Blog

What Drugs Make You Lose Weight And How They Work

The global conversation around weight loss has shifted rapidly over the past few years. Once dominated by gym regimens and diet trends, it now includes an increasing focus on medical intervention. One question that echoes across clinics, online searches, and dinner table discussions alike is: “What drugs make you lose weight?” With the rise of medically approved weight loss pills and prescription medications, individuals are now seeking professional solutions to manage their weight effectively and sustainably.

Today, weight loss medications have entered mainstream health culture. From Ozempic and Wegovy to over-the-counter (OTC) solutions like Alli, there are now more choices than ever. However, not all pills are created equal. Their composition, mechanism, safety profile, and effectiveness vary significantly. Understanding these factors is crucial for making informed decisions.

This article explores the world of weight loss pills in depth. We decode their science, list FDA-approved options, explain their side effects, highlight who they are suitable for, and clarify whether they are enough on their own or need to be paired with lifestyle changes. If you have ever wondered which pill might be right for you or if they actually work, this comprehensive guide will help you make sense of it all.

What are Weight Loss Pills?

Weight loss pills are medications (either prescription-based or available over the counter) designed to help individuals reduce body weight. They do not work by simply melting fat away; instead, they help manage hunger, cravings, fat absorption, or metabolism through various mechanisms.

These pills are typically recommended for individuals with:

A BMI over 30 (classified as obese), or
A BMI over 27 with at least one weight-related health condition such as diabetes, hypertension, or PCOS

Various Categories of Weight Loss Pills

These medications are available both as prescription drugs and over-the-counter supplements, but their mechanisms and efficacy vary widely. Here are the major classes:

1. Appetite Suppressants (Anorectics)

These drugs act on the central nervous system, particularly the hypothalamus, to reduce the sensation of hunger. Most appetite suppressants mimic neurotransmitters such as norepinephrine, dopamine, or serotonin to give a sense of fullness. Medications like phentermine and phentermine-topiramate fall into this category and are often considered the best weight loss pills for those who tend to overeat due to constant hunger cues.

2. Lipase Inhibitors

Lipase inhibitors like Orlistat (sold as Alli over-the-counter and Xenical via prescription) work by blocking the enzymes responsible for digesting fats. When fat is not absorbed, it passes through the body undigested, reducing overall calorie intake. This class is often considered one of the top-rated weight loss pills because of its FDA approval and long-term safety data.

3. GLP-1 Receptor Agonists

Initially developed for diabetes, drugs like semaglutide (Wegovy, Ozempic) and liraglutide (Saxenda) are among the best weight loss medications today. They mimic the GLP-1 hormone, which reduces appetite, slows gastric emptying, and promotes insulin secretion. These are generally available as weight loss injections.

4. Dual-Action Medications

These include combination medications like bupropion-naltrexone (Contrave) and phentermine-topiramate (Qsymia). They work by modulating brain signals related to hunger, cravings, and reward-based eating. These drugs that make you lose weight fast are preferred when emotional or addictive eating is a concern.

5. GIP and GLP-1 Dual Agonists

Tirzepatide (Zepbound, Mounjaro) represents a newer category that combines GLP-1 and glucose-dependent insulinotropic polypeptide (GIP) action. This dual mechanism boosts insulin while significantly reducing hunger. That makes it one of the strongest weight loss prescription pills currently available.

Composition and Function of Weight Loss Medications

Each category of weight loss pills uses different active ingredients to achieve its goal. Some commonly used compounds include:

Phentermine: A stimulant that suppresses appetite by affecting the central nervous system.
Topiramate: Originally developed as an anticonvulsant, it helps control satiety and cravings.
Orlistat: A lipase inhibitor that prevents fat digestion.
Semaglutide and Liraglutide: GLP-1 receptor agonists that mimic gut hormones to reduce appetite and improve insulin function.
Naltrexone-Bupropion: Influences brain signals related to hunger, reward, and mood.

Each of these medications has a different safety profile and mechanism, and they are often used in conjunction with diet, exercise, and behavioral therapy.

How Do Weight Loss Pills Work?

Let us understand the mechanism of action behind various categories of weight loss medications:

1. Appetite Suppressants

These medications act on the hypothalamus in the brain to curb hunger signals. Drugs like phentermine stimulate norepinephrine release, reducing the psychological urge to eat. Over time, this helps individuals reduce their overall calorie intake.

2. GLP-1 Receptor Agonists

Drugs like semaglutide (Ozempic, Wegovy) and liraglutide (Saxenda) mimic the GLP-1 hormone naturally produced in the gut. They promote insulin secretion, slow gastric emptying, and send satiety signals to the brain, leading to fewer cravings and earlier feelings of fullness.

3. Fat Blockers

Orlistat works by blocking the enzyme lipase in your gut, preventing the breakdown and absorption of fats. As a result, undigested fat is excreted through bowel movements. While effective, it can cause digestive side effects.

