Is your gilt fund reflecting low returns? Understand how rising yields impact bond prices and gilt fund returns
In the last one year, the 10-year G-secs yields have risen from 6.20% to above 7%. Rising yields have driven bond prices lower, due to their inverse relationship. It has resulted in lower NAVs and lower returns for gilt fund investors. The 1-year returns for top gilt funds have ranged 0.50% to 3.25%. A graph of the Korean Stock Market Index displayed inside the Woori Bank trading room in Seoul, South Korea, on Thursday. (Bloomberg) If you have invested in a gilt fund, you must have noticed that the returns have been subdued in the last one year or so. It is happening because yields have been rising for the last one year or so. Rising yields lead to a fall in bond prices, thereby leading to a fall in the NAV of gilt funds and lower returns. In this article, we will understand how rising yields impact bond prices and gilt fund returns. How have the yields on G-secs performed? Last year, in May 2025, yields on the 10-year Government Securities (G-secs) bottomed out …
