This gilt fund turns Rs 10,000 monthly SIP into almost Rs 1 crore in 25 years

ICICI Prudential Gilt Fund, the second-largest in the category, has completed 25 years of operations in the market. It is an open-ended debt scheme investing in government securities across maturity with a relatively high interest rate risk, and relatively low credit risk.

Launched in August 1999, the scheme has offered around 9.45% CAGR since its inception. In the last 20 years, the scheme has offered 8.26% CAGR, and 8.62% and 7.11% CAGR in 10 years and five years, respectively.



A lump sum investment of Rs 1 lakh made in this fund since its inception would have been Rs 9.58 lakh now with a CAGR of 9.45%. In the last 20 years, an investment of Rs 1 lakh would have been Rs 4.87 lakh with a CAGR of 8.23%. In the last five years, the value of investment would have been Rs 1.41 lakh with a CAGR of 7.14%.

A monthly SIP of Rs 10,000 in the scheme since its inception would have been Rs 99 lakh in 25 years with an XIRR of 8.52%.

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In the last 10 years, based on yearly returns, the scheme has never offered negative returns. It gave the highest annualised return of around 18.17% in 2016, and the lowest of around 2.06% in 2017.

According to a note from the fund house, it crossed an AUM size of Rs 1,000 crore on August 31, 2014. In May 2018, when Sebi recategorised mutual funds, three Gilt-oriented schemes were merged into ICICI Prudential Gilt Fund.

The fund house had an AUM of Rs 6,361 crore as of July 2024, an average maturity of 8.29 years, and a modified duration of 4.56 years.

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The scheme is benchmarked against Nifty All Duration G-Sec Index and is managed by Manish Banthia and Raunak Surana.

The fund house mentioned that the fund managers took the decision to invest more in floating rate Gsecs from late 2021, anticipating a rise in interest rates by the RBI. The decision paid off as the RBI hiked rates by 250 bps from May 2022 to Feb 2023.

The fund is suitable for investors seeking long-term wealth creation and wants a gilt scheme that aims to generate income through investments in Gilt of various maturities.