Gilt Funds

This is the first passive offering in the short-duration space

Skepticism is high about "Retail Direct" because previous attempts at bringing public debt to the masses haven't gone anywhere

Some market participants say there is still room for upside for long-duration products

In the one-year period, gilt funds had outperformed most other debt categories with gains of over 10 per cent

High-duration Gilt funds gain heavily from declining interest rates

Entry and exit need to be timed, which is difficult for small investors

As interest rates are expected to rise further, they are not an attractive investment avenue currently

Gains will be limited because interest rates may not come down soon

Mutual funds (MFs) targeting government debt will probably see more pain after four straight months of outflows, according to Peerless Funds Management Co, as inflation risks dent the outlook for monetary easing.Investors pulled Rs 840 crore ($126 million) from so-called gilt plans in May, data from the Association of Mutual Funds in India (Amfi) showed. That took withdrawals in the last four months to Rs 2,850 crore, the longest stretch since June 2014. The "surprise" acceleration in consumer-price gains to a three-month high of 5.39 per cent in April made "the future trajectory of inflation somewhat more uncertain," Reserve Bank of India Governor Raghuram Rajan said Tuesday as he left benchmark interest rates unchanged.Credit Suisse Group AG, Australia & New Zealand Banking Group and Nomura Holdings Inc don't expect the central bank to cut rates in 2016, as a looming salary increase for civil servants and rising oil and food costs pose risks to its inflation target of five per ce

Investors pull out Rs 2,000 crore from these funds in 3 months through April

Short-term funds suit institutional investors who can time entry and exit, based on interest rate cycle