4. Neurohormonal Combinations

Drugs like Contrave combine bupropion (an antidepressant) and naltrexone (used for addiction treatment) to regulate the reward system in the brain. This can be especially useful for those who struggle with emotional or compulsive eating.

5. Satiety Enhancers

Some pills work by creating bulk in the stomach or releasing compounds that enhance fullness. For example, hydrogel capsules (like Plenity) expand in the stomach and mimic the effects of a large meal.

Popular Weight Loss Medications (Prescription-Based)

Prescription weight loss pills and injections are typically prescribed to individuals with a BMI of 30 or higher, or 27 and above with associated conditions. Each medication varies in composition, mechanism, and effectiveness. Here are the top-rated weight loss pills and drugs that actually work:

1. Semaglutide (Wegovy, Ozempic)

Semaglutide is a GLP-1 receptor agonist that lowers appetite, slows digestion, and enhances insulin response. Initially approved as a diabetes drug, its higher-dose version, Wegovy, is now FDA-approved for weight loss. It has shown a weight reduction of up to 15% over a year, positioning it as the best weight loss medication for long-term use.

2. Tirzepatide (Zepbound/Mounjaro)

Tirzepatide works on both GLP-1 and GIP receptors, offering superior weight loss results. Often described as the strongest weight loss prescription pill currently available, trials report over 20% body weight reduction when combined with lifestyle changes. It is beneficial for people with metabolic syndrome or type 2 diabetes.

3. Phentermine-Topiramate (Qsymia)

This dual-drug pill combines a stimulant (phentermine) with an anticonvulsant (topiramate) to suppress appetite and promote fullness. It is ideal for patients looking for diet pills that work quickly and are suitable for long-term use. Compared to many weight loss pills for men, Qsymia has higher efficacy and FDA backing.

4. Liraglutide (Saxenda)

Saxenda is a daily injection that mimics gut hormones to promote satiety. It is often considered a strong option for women looking for consistent, slow weight loss. While not a pill, it is a key competitor in the weight loss medication market and is included in many top-rated lists.

5. Orlistat (Xenical/Alli)

Orlistat blocks fat absorption and is available in prescription (Xenical) and OTC (Alli) forms. Though not as fast-acting as others, it is among the best over-the-counter diet pills due to its availability and safety for long-term use. However, side effects like oily stools can be a concern.

6. Bupropion-Naltrexone (Contrave)

This medication targets the brain’s reward system to curb emotional eating. It is particularly effective for those with food addiction or compulsive eating habits. Some reviews call it the best weight loss pill for women struggling with emotional eating.

7. Phentermine

This stimulant-based pill is approved for short-term use and is among the most popular diet pills in the US. It helps reduce hunger significantly and is often considered by people looking for weight loss pills to lose weight fast. It is available via prescription and is not meant for long-term use.

8. Setmelanotide (Imcivree)

Setmelanotide is a genetic-specific weight loss injection for rare obesity disorders. Though not for general obesity, it represents how weight loss medications are evolving to become more personalized.

Please note: Currently, Mounjaro is the most effective weight loss and GLP-1 drug available in India.

Over-the-Counter (OTC) Weight Loss Pills

While prescription medications require a doctor’s supervision, OTC pills like Alli (orlistat 60 mg) are more accessible. However, they often come with:

Lower efficacy
Unregulated alternatives
Increased risk of side effects due to poor quality control in non-FDA-approved supplements.

Many herbal or supplement-based diet pills claim to help with weight loss, but their effects are rarely backed by rigorous scientific evidence. Always consult a healthcare provider before trying any OTC product.

Are Weight Loss Pills Enough on Their Own?

No. While weight loss pills that actually work can enhance metabolic function and reduce appetite, they are not standalone solutions. Sustainable weight loss requires a combination of factors: medical intervention, dietary adjustments, physical activity, and behavioral changes.

Medications help by regulating hunger hormones, improving insulin sensitivity, or reducing fat absorption. However, without a supportive lifestyle, users often regain the weight once the medication is stopped. For instance, semaglutide or tirzepatide users may experience weight regain within months of discontinuation unless they continue with diet and activity plans.

Moreover, some weight loss pills lose effectiveness over time if not paired with other strategies. That is why most healthcare providers advise using medication as an adjunct to comprehensive lifestyle programs, not as a replacement. When discussing how to get prescribed weight loss pills, doctors also evaluate whether patients are committed to lifestyle changes.

Hence, the real impact of these drugs that make you lose weight lies in complementing, not replacing, your overall approach to health.

Side Effects and Safety Concerns

Each medication comes with a unique set of potential side effects. Common issues include:

Gastrointestinal distress (nausea, diarrhea, constipation)
Headaches
Fatigue
Increased heart rate (with stimulants like phentermine)

More serious concerns may include:

Gallbladder disease
Thyroid tumor risk (GLP-1 medications)
Pancreatitis
Suicidal thoughts (especially with Contrave)

That is why medical supervision is not optional. Long-term use requires regular monitoring and dose adjustment.

