With the current 10-year bond yield hovering at 8%, fund managers said that investments in fixed income products are worth making from a 6 to 12 months perspective as returns from debt products are likely to converge with what equities have to offer.
Further, a substantially higher proportion of investments into G-Sec is in schemes with maturity of more than one year. Debt experts have been recommending investors to add duration in their existing debt portfolios.
It was in December last year that fund managers had raised their exposure to G-Sec to a high of 11% on hopes of a rate cut. However, in absence of any such move from the RBI they had trimmed their investment in the government papers.
But over the last few months fund managers have changed their stance and started pumping money into G-Sec again.
November witnessed a rise of about 6% in Gilt funds investors' base to 54,487 over the previous month. The period saw gross sales of Rs 1,236 crore. As on 30 November, mutual fund sector offered 46 Gilt funds to investors.