Gilt funds invest primarily in Government securities (G-secs) issued by the RBI on behalf of the Government. Since it invests in bonds that are of highest credit quality, capital protection is more or less guaranteed.

They are equity-oriented funds that capitalise on price differences that exist between the cash and derivative market for a share. As the name suggest, the fund manager resorts to arbitrage strategies to make money.

Focused equity funds follow a similar investment philosophy by maintaining a tight portfolio of not more than 30 stocks. Their aim is to hit the bull’s eye with the right stocks (bought with high level of conviction) and earn a higher return.