Who Should Consider Prescription Pills?

People with the following profile may qualify:

Adults with a BMI > 30
Adults with a BMI > 27 with comorbidities
Those who have not succeeded with lifestyle changes alone
Individuals facing emotional, compulsive, or stress-related eating patterns

However, these drugs are not for:

Pregnant or breastfeeding individuals
Those with certain cardiovascular conditions
People with a history of pancreatitis or thyroid cancer (for GLP-1s)

Best Weight Loss Pills: A Comparative Overview

Here is a quick comparative overview of top-rated weight loss pills, based on clinical data, mechanism, and use cases:

Medication	Form	Mechanism	Average Weight Loss	Best For
Wegovy (Semaglutide)	Injection	GLP-1 receptor agonist	12–15%	Long-term weight loss, metabolic issues
Zepbound (Tirzepatide)	Injection	GLP-1 + GIP dual agonist	15–20%	Highest efficacy, diabetes, and obesity
Qsymia	Pill	Appetite suppressant + anticonvulsant	8–12%	Fast appetite control, women over 35
Contrave	Pill	Appetite suppression via brain signals	7–10%	Emotional eaters, smokers
Saxenda (Liraglutide)	Injection	GLP-1 receptor agonist	6–10%	Consistent weight loss, mild metabolic issues
Orlistat (Alli/Xenical)	Pill	Fat absorption inhibitor	5–7%	OTC users, digestive-based weight strategies
Phentermine	Pill	CNS stimulant	5–10% (short-term)	Men looking for a short-term weight loss boost

GLP-1 + Healthify Coach: Why Personalized Support Matters

GLP-1 medications like Ozempic or Wegovy show great promise. But they do not address mindset, habits, or emotional factors. The HealthifyMe GLP-1 + Coach plan pairs these medications with:

Customized meal plans
Fitness routines
1:1 expert consultations
Tracking tools and guidance

This ensures not just weight loss, but sustained, safe transformation that fits your life.

HealthifyMe Note

There is no “magic pill” for weight loss, but there is a smarter path, and that includes the right guidance. At HealthifyMe, we see medications as tools, not solutions. What makes the biggest difference is understanding your body, eating for nourishment, moving with intention, and addressing the mental patterns that often go unspoken. With the proper support, even the most challenging weight journeys become manageable. So if you are considering weight loss pills, remember that your success will depend not just on the medicine, but on the mindset and the method. Let us help you unlock both.

The Final Word

Weight loss pills have become more sophisticated and effective over the years. From GLP-1-based drugs to appetite suppressants and fat blockers, there is now a range of FDA-approved options to support weight loss for those who qualify.

However, no pill can replace lifestyle. Sustainable change still hinges on consistency in food, movement, and habits. Medications may assist the journey, but they should not define it.

If you are considering GLP-1s or any other prescription pill, the GLP-1 + Healthify Coach plan offers a comprehensive ecosystem of medical, nutritional, and behavioral support. It is not just about shedding pounds. It is about building a healthier, longer-lasting life—your way.

Frequently Asked Questions (FAQs)

Q: What is the strongest weight loss prescription pill currently available?

A: Tirzepatide (Zepbound) is currently considered the strongest prescription medication for weight loss. In clinical trials, it showed an average weight loss of over 20%. It combines GLP-1 and GIP hormone activity for powerful appetite suppression and blood sugar control.

Q: What are the best weight loss pills for women?

A: Top options for women include semaglutide (Wegovy), phentermine-topiramate (Qsymia), and Contrave. Each targets appetite, satiety, and emotional eating differently, making them ideal based on individual needs. These weight loss pills work best when combined with lifestyle changes.

Q: How do weight loss drugs work in the body?

A: Weight loss medications work through various mechanisms, such as by suppressing appetite, altering hunger hormones, blocking fat absorption, or enhancing insulin response. The goal is to help reduce calorie intake and improve metabolic balance over time.

Q: Are there diet pills like phentermine over the counter?

A: No over-the-counter (OTC) drug matches phentermine’s effectiveness or stimulant action. Alli (Orlistat) is the only FDA-approved OTC weight loss pill. Supplements may claim similar benefits, but they are not clinically tested like phentermine.

Q: How can I get a prescription for weight loss pills?

A: You must consult a healthcare provider who evaluates your BMI, medical history, and previous weight loss attempts. If you meet the criteria (BMI over 30 or 27 with comorbidities), they may prescribe FDA-approved weight loss medications tailored to your needs.

Q: What is the best diet pill to lose weight fast?

A: Phentermine offers rapid, short-term results. For longer-term outcomes, Wegovy or Zepbound are more effective but work gradually. The best pill depends on your health condition, goals, and whether you can sustain lifestyle changes alongside medication.

Q: What are the top-rated weight loss pills for men?

A: Phentermine and Qsymia are frequently prescribed for men due to their fast-acting nature. Men with metabolic syndrome may also benefit from semaglutide or tirzepatide for more comprehensive health improvement.

