Bandhan Gilt Fund has outperformed peers in the short and mid-term gilt fund category, delivering an 8% annual return over three years. The fund also consistently beat its benchmark index over both one-year and three-year periods, highlighting its performance relative to market movements.
Bandhan Gilt Fund has recorded strong performance in the gilt—short and mid-term mutual fund category, emerging as a leader based on recent data from ACE MF as of July 6, 2026. The fund delivered a three-year compound annual growth rate (CAGR) of 8.0 percent, positioning it ahead of other prominent funds in the sector, such as ICICI Prudential Gilt Fund and HDFC Gilt Fund, which recorded returns of 7.5 percent and 6.8 percent respectively over the same period.
The comparison, which accounts for funds with a minimum asset base of Rs 1,500 crore, shows that Bandhan Gilt Fund has consistently exceeded its benchmark. Over the last three years, the fund outperformed its benchmark index by 1.0 percentage point, with the benchmark delivering a 7.1 percent return. This outperformance gap widened over the one-year timeframe, where the fund outperformed its benchmark by 5.0 percentage points, as the index returned 2.7 percent.
In addition to long-term performance, the fund has maintained momentum in shorter periods, leading the rankings for one-month, three-month, and one-year returns with gains of 3.7 percent, 6.5 percent, and 7.7 percent, respectively. While these figures indicate strong recent performance, investors should note that gilt funds—which invest primarily in government securities—are sensitive to interest rate cycles set by the Reserve Bank of India. When interest rates fall, the prices of existing government bonds typically rise, which can boost the performance of gilt funds. Conversely, if interest rates rise or remain elevated, the returns on these funds may come under pressure.
Scale is also a factor in fund management. Among the top-performing gilt schemes, the ICICI Prudential Gilt Fund maintains a larger asset size, with a corpus of Rs 8,784.9 crore. Larger assets under management can sometimes offer different operational dynamics compared to smaller funds, influencing how a manager deploys capital in the bond market. Investors evaluating these funds often look at the fund's duration strategy, which reflects how sensitive the portfolio is to changes in interest rates, as well as the credit quality of the underlying securities, which in the case of gilt funds is typically backed by the sovereign.
Going forward, the primary monitorable for investors will be the interest rate policy decisions and the yield curve movements in the Indian debt market. Because these funds are heavily influenced by macroeconomic factors and central bank policy, sustained performance will depend on the manager's ability to navigate shifts in the interest rate environment effectively.