Rising interest rates raise concerns over gilt fund investments in India
- Gilt funds invest mainly in government bonds, which have low default risk but can still lose value due to market changes.
- The RBI raised its repo rate to 5.5% in October 2026.
- When interest rates rise, prices of existing bonds usually fall, potentially lowering gilt fund returns.
- • Experts suggest short-term debt funds for cautious investors, while gilt funds may suit those investing for the long term.
Source: economictimes.indiatimes.com
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