Q: Do I qualify for weight loss medication?

A: You may qualify if your BMI is over 30, or over 27 with health risks such as diabetes, high blood pressure, or sleep apnea. Your doctor will also check for contraindications, current medications, and readiness to engage in a sustainable weight loss plan.

Research Sources

1. Online searches for SGLT-2 inhibitors and GLP-1 receptor agonists correlate with prescription rates in the United States: An infodemiological study

2. FDA Approves New Drug Treatment for Chronic Weight Management, First Since 2014

3. Gelesis’ Oral Treatment for Weight Management Showed Real-World Effectiveness in New Data Presented at the American Diabetes Association’s Annual Conference

4. Anti-obesity weight loss medications: Short-term and long-term use

5. Weight Loss Outcomes Associated With Semaglutide Treatment for Patients With Overweight or Obesity

6. Once-Weekly Semaglutide in Adults with Overweight or Obesity

7. Novo Nordisk, Pfizer weight-loss pills work as well as shots

8. AGA Releases Guidelines on Anti-Obesity Medications for Weight Management

9. Prescription Medications to Treat Overweight & Obesity

10. Anti-obesity weight loss medications: Short-term and long-term use

11. What Could New Anti-Obesity Drugs Mean for Medicare?

12. Prescription medications to treat overweight and obesity. National Institute of Diabetes and Digestive and Kidney Diseases

13. Obesity medications: A narrative review of current and emerging agents

June 15, 2025

Israeli Airstrikes Damage Iran’s Nuclear Sites, Experts Assess Impact

Israel’s airstrikes have caused considerable damage to Iran’s nuclear program. The full impact of these strikes is still being evaluated by experts. This situation poses a significant challenge for both the US and Israel as they deliberate on their next course of action.

What Happened: According to a report on Saturday, the airstrikes launched by Israel have resulted in significant damage to Iran’s nuclear facilities. However, experts are of the opinion that these strikes have not entirely wiped out the program.

Rafael Mariano Grossi, the Director General of the International Atomic Energy Agency, revealed that while the surface facilities at Natanz, Iran’s primary nuclear-fuel site, were destroyed, the main underground halls where uranium enrichment occurs are still operational, reports Bloomberg.

In retaliation to the attacks, Iran targeted Israeli cities with hundreds of ballistic missiles and drones. The strikes also resulted in the death of nine top scientists who were instrumental to Iran’s nuclear aspirations.

These developments have cast a shadow over the future of US-Iran talks that aim to limit Tehran’s nuclear activities in return for relief from sanctions.

Also Read: Intel Clues Hidden in Pizza Orders? Pentagon Orders Surged Just Before Israel Hit Iran

Experts have expressed concerns that the airstrikes could complicate the monitoring of Iran’s nuclear activities, as inspectors backed by the UN may not be able to access the sites for an extended period.

Fears are also mounting that Iran might move uranium to a hidden location or that the IAEA may not be able to account for all of Iran’s nuclear materials due to the damage inflicted.

The current situation puts the US in a tight spot, as the only feasible way to destroy the enrichment site at Fordow, which is located beneath a mountain, would be through the use of massive bunker-buster bombs, a weapon that only the US possesses.

Why It Matters: The recent airstrikes and their aftermath have heightened tensions in the Middle East, with potential global implications. The future of US-Iran talks hangs in the balance, and the potential for further escalation remains high.

The situation calls for careful diplomacy and strategic decision-making from all involved parties.

Read Next

Iran Fires Ballistic Missiles At Israel, Tel Aviv Struck

June 14, 2025
Butter: This Vilified Daily Food Slashes Heart Attack Risk in Half…
By The Weston A. Price Foundation

The Weston A. Price Foundation provides accurate information about nutrition and is dedicated to putting nutrient-dense foods back on American tables.

Members receive a lively and informative quarterly journal and email updates on current issues and events.Visit their website at www.westonaprice.org .

Are you still shunning butter from your diet? You can stop today because butter can be a very healthy part of your diet.

Why Butter is Better
- Vitamins …
  Butter is a rich source of easily absorbed vitamin A, needed for a wide range of functions, from maintaining good vision to keeping the endocrine system in top shape.
  
  Butter also contains all the other fat-soluble vitamins (D, E and K2), which are often lacking in the modern industrial diet.
- Minerals …
  Butter is rich in important trace minerals, including manganese, chromium, zinc, copper and selenium (a powerful antioxidant). Butter provides more selenium per gram than wheat germ or herring. Butter is also an excellent source of iodine.
- Fatty Acids …
  Butter provides appreciable amounts of short- and medium-chain fatty acids, which support immune function, boost metabolism and have anti-microbial properties; that is, they fight against pathogenic microorganisms in the intestinal tract.
  
