G-Sec (Government Security) — Mutual Fund Term Explained

Bonds issued by the Indian government. Zero credit risk. The underlying asset for gilt funds.

Government Securities (G-Secs) are bonds issued by the Indian central or state governments. Zero credit risk — the government cannot default on domestic currency debt.

G-Secs come in various tenures from short-term treasury bills (91-364 days) to long-term bonds (up to 40 years).

Related terms

• Gilt Fund — A debt fund investing only in Government Securities. Zero credit risk since backed by the government, but significant interest rate risk.
• Interest Rate Risk — For debt funds: when interest rates rise, fund NAV falls. Funds with longer duration are most affected.

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