Oblivious to the volatility in stock markets, gilt (government securities) funds have witnessed a steady appreciation over the past few weeks.

Gilt prices have remained firm for quite some time now and this has seen gilt fund NAVs (net asset values) inch upwards steadily.

Open-ended, Gilt Funds	NAV (Rs)	Last week	Last month	Last year	Since incep. (CAGR)
Chola Gilt (Inv)(Gr)	10.46	0.70%	2.50%	0.00%	7.20%
K Gilt Serial 2007 (Gr)	11.3	0.50%	2.00%	12.90%	12.90%
Tata Gilt Sec. B (App)	11.8	0.40%	2.30%	15.30%	15.10%
Templeton Govt Sec (Gr)	11.98	0.30%	1.80%	13.40%	13.80%
DSP ML G-Sec. Fund A(Gr)	11.44	0.30%	1.70%	12.40%	12.60%
Pru ICICI Gilt(IP)(Gr)	11.55	0.30%	1.80%	12.00%	12.10%
Tata Gilt Sec. A (Reg)	10.59	0.30%	2.10%	14.40%	13.90%
K Gilt Serial 2003 (Gr)	11.26	0.30%	1.50%	11.20%	11.70%
K Gilt Investment (Gr)	12.3	0.30%	1.60%	10.80%	11.60%
Zurich(I) Sov Gilt (PT)(Gr)	10.32	0.30%	1.30%	0.00%	4.60%
K Gilt Serial 2005 (Gr)	10.28	0.30%	1.70%	2.60%	2.70%
Zurich(I) Sov Gilt (IP)(Gr)	10.46	0.30%	1.10%	0.00%	5.90%
Birla Gilt Plus Inv. (Gr)	11.1	0.30%	1.20%	9.80%	10.20%
Birla Gilt Plus (LT) (Gr)	11.36	0.30%	1.10%	12.10%	12.40%
JM G-Sec (PFP) (Gr)	11.73	0.30%	2.10%	15.80%	15.40%
Birla Gilt Plus Liquid (Gr)	11.24	0.30%	1.00%	10.50%	11.40%
JM G-Sec (RP) (Gr)	11.59	0.30%	2.00%	14.10%	14.10%
Alliance Govt.Sec.(LT)(Gr)	1,104.68	0.30%	1.00%	10.50%	10.40%
Cangilt PGS (Gr)	10.86	0.30%	1.10%	0.00%	10.10%

(The above table only shows gilt funds that have risen by 0.3% and more in the last week)

Over the week, gilt funds have even outperformed their growth fund counterparts as the latter have been a victim of increasing volatility in the stock market. What is even more noteworthy is that gilt funds in our sample have posted a rise over the last 12 months, unlike growth funds which have mostly slumped in this period.

Open-ended, Growth Funds	NAV (Rs)	Last week	Last month	Last year	Since incep. (CAGR)
GIC Growth Plus II	13.93	1.60%	3.80%	-1.00%	6.60%
Canbonus	9.58	0.80%	7.30%	-26.40%	1.80%
K P Bluechip (Gr)	22	0.50%	8.60%	10.00%	28.00%
GIC Fortune 1994	6.33	0.50%	5.50%	-23.70%	-6.80%
GIC D'MAT	7.76	0.40%	7.60%	-26.50%	-27.90%
Zurich(I) Capital Builder	9.68	0.40%	2.20%	-18.00%	2.80%
Mastergrowth 1993	16.49	0.20%	8.50%	-13.70%	7.60%
Reliance Vision Fund	17.88	-0.10%	1.00%	-9.70%	11.70%
K MNC	9.13	-0.50%	7.70%	0.00%	-2.50%
Canexpo	17.72	-0.60%	9.10%	3.70%	11.10%
Boinanza Exclusive Gr	6.82	-0.70%	8.40%	-21.70%	-4.30%
K P Prima Plus (Gr)	21.03	-0.70%	7.30%	-6.40%	14.70%
UGS 10000	10.52	-0.70%	5.40%	-17.60%	2.70%
Mastergain 1992	10.62	-0.70%	5.10%	-18.60%	2.30%
Sun F & C Value (Div)	15.79	-0.80%	7.80%	0.00%	-36.40%
Sun F & C Value (Gr)	19.26	-0.80%	7.80%	-13.40%	25.60%
K P Prima Plus (Div)	15.55	-0.80%	7.30%	-6.40%	14.60%
JM Equity Fund (Gr)	9.98	-0.90%	6.90%	-17.40%	0.60%
Canglobal	6.99	-0.90%	4.30%	-28.90%	5.50%

(The above table only shows diversified growth funds that have risen by 0.3% and more in the last week)

Steady gilt prices is an indication of a favourable outlook on the interest rate scenario. It implies that investors do not see an interest rate hike in the offing, and this has kept bond yields at lower levels.

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