Best 10 Year Constant Duration Gilt Funds 2026: Top 5
What Gilt with 10 Year Constant Duration mutual funds are, who should invest, key risks, and the top 5 funds with returns and risk data.
Gilt funds with 10-year constant duration invest in government securities while keeping the portfolio's average maturity near 10 years. That long duration makes them sensitive to interest rates. This guide covers who should invest, benefits, risks, and the top 5 funds in this category from our data.
Key takeaways
- These are gilt funds that keep average portfolio maturity at about 10 years at all times.
- Government backing means minimal credit risk, but the long duration means high interest rate sensitivity.
- They can gain when rates fall and face volatility when rates rise.
- They suit long-term investors with a horizon of 5 years or more.
- The top 5 funds below are ranked by an internal score, with return and risk numbers shown.
What are gilt funds with 10-year constant duration?
A gilt fund is a debt fund that invests 80% of its funds in government securities issued by central or state governments, which carry minimal credit risk because the government backs them. A gilt fund with 10-year constant duration maintains an average portfolio maturity of around 10 years at all times, with the manager buying and selling securities as they near maturity to keep the duration close to 10 years.
Since long-duration bond prices are sensitive to interest rates, these funds can benefit significantly when rates decline and may face volatility when they rise.
Who should invest in these funds?
- Investors with a long-term horizon of 5 years or more.
- Investors who want to benefit from interest rate movements and are comfortable with moderate volatility.
- Investors seeking sovereign-backed securities with negligible credit risk.
- Investors wanting to diversify with a stable, long-term debt instrument.
- Moderately conservative investors who understand how rates affect bond prices.
What should you consider before investing?
- Interest rate outlook: falling rates lead to capital appreciation while rising rates can reduce bond prices and returns.
- Interest rate sensitivity: with an average maturity near 10 years, even small rate changes can cause significant price swings.
- Investment horizon: staying invested for at least 5 years helps average out short-term volatility.
- Return expectations: returns can be stable over the long run but fluctuate in the short run.
Advantages of these funds
- Minimal credit risk, since they invest only in government securities.
- Potential for higher returns when rates fall, because longer-duration bond prices rise.
- Portfolio diversification by balancing equity volatility with government-backed debt.
- Professional management to maintain the 10-year duration.
Risks of these funds
- Interest rate risk: rising rates can reduce bond prices and affect short-term performance.
- Volatility: they can be more volatile than other debt funds because of the longer duration.
- Liquidity risk: government securities are highly liquid, but market conditions can sometimes affect liquidity and redemption timelines.
How are Gilt with 10 Year Constant Duration mutual funds taxed?
Gains from Gilt with 10 Year Constant Duration funds are subject to tax on gains, with the rules depending on the type of debt fund and the date of purchase. The rates and holding-period rules depend on the fund type and can change, so check the current rules or speak to a tax advisor before you invest.
Top 5 Gilt with 10 Year Constant Duration mutual funds ranked by an internal score
These are the top 5 Gilt with 10 Year Constant Duration funds from our data, ranked by Invo Wealth's internal fund-quality score. The score itself is not shown, only the return and risk numbers behind it. A "--" means the fund has not completed that period or the data is unavailable.
Returns across 6 months to 5 years
Performance data as of 5 September 2026.
| Fund | 6M CAGR | 1Y CAGR | 3Y CAGR | 5Y CAGR |
|---|---|---|---|---|
| ICICI Prudential 10 year Constant Maturity Gilt Fund | 3.82% | 4.46% | 7.35% | 5.77% |
| UTI 10 year Constant Maturity Gilt Fund | 2.71% | 3.44% | 6.65% | -- |
| Bandhan 10 year Constant Maturity Gilt Fund | 4.45% | 4.92% | 7.62% | 5.68% |
| SBI 10 YEAR CONSTANT MATURITY GILT FUND | 2.91% | 3.64% | 6.81% | 5.51% |
| DSP 10 year Constant Maturity Gilt Fund | 1.59% | 2.22% | 6.27% | 4.81% |
Risk and consistency metrics
| Fund | ISIN | Volatility | Max drawdown (3Y) | Sortino ratio |
|---|---|---|---|---|
| ICICI Prudential 10 year Constant Maturity Gilt Fund | INF109KA1N46 | 3.30% | -2.73% | 0.15 |
| UTI 10 year Constant Maturity Gilt Fund | INF789F1AVI6 | 3.36% | -2.77% | -0.15 |
| Bandhan 10 year Constant Maturity Gilt Fund | INF194K01FA0 | 3.41% | -2.95% | 0.27 |
| SBI 10 YEAR CONSTANT MATURITY GILT FUND | INF200K01AN9 | 3.34% | -2.71% | -0.08 |
| DSP 10 year Constant Maturity Gilt Fund | INF740K012I0 | 3.44% | -2.75% | -0.31 |
Because duration is fixed near 10 years, expect noticeable volatility. Compare the drawdown and volatility columns before looking at returns.
How to invest in Gilt with 10 Year Constant Duration mutual funds
You can invest in these funds using the Invo Wealth app. Sign up, get complete portfolio insights and start investing in mutual funds that actually suit you.
Conclusion
These funds give long-duration government bond exposure with little credit risk but significant rate sensitivity. They suit patient investors with a view on interest rates.
Frequently asked questions
What is a gilt fund with 10-year constant duration?
It is a type of gilt fund that invests mainly in government securities and keeps the portfolio's average maturity at around 10 years by buying and selling securities as they near maturity.
Who should invest in these funds?
Investors with a long horizon of 5 years or more who are comfortable with moderate volatility, want sovereign-backed securities with negligible credit risk, and understand how interest rates affect bond prices.
When do these funds perform best?
When interest rates fall, because longer-duration bond prices rise. Rising rates can reduce bond prices and returns.
What are the main risks?
Interest rate risk and high duration risk, short-term volatility, and some liquidity risk in unusual market conditions.
How can I invest in gilt with 10 year constant duration mutual funds?
You can invest through a SIP or a lump sum. To invest in these funds, you can use the Invo Wealth app: sign up, get portfolio insights and start investing.
Mutual fund investments are subject to market risks; read all scheme-related documents carefully. This article is for education only and is not investment advice. Past performance does not guarantee future returns. Invo Wealth is an AMFI-registered mutual fund distributor (ARN-368528).