  Butter also provides the perfect balance of omega-3 and omega-6 fats. Arachidonic acid in butter is important for brain function, skin health and prostaglandin balance.
- Conjugated Linoleic Acid (CLA) …
  When butter comes from cows eating green grass, it contains high levels of conjugated linoleic acid (CLA), a compound that gives excellent protection against cancer and also helps your body build muscle rather than store fat.
- Glycospingolipids …
  These are a special category of fatty acids that protect against gastrointestinal infections, especially in the very young and the elderly. Children given reduced-fat milks have higher rates of diarrhea than those who drink whole milk.
- Cholesterol …
  Despite all of the misinformation you may have heard, cholesterol is needed to maintain intestinal health and for brain and nervous system development in the young.
- Wulzen Factor …
  A hormone-like substance that prevents arthritis and joint stiffness, ensuring that calcium in your body is put into your bones rather than your joints and other tissues. The Wulzen factor is present only in raw butter and cream; it is destroyed by pasteurization.
Butter and Your Health
Is butter really healthy? Let us count the ways …
1. Heart Disease
  Butter contains many nutrients that protect against heart disease including vitamins A, D, K2, and E, lecithin, iodine and selenium. A Medical Research Council survey showed that men eating butter ran half the risk of developing heart disease as those using margarine (Nutrition Week 3/22/91, 21:12).
2. Cancer
  The short- and medium-chain fatty acids in butter have strong anti-tumor effects. Conjugated linoleic acid (CLA) in butter from grass-fed cows also gives excellent protection against cancer.
3. Arthritis
  The Wulzen or “anti-stiffness” factor in raw butter and also Vitamin K2 in grasss-fed butter, protect against calcification of the joints as well as hardening of the arteries, cataracts and calcification of the pineal gland. Calves fed pasteurized milk or skim milk develop joint stiffness and do not thrive.
4. Osteoporosis
  Vitamins A, D and K2 in butter are essential for the proper absorption of calcium and phosphorus and hence necessary for strong bones and teeth.
5. Thyroid Health
  Butter is a good source of iodine, in a highly absorbable form. Butter consumption prevents goiter in mountainous areas where seafood is not available. In addition, vitamin A in butter is essential for proper functioning of the thyroid gland.
6. Digestion
  Glycospingolipids in butterfat protect against gastrointestinal infection, especially in the very young and the elderly.
7. Growth & Development
  Many factors in the butter ensure optimal growth of children, especially iodine and vitamins A, D and K2. Low-fat diets have been linked to failure to thrive in children — yet low-fat diets are often recommended for youngsters!
8. Asthma
  Saturated fats in butter are critical to lung function and protect against asthma.
9. Overweight
  CLA and short- and medium-chain fatty acids in butter help control weight gain.
10. Fertility
  Many nutrients contained in butter are needed for fertility and normal reproduction.
Why You Should Avoid Margarine, Shortening and Spreads
There are a myriad of unhealthy components to margarine and other butter imposters, including:
- Trans fats: These unnatural fats in margarine, shortenings and spreads are formed during the process of hydrogenation, which turns liquid vegetable oils into a solid fat
  Trans fats contribute to heart disease, cancer, bone problems, hormonal imbalance and skin disease; infertility, difficulties in pregnancy and problems with lactation; and low birth weight, growth problems and learning disabilities in children.
  
  A U.S. government panel of scientists determined that man-made trans fats are unsafe at any level. (Small amounts of natural trans fats occur in butter and other animal fats, but these are not harmful.)
- Free radicals: Free radicals and other toxic breakdown products are the result of high temperature industrial processing of vegetable oils. They contribute to numerous health problems, including cancer and heart disease.
- Synthetic vitamins: Synthetic vitamin A and other vitamins are added to margarine and spreads. These often have an opposite (and detrimental) effect compared to the natural vitamins in butter.
- Emulsifiers and preservatives: Numerous additives of questionable safety are added to margarines and spreads. Most vegetable shortening is stabilized with preservatives like BHT.
- Hexane and other solvents: Used in the extraction process, these industrial chemicals can have toxic effects.
- Bleach: The natural color of partially hydrogenated vegetable oil is grey so manufacturers bleach it to make it white. Yellow coloring is then added to margarine and spreads.
- Artificial flavors: These help mask the terrible taste and odor of partially hydrogenated oils, and provide a fake butter taste.
- Mono- and di-glycerides: These contain trans fats that manufacturers do not have to list on the label. They are used in high amounts in so-called “low-trans” spreads.
- Soy protein isolate: This highly processed powder is added to “low-trans” spreads to give them body. It can contribute to thyroid dysfunction, digestive disorders and many other health problems.
- Sterols: Often added to spreads to give them cholesterol-lowering qualities, these estrogen compounds can cause endocrine problems; in animals these sterols contribute to sexual inversion.
How to Purchase Butter

The BEST butter is raw butter from grass-fed cows, preferably organic. Next is pasteurized butter from grass-fed cows, followed by regular pasteurized butter from supermarkets. Even the latter two are still a much healthier choice than margarine or spreads.

