No Glitter Left In Gilt Funds

Gilt funds or Government securities funds, most liquid fund as compared to other debt instruments, is also going through a tough time. It has witnessed massive outflows of Rs6,305 crore since the start of 2018 till September, as per the data from Association of Mutual Funds in India (Amfi). Market experts attribute the outflows towards the interest rate cycle in India which has reversed with rates moving up sharply on the back of unfavorable macro situations impacting the domestic and global markets since September 2017.  The 10-year benchmark bond yield has risen from 6.65 per cent in September 2017 to 7.98 as on October 12, 2018. That said, the ongoing US-China tariff war, rising crude prices, widening current account deficit (CAD), and emerging market sell-off has also added pressure on the currency. This has led to more outflows from the system as depreciating currency also...