Deutsche Asset Management India has launched a new fixed income fund that will invest in government securities.

DWS Gilt Fund, an actively managed portfolio of government securities, joins India's 31 such funds with about R20 billion ($420 million) under management at the end of August, according to data from the Association of Mutual Funds in India reported by Reuters.

"With investors turning extremely risk-averse, we believe that this is an opportune time to invest in gilts. The possible return of a softer interest rates regime and single-digit inflation scenario can lead to a positive momentum in gilts," said Suresh Soni, chief executive officer of Deutsche Asset Management ( India) since July 2008 and also chief investment officer.

Between 2001 and 2003, such securities yielded an annualised return of 19.8 per cent as a result of softening interest rates and relatively lower inflation, the firm said.