For sources of raw butter, visit www.realmilk.com.
June 14, 2025
F1 news: George Russell jabs Max Verstappen’s penalty status after qualifying at Canadian GP

Last year nothing separated George Russell and Max Verstappen in qualifying for the Canadian Grand Prix, as the two drivers posted identical times in Q3 at the front of the field. Only the rules, which state that the driver who posts the time first, put Russell into pole position ahead of Verstappen.

Not much separated the two drivers a year later, as again the pair will start up front with Russell in P1, as his time in Q3 was just 0.060 seconds faster than his Red Bull driver. However, the Mercedes driver admitted after the session that he might have an advantage as the duo, who have clashed in recent weeks, head into Turn 1 on Sunday.

That advantage? Verstappen’s penalty situation.

Verstappen entered this race week with 11 penalty points on his FIA Super License, putting him one shy of a one-race ban. Drivers who receive 12 penalty points in a calendar year are suspended for a race, and with Verstappen’s two oldest penalty points not coming off his FIA Super License until the end of the month, the Red Bull driver must navigate both the Candian Grand Prix and the Austrian Grand Prix without incident to avoid a ban.

Asked about the start of the race after qualifying, Russell joked that Verstappen’s penalty situation could give him an advantage.

“I’ve got a few more points on my licence to play with, so let’s see,” said Russell after qualifying, to the roar of the crowd.

The Mercedes driver described his pole position, and the final lap, as “exhilarating.”

“That last lap was probably one of the most exhilarating laps of my life,” said Russell. “On my steering wheel, you’ve got the delta, and I just saw every corner, I was going one-tenth quicker, one-tenth quicker.

“I got into the last corner, and I was six tenths up, I was like, ‘alright, this lap’s mighty.’ Crossing the line and seeing we were P1 was a real surprise, but I was so chuffed with it.”

This was the sixth pole position of Russell’s career and the first of the season for the Mercedes driver. He currently sits fourth in the Formula 1 Drivers’ Championship standings … 26 points behind Verstappen.

June 14, 2025
Travelers defeats $1.4 million delay claim in builder’s risk coverage clash

On June 9, 2025, the Eighth Circuit Court of Appeals sided with Travelers Property Casualty Company of America in a closely watched dispute over coverage for construction delays at a Missouri apartment complex, ruling that developer BCC Partners, LLC wasn’t entitled to a $1.4 million payout for lost rental income and soft costs.

The decision brings an end to BCC’s legal challenge, which centered on its status under a builder’s risk insurance policy tied to the Vue Project in Creve Coeur. Back in 2015, BCC hired Ben F. Blanton Construction, Inc. to build the apartment complex. As part of their contract, Blanton secured insurance from Travelers. While Blanton was listed as the “Named Insured,” BCC was designated as an “Additional Named Insured.”

Things took a turn in December of that year when a retaining wall collapsed mid-construction. The fallout caused significant delays and triggered multiple claims. Travelers initially paid $1.3 million into escrow. BCC later recovered over $7.2 million in arbitration against Blanton, who went bankrupt soon after. Blanton also successfully sued Travelers for over $330,000 in costs related to the wall repairs.

In 2016, BCC submitted a separate claim to Travelers, this time for losses related to rental income and soft costs stemming from the delays. Travelers advanced $200,000 while it reviewed the claim. But after back-and-forth over the next few years, the insurer ultimately denied coverage in 2019 and reserved the right to recover the advance. In 2022, BCC demanded the full $1.4 million coverage limit. Travelers again refused and reiterated its position.

That led BCC to sue for breach of contract and vexatious refusal to pay under Missouri law. But both the trial court and now the appeals court found that BCC simply wasn’t entitled to the coverage it was seeking.

At the heart of the ruling is the language in the insurance policy. The court pointed to provisions stating that coverage for rental income and soft costs applies to losses “you sustain” and “your soft costs,” with “you” and “your” defined specifically as the “Named Insured”—in this case, Blanton. BCC’s role as an “Additional Named Insured” came with narrower rights. The policy clearly stated that such parties were only covered to the extent of their financial interest in the physical construction work—defined as “Permanent Works” and “Temporary Works.”

In short, the court said, BCC wasn’t covered for financial losses like rent or soft costs related to delays, because that protection was only extended to the party named in the policy declarations. The court also dismissed BCC’s arguments that Travelers’ earlier advance and years of communication created an expectation of coverage, noting that the insurer had consistently reserved its rights.

BCC also tried to rely on an industry source, the International Risk Management Institute, which offers a broader interpretation of “Additional Named Insured.” But even that reference acknowledged the term lacks a standard definition across the industry, and the court stuck to the plain wording of the policy at hand.

For insurers and risk managers, the ruling is a reminder of how courts enforce policy distinctions between different types of insureds—especially in complex construction projects where multiple parties share coverage. It also underscores the value of reading endorsements and declarations closely, as assumptions about what’s covered can fall apart under scrutiny.

With the decision now final, BCC is left without recourse under the policy for its delay-related losses. The ruling offers insurers a clear affirmation that policy definitions—when clearly drafted—can hold up even under the weight of costly disputes.

June 14, 2025

Meaning, Benefits & How It Works

A financial lease is a cost-effective way for businesses to access essential assets—such as equipment, vehicles, or machinery—without the burden of immediate ownership. It allows companies to preserve cash flow while acquiring long-term control over operational assets. In this arrangement, the lessee pays fixed rentals over the lease term, with an option to purchase the asset at a nominal price once the term ends.

This approach is increasingly favored over traditional loans for its flexibility and lower capital strain. In this comprehensive guide, our financial planners in Bangalore break down the concept, benefits, key features, types of lease financing, and practical use cases—helping you navigate leasing as part of a broader financial strategy.

This guide will help you understand how financial leasing supports smarter asset management and long-term planning.

What is a Financial Lease?

A financial lease is a contractual agreement where the lessor (financing company) allows the lessee (user) to use an asset for most of its useful life in exchange for fixed lease payments. The ownership, however, stays with the lessor until the end of the lease term, at which point the lessee may have the option to purchase the asset at a predetermined price.

Leasing Definition in Finance

In general terms, leasing in financial services refers to a financing method where an asset is rented instead of purchased. It provides flexibility, conserves capital, and often includes maintenance and service agreements.

Features of Financial Lease

Several features of financial lease distinguish it from operational leases and other financing methods:

Long Tenure: Typically spans most of the asset’s useful life.
Transfer of Risk and Rewards: The lessee assumes risks like depreciation, maintenance, and insurance.
Fixed Lease Payments: Pre-determined payments ensure predictable cash outflow.
Purchase Option: Often includes a clause to buy the asset at the end of the lease.
Non-Cancelable: Once agreed upon, the lease generally cannot be cancelled prematurely without significant penalties.

These features of lease financing make financial leases a practical option for asset-heavy businesses.

Types of Leasing in Financial Services

Understanding the types of lease financing is essential when choosing a lease that aligns with your business goals. Here’s a quick look at the types of leasing in financial services:

1. Financial Lease

As discussed, it allows long-term usage with the possibility of asset ownership at the end.

2. Operating Lease

Short-term in nature, the lessor bears the risk of obsolescence. Common in equipment and vehicle rentals.

3. Sale and Leaseback

Involves selling an owned asset to a leasing company and leasing it back, thereby freeing up capital.

4. Leveraged Lease

Involves multiple parties—typically a lender, lessor, and lessee—to finance high-cost assets.

5. Direct Lease

Involves a direct contract between the lessee and lessor, commonly used for machinery and IT equipment.

Advantages of Lease Financing

Why should a business opt for lease financing over outright purchase or bank loans? Let’s explore the advantages of lease financing:

1. Capital Conservation

Leasing frees up working capital, which can be used for other operational or growth-related activities.

2. Easy Access to Equipment

Businesses can obtain the latest equipment without a heavy upfront investment.

3. Flexibility in Terms

Leases can be customized based on payment structure, duration, and end-of-term options.

4. Tax Benefits

Lease payments may be deductible as business expenses, potentially lowering taxable income. That’s where tax consultation services and a reliable tax planner can help you navigate regulations effectively.

5. Off-Balance Sheet Financing (for Operating Leases)

In some cases, leases don’t appear as liabilities on the balance sheet, improving financial ratios.

Finance Lease Advantages and Disadvantages

Like any financial product, finance leases come with pros and cons.

Advantages

Fixed, predictable payments
No large upfront investment
Option to own the asset
Access to high-value equipment

Disadvantages

The lessee is responsible for maintenance and insurance
Lease is usually non-cancelable
Cost over time may exceed asset value
May not offer flexibility if the asset becomes obsolete

How Financial Leasing Works: A Step-by-Step Breakdown

Let’s simplify how a financial lease transaction typically unfolds:

Asset Identification: The lessee identifies the asset (e.g., machinery or vehicle).
Lessor Engagement: A leasing company purchases the asset on behalf of the lessee.
Agreement Signing: The terms, such as duration and payments, are mutually agreed upon.
Asset Delivery: The asset is handed over to the lessee for usage.
Periodic Payments: Lessee makes fixed monthly or quarterly payments.
End-of-Term Option: The lessee may purchase the asset, extend the lease, or return it.

Real-Life Example of Financial Lease

Case: A Manufacturing Company

A textile manufacturer in Bangalore needed advanced weaving machinery costing ₹40 lakhs. Instead of depleting working capital, it chose a financial lease arrangement with a tenure of 5 years and fixed quarterly payments.

Outcome:

The company preserved liquidity
Benefited from predictable expenses
Acquired machinery that boosted production
Eventually purchased the asset at a nominal cost

This example illustrates how financial consultant services can structure leasing solutions tailored to operational goals.

Is Financial Lease Right for You?

Financial leases are best suited for businesses that:

Require high-value assets for long-term use
Want predictable payment schedules
Are okay with maintaining the leased asset
Plan to eventually own the asset

However, startups or companies with rapidly changing needs might benefit more from operating leases or shorter financing options. Consulting a financial management advisor can help evaluate suitability.

Financial Lease vs Operating Lease: Key Differences
Feature	Financial Lease	Operating Lease
Ownership	Possible at lease-end	Retained by lessor
Lease Tenure	Long-term	Short-term
Risk of Obsolescence	Borne by lessee	Borne by lessor
Cancelability	Generally non-cancelable	Cancelable
Asset Use	Most of its useful life	Partial use

The Rise of Tech-Enabled Leasing in the Digital Era

As businesses embrace digital transformation, financial leasing has also undergone a significant evolution. What was once a paper-heavy, manual process is now being revolutionized by technology. Today, companies—especially startups and SMEs—can explore and secure lease financing entirely online.

Digital leasing platforms are simplifying the process through:

Real-time credit assessments for faster approvals
Automated documentation that reduces paperwork and manual errors
App-based lease management for real-time tracking of payments and schedules
Instant comparisons of leasing options from multiple providers

These innovations not only speed up the leasing cycle but also offer greater transparency and accessibility. Businesses can now make quicker, more informed decisions with minimal administrative overhead.

Another emerging trend is the integration of IoT and smart tracking in leased assets. This gives both lessors and lessees the ability to:

Monitor asset usage and wear in real time
Automate maintenance reminders and service logs
Extend the life of high-value equipment through proactive insights
Reduce misuse and downtime with data-backed analytics

Such advancements are particularly useful for industries that depend heavily on machinery, logistics, and IT infrastructure. As leasing becomes more intelligent and agile, it’s essential to work with a knowledgeable financial consultant who understands how to blend traditional lease structures with modern digital tools.

Whether you’re a growing enterprise or an innovation-led startup, tech-enabled financial leasing is paving the way for smarter asset acquisition and more strategic financial management.

Regulatory and Tax Considerations in India

Under Indian taxation laws, lease payments in financial leases are not considered direct purchases and may be treated differently for depreciation and GST purposes. This makes it vital to have professional guidance through investment planners or tax advisors to ensure compliance and benefit optimization.

Future Outlook of Leasing in India

The leasing sector in India is expected to grow rapidly, driven by increasing asset costs, evolving business models, and digital lending platforms. As businesses become more agile, financial leasing will evolve to encompass newer models like equipment-as-a-service and cloud leasing for IT infrastructure.

Conclusion

Understanding what a finance lease goes beyond textbook definitions. It’s a powerful financial tool that offers flexibility, capital efficiency, and strategic value for businesses. From startups acquiring their first major asset to enterprises scaling operations, finance leasing stands out as a sustainable alternative to traditional loans and purchases.

If you’re exploring ways to optimize asset acquisition and cash flow management, Fincart’s expert financial planners in Bangalore are here to guide you. We offer tailored financial advisory services to help you align leasing decisions with long-term financial goals.

Tags: Finance Planner, Financial Planning, investment planner, investment planning

June 14, 2025

The Effect of Metoprolol on Exercise – BionicOldGuy
Ever since my aortic valve replacement in 2017, I have been on the beta-blocker metoprolol. This is mostly to prevent possible heart arrhythmia but also helps control my blood pressure. It seems to be working fine and I have no noticeable side effects, other than my heart rate doesn’t seem to go up quite as high during exercise. Wednesday showed its effects more dramatically. I had finished my prescription bottle and Wednesday morning I could not find the replacement bottle. I usually take it first thing in the morning before any activity. I decided to go on my ride anyway and look for it later. Wednesday was scheduled to be a harder ride, a long brisk tempo ride followed by an interval session and on-bike strength training. I wore my chest strap for heart-rate monitoring, which I know is accurate.

Wednesday’s route, out and back on the Coyote trail to Bernal road, then south to Gilroy and back, for about 3 1/2 hours. (https://www.strava.com/activities/14768704634)

During the tempo portion of the ride I noticed my heart rate was more then 10 beats higher than I expected, approaching an average of 120, despite the fact that my perceived level of exertion was similar to recent such rides, and I passed the “talk test” so my breathing wasn’t too labored. (so people don’t get concerned that I’m talking to myself going down the road, I use the alternative of reciting the alphabet). Then during the interval session I noticed I reached heart rates into the 150s, which I haven’t seen in a while. I found the replacement bottle after I finished the ride and belatedly took my dose. But this incident planted a seed of curiosity. I noticed the bottle says to take it “in the morning”, not necessarily first thing in the morning. Researching on the web, I could not find any reason why it is not OK to exercise early in the morning and then take metoprolol. It just seems to be a good idea to take it the same time each day. So I will start taking it consistently later in the morning after my workout.

I was also curious about what is known about it’s effect on athletic performance. It is