IDCW)
  • Quarterly Income Distribution and Cash Withdrawal Plan (IDCW)
  • Annual Income Distribution and Cash Withdrawal Plan (IDCW)
  • Periodic Income Distribution and Cash Withdrawal Plan (IDCW)

IDFC Gilt Fund regular plan and Direct Plan are offered under two categories:

  1. Growth option

    Under Growth options, dividends are not declared. Instead, the income earned is attributed to the units, and they remain invested in the fund and reflect on Net Asset Value (NAV). 

  2. Dividend option

    Under this option, the fund house tries to declare the dividends whenever the fund deems fit or at the time of foreclosure of the fund. On the other hand, if the dividends are not declared, the income remains invested and reflects on the Net Asset Value (NAV). 

    If the declared dividends are paid to the unit holders whose names appear on the registry, then the unitholders have the option of choosing one of the following categories under the dividend option:

    • Dividend payout facility: Under the dividend payout facility, income attributed to the dividend will be paid to the unit holders during the scheme's tenure. The amount payable to the unitholders will be Rs 100 or less than a folio per unit.
    • Dividend reinvestment facility: Under dividend reinvestment facility, those unitholders who have received dividends during tenure can choose to reinvest the income in the funds. However, it should be done before the foreclosure. The dividends of those unitholders who do not get paid during the term will automatically get reinvested.
    • Dividend sweep option: Under this, unitholders get the option to reinvest their declared dividend into any other schemes by IDFC Mutual Fund.

 IDFC Gilt Fund Facts

Fund house

IDFC Mutual Fund

Launch date

December 01 2008

Return since launch

8.50%

Benchmark

CRISIL Dynamic Gilt Index

Risk meter

Moderate to low risk

Type

Open-ended

Assets

Rs 2030 Cr ( As of July 31 2021 )

Expense ratio

1.22% ( As of July 31 2021 )

Risk grade

Above average

Return grade

High

Minimum investment

Rs 5,000

Minimum additional investment 

Rs 1,000

Minimum SIP Investment

Rs 1000

Minimum no. of cheques

6

Minimum withdrawal

Rs 500

Minimum balance 

Rs 500

Lock-in period

Not Applicable

Exit load

0

Investment Objective

IDFC Gilt Fund prioritizes generating optimum income for the individuals who are investing. In addition, this scheme maintains liquidity by investing in government debt securities across all maturities. 

Fund Summary

IDFC Gilt Fund investment plan direct plan-growth:

  • Risk: Moderate
  • Expense Ratio as of August 31, 2021: 0.62%
  • Net Asset Value (NAV): Rs 29,9186 on September 03, 2021
  • Returns: 1 year
  • Compound Annual Growth Rate (CAGR): 11.5% (Past 3 Years)

IDFC Gilt Fund constant maturity plan direct plan-growth:

  • Risk: Moderate
  • Expense Ratio as of August 31, 2021: 0.62%
  • Net Asset Value (NAV): Rs 37,0312 on September 03, 2021
  • Returns: 1 year
  • Compound Annual Growth Rate (CAGR): 12.7% (Past 3 Years)

Fund Returns Summary

  1. IDFC Gilt Fund investment plan direct plan-growth return

    Tenure

    Annualized Income

    1 Year

    4.4%

    3 Years

    11.5%

    5 Years

    8.7%

    10 Years

    9.8%

    Since Inception

    8.5%

    *Returns are subject to change.

    *The investment risk in the investment portfolio is borne by the policyholder.

    *All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
  2. IDFC Gilt Fund constant maturity plan direct plan-growth returns

    Tenure

    Annualized Income

    1 Year

    4.6%

    3 Years

    12.7%

    5 Years

    10.1%

    10 Years

    9.8%

    Since Inception

    6.9%

    *Returns are subject to change.

    *The investment risk in the investment portfolio is borne by the policyholder.

Pros and Cons

Pros

Cons

Investment options for various maturity periods, mainly in government securities.

The fund is not suitable for retail investors.

You can start investing with as minimum as Rs.5000 and an additional Rs.1000.

If you sell the funds after three years of purchase, your income from it will be taxable.

Moderate to low-risk funds

Your name may not come in the unitholders' register, due to which you may not get the chance of the payout facility.

It is suitable for institutional investors.

It has surpassed all the expected benchmarks.

Benefits of investing in IDFC Gilt Fund

There are multiple benefits of investing in the IDFC Gilt Fund. Let's see one by one what investors avail when they invest in it:

  1. Low-risk funds

    IDFC Gilt Fund invests in the Government of India's debt securities and hence, the investor's savings are less likely to be defaulted because of the government of India backing it.

  2. Good performance

    IDFC Gilt Fund has shown good and consistent performance since its inception. The fund has been able to fulfil its objective of maximizing returns for the investors.

Fund house details

IDFC Mutual Fund is the ninth-largest fund house in India by its asset size, and it has experience of over two decades. IDFC Mutual Fund is promoted by IDFC Limited, a renowned company formed by the Government of India as the country's finest infrastructure finance company. IDFC Mutual Fund enables investors to invest smartly through a wide range of innovative and high-quality investment solutions. 

The main goal of IDFC Mutual Fund is to cater to the investors by providing them dynamic schemes with wide-ranging categories to create long-term value for them. In addition, the Fund house tries to be transparent with the customers in its endeavours hence, gaining more trust.

Who should invest in IDFC Gilt Fund?

Following people should consider investing in the IDFC Gilt Fund:

  • It is ideal for all individuals looking for a marginal increase in returns without losing their capital.
  • IDFC Gilt Fund is a moderate to low risk fund. So you can invest in these funds without having much knowledge about the market and the risk related to it. Also, if you want to avoid risks involved in mutual funds.
  • It is suitable for those who have no issue investing in debt-based funds.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

In conclusion

The IDFC Gilt Fund is a safe investment option, suitable for people with a low-risk appetite. It offers security to the invested money by focusing its investments in government securities. Admittedly, the returns may not be as high as what a high-risk equity fund might offer. However, investors can rest assured that they won't lose their invested capital.

FAQ's

  • Q. How to purchase units in IDFC funds?

    Ans: Purchasing units in IDFC funds is easy. You can make transactions online as well as offline. In offline mode, you can purchase by physically submitting a subscription application along with the required documents and cheques to the CAMS OPAT branches or the Official Point of Transaction acceptance (OPAT) branch before 3.00 pm. For online mode, you can visit the IDFC website and can complete all the formalities.
  • Q. How many days after redemption will I receive payment for the IDFC Gilt Fund?

    Ans: As per the SEBI guidelines, all payments must be made within 10 business days of the redemption request being accepted. For IDFC Gilt Fund redemption, you will receive payment after 1 day of the transaction request being accepted. 
  • Q. Is the income from the IDFC Gilt Fund taxable? 

    Ans: If you sell the fund unit before three years, it will be added to your income and taxed as per the slab. If you sell the Fund Unit after 3 years, income from the funds will be taxed at 20%.  As long as you hold the fund, you won't have to pay any tax on it.
  • Q. What documents are required for opening up the IDFC Mutual Fund account?

    Ans: Interested investors need to submit the following documents for opening up the new account:
    • Duly filled application form with two photographs
    • DD or cheque of the purchase amount
    • KYC documents ( Pan Card, address proof, information of income account)
    • Third-party declaration
  • Q. Who can invest in IDFC Gilt Fund?

    Ans: Any Residential Indian or Non-resident Indian (except for Canadian citizens) can invest in IDFC Gilt Fund.
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