G sec , gilt funds are giving more returns

Gilt funds are currently giving more returns almost 16% per year. And current month has given 3 % return per month

Will it continue to give more for another 6 months ?

Investing in Gilt funds now is a bet on falling interest rates. As cliched as the saying “Past returns aren’t a guarantee of future returns” it holds true.

In the past year, we’ve had 3 rate cuts

If you think there are further rate cuts in the offing then Gilt funds are the way to play to that. Gilt funds perform well in a falling interest rate environment because, as yields fall, the bond prices rise, giving you capital appreciation. But they don’t do well in rising rate environments.

If not best to stick to accrual strategies.

This article gives a good overview:

Thank you . Will they deliver good returns even if there is no rate cut

That is subjective, most of times it is not necessary for yields to change only with rate change, they can move based on future expectations of economy as a whole. If fiscal deficit is narrowing then they will be less chances for govt to borrow money which is a positive thing for bonds. Currently India is planning to raise money in foreign currency which is again a positive thing for rupee sovereign debt. Few other positives in near to short term can include good rainfall, lower crude prices, availability of credit, good employment numbers, good GDP numbers all these with inflation in check as RBI base it’s monetary policy based mainly on Inflation and then growth , all these will set future expectations and positive returns are dependent on them.

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Thank you very much sir . A great helpful to me.