Gilt fund is a mutual fund that invests in several different types of medium and long-term government securities in addition to top quality corporate debt. Gilts originated in Britain.
Gilt funds differ from bond funds because bond funds invest in corporate bonds, government securities, and money market instruments. Gilt funds stick to high quality-low risk debt, mainly government securities.
Gilt funds originate from the requirement of investors to ensure higher safety levels for their invested money. Thus this scheme invests in instruments, which are generally considered to be safer than AAA grade investments.
This scheme is ideal for investors who want higher safety levels for their investments and at the same time can obtain reasonable returns on their investments.