Should you invest in gilt funds?

It has been a testing time for many debt mutual funds due to the IL&FS, DHFL and Essel fiasco. Due to the downgrade of their commercial papers, many debt mutual funds have seen a fall in their NAVs (Net Asset Values), which has turned investor's debt portfolio red. All these things have made investors look for more safe options. So, can gilt funds be that option?
 
Let us first understand what are gilt funds and where they invest. According to the SEBI’s (Securities and Exchange Board of India’s) circular on recategorization dated October 6, 2017, gilt funds are those which has minimum 80 per cent of the total assets invested in G-Secs (Government Securities) across maturity. So basically, gilt funds are those which invests in securities and instruments that are backed by the Government of India. These have SOV (Sovereign) as a credit rating. This means that the instruments are backed by the government. This gives the utmost security of principal.
 
So, now the question is whether to invest in them or not? Before answering this question, let us look at the average 1-year, 3-year, 5-year and 10-year returns given by the gilt funds. The average returns given by the gilt funds in 1-year, 3-year, 5-year and 10-year are 7.81 per cent, 8.31 per cent, 8.92 per cent and 7.23 per cent. Now let us answer the question, whether you should consider investing in them or not. As you know more the risk more the return and less the risk, lesser is the return. So, gilt funds being one of the least risky funds, you cannot expect exponential returns. If you are a conservative risk taker then this is a boon to you and should go ahead and invest in them as even its 10-year average returns have matched with the inflation. But aggressive risk takers should refrain from investing in them other than for the purpose of diversification.