NIFTY 5-Year G-Sec Index

The NIFTY 5-Year G-Sec Index is a fixed income benchmark published by NSE Indices Limited that tracks the total return performance of the on-the-run 5-year benchmark Government of India (GoI) security. The 5-year G-sec represents the middle segment of the Indian sovereign yield curve, sitting between shorter-dated money market instruments and long-dated gilt bonds. The index is used as a benchmark for medium-duration gilt mutual fund schemes and as the reference for 5-year target maturity fixed maturity plan (FMP) products in India.

Publisher and base data

• Publisher: NSE Indices Limited
• Base date: 31 December 2001
• Base value: 100
• Constituent structure: On-the-run 5-year Government of India fixed rate bond (rolling benchmark).

The on-the-run 5-year G-sec

The Reserve Bank of India regularly auctions new 5-year central government bonds. The most recently issued and most liquid 5-year bond at any point in time is the on-the-run benchmark. The NIFTY 5-Year G-Sec Index tracks this on-the-run bond, rolling to the new benchmark bond as it is issued.

Compared to the NIFTY 10-Year G-Sec Index:

• The 5-year bond is less sensitive to long-end yield movements.
• The 5-year yield is more directly influenced by RBI monetary policy expectations over a 2-5 year horizon, rather than structural factors like fiscal deficit projections, global bond index inclusion, and term premium that dominate the 10-year yield.
• The 5-year G-sec is an important benchmark for corporate bond pricing, as many AAA-rated Indian corporate bonds and state development loans are priced as a spread over the 5-year G-sec.

Index methodology

• Index type: Total return (price change + coupon accrual), computed daily.
• Valuation: NDS-OM closing price from the CCIL platform.
• Modified duration: Approximately 4.0-4.8 years, reflecting the current 5-year benchmark bond’s duration characteristics.
• Roll mechanism: Index transitions to the new on-the-run 5-year bond when issued, with continuity adjustment.
• Coupon treatment: Semi-annual coupons reinvested at market price.

Interest rate sensitivity

With a modified duration of approximately 4.0-4.8 years, the NIFTY 5-Year G-Sec Index is moderately rate-sensitive:

• A 100 basis point yield change causes approximately 4.0-4.8% price change.
• This makes the 5-year index more volatile than the CRISIL Short-Term Bond Fund Index (duration ~1.5-2.5 years) but less volatile than the NIFTY 10-Year G-Sec Index (duration ~7.5-8.5 years).

Target maturity funds

The NIFTY 5-Year G-Sec Index has taken on additional significance with the growth of target maturity government bond funds (also called Bharat Bond ETF-style structures and target maturity gilt funds). These funds invest in a specific maturity bucket of G-secs and hold them to maturity. NIFTY constructs specific indices for each maturity year (NIFTY G-sec Jul 2027, Oct 2028, etc.) which are variants of the 5-year concept but for specific maturity dates. The NIFTY 5-Year G-Sec Index is the parent concept for these rolling structures.

Historical returns

Mutual fund usage

The NIFTY 5-Year G-Sec Index and related NIFTY G-sec maturity-specific indices are benchmarks for:

• Medium-term gilt funds: funds investing in government securities with approximately 5-year duration.
• Gilt funds with 10-year constant duration (split between the two maturity points).
• Target maturity gilt index funds and ETFs: products such as Edelweiss NIFTY G-Sec Jul 2027 Index Fund, Aditya Birla Sun Life CRISIL IBX Gilt April 2026 Index Fund, and similar structures.
• Banking and PSU debt funds with medium duration may use the 5-year G-sec index as a secondary benchmark.

Comparison with NIFTY 10-Year G-Sec Index

See also

• NIFTY 10-Year G-Sec Index
• CRISIL Short-Term Bond Fund Index
• CRISIL Composite Bond Fund Index
• National Stock Exchange of India
• Mutual fund

References

1. NSE Indices Limited. “NIFTY G-sec Index Series Methodology.” niftyindices.com. Accessed 2026.
2. Reserve Bank of India. “Government Securities Market in India – A Primer.” rbi.org.in. 2025.
3. CCIL. “NDS-OM trading platform and benchmark yield data.” ccilindia.co.in. 2025.
4. AMFI. “Gilt and target maturity fund benchmark data.” amfiindia.com. 2025.