Those look dangerous. Though expense ratio is 0.20%
52W High :52.27
52W Low :49.40
1M Return -1.33%
Expense Ratio 0.20%
Liquidity Low
Sect Exp Ratio 0.17%
Sect Tracking Err 2.49%
AUM (Cr) 34.7
Data from fundamentals Zerodha
impact cost way too high
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Have you even looked at it ?
Look at the link he gave again, there are many options now with target maturity date, they seem to have some index behind them and that might be the reason for low cost.
This is a misunderstanding. Gilt fund needs active management, especially more during such times when interest rates are on the move.
Do they really?
Look at it this way, what exactly is the justification for mutual funds to charge over 0.5%, almost 3x of what they charge for overnight/ liquid funds?
Itās a rhetorical question, so I will answer again. Yes, Gilt fund do require fund management.
I am not sure where you get the notion that two separate fund types with completely different investment mandate will have expense ratio comparable to each other. And if it is X times acceptable but anything above X is insane. So donāt really know how to answer this question of yours.
But let me give a random example of my own:
Liquid ETFs are funds, similar to liquid funds. Nippon LiquidBEES and DSP liquid 1D are major fund among them and most widely used.
They both have expense ratio of around 0.65%. Yes, point six five percent.
If we go by your logic, Gilt funds are charging just 0.8x of what liquid ETF are charging, so they are insanely cheap?
I hope you see the futility of such comparison.
Finally, its free market and each fund house is competing for money so they use expense ratio as one of the marketing tool. And hence within category too fund expenses vary widely. So any point in time comparison of expense ratio is very difficult.
So in general if you have question about expense ratio of entire category, only option you have is to not invest in category.
But frankly, taking investment decisions, solely based on expense ratio never ends up well 
Hope this helps.
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Barely a fraction of liquid/overnight funds
Not questioning their popularity, only if it makes sense
Will anyone with even a basic understanding do such silly things, if so, god help them.
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āNeedā seems too strong. A target maturity fund does not need it. I buy today and i know what yield i will get for my holding.
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From my own experience, a lot of these dynamic funds are not worth the money and have not delivered. This was the case atleast few years before covid when i decided to stop using them. Only one that stood out to me was ICICI long term, but hard to say if it was skill or luck, but they did well for many years.
I remember not taking action during a nice fall in yields, waiting for the funds to āmanageā but all they did was sit on their hands as yields went down and then up. Expense is too high, back then i think it was closer or above one. I think expenses should be more rationally limited, taking away 10-20% of yield is just way too much. All the risk is with us, while they take away large portion of returns irrespective of whether they could deliver.
Same situation in credit risk funds, which on top has the risk that people with know-how can take out their money before the illiquid bonds are priced correctly after a credit event
So only short term high credit funds for me, target maturity gilt looks ok too. And if someone wants to take risk with dynamic bonds, then better check track record and hope they can continue performing. ICICI fund ( renamed to All seasons ) still looks good.
Based on the above, I checked on IDFC Crisil gilt 2027 in money control. It says - Yield to maturity 7.23%.
Does this mean, that If I buy this fund at the current NAV, I will get 10 (unit price i guess) + 7.23% every year until maturity or present NAV 10.17 + 7.23% on 10 (unit price) every year until maturity.
or is it
10.17 + 7.23% on maturity date i.e in 2027. If this is the case, my investment of 10.17 becomes 10.90 in 2027
I think if you make an investment of Rs.1000/-, then you will get a compounded annual return of 7.23% on that investment of Rs.1000/- minus the management fee.
As per my calculations, you should receive about Rs.1,322/- if you hold for exactly four years from today.
If we look from the NAV perspective, then the current NAV should be taken.
yield should be the % you get on current nav minus expenses as Suyash said.
You will get this if you hold till maturity. In between if interest rates change, then their will be M2M profits or losses ( or lower returns initially). 1 year back, this same fund had a yield of around 6%. So if someone invested in this one year back, he will get that much on maturity, but last year returns will be much lower so that from today, his yields can go up from 6% to 7%. So he gets 6% if held till maturity, while someone investing today in same fund will get 7.x%.
Basically a bond of rs x has to go down in price so that yield can match current rates and vv.
Also, i tried to look at various dynamic debt funds, and they seem to have done ok. Atleast thatās how it looks today. Still, not for me - as there is luck involved for peanuts more in returns and extra risk for those peanuts. ICICI all seasons has done well.
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