JanelRKoller

Gilt funds are those mutual funds that invest their money into government securities or guilt securities. Government issue securities to finance their excess expenditure over the income. Most of the time you will find the government doing a lot of expenditure. When its expenditure exceeds its income, it requires funding to maintain the gap. So they issue securities to the public and these securities normally used for longer duration and carry a fixed rate of interest on its face value which is also known as coupon rate of interest.

Why do Government Securities are called Gilt Securities

Its back to the periods when the British government used to issue bonds and these bonds were in the physical form issued on papers that had gilt edges. That is why Government securities are known as gilt securities. Basically, Gilt refers to a thin gold plate or thin gold leaf or gold plate and the British government used to have on the bonds which are in physical form with some gold edges. Therefore, the popularly start recognizing as Gilt securities. As these bonds are issued by government securities, they are fully secured and tend to trustworthiness like gold and thus they are called Gilt securities and the mutual funds which invest in such securities are known as Gilt mutual funds.

Regards: Janel Koller

Specialist: Naam se vashikaran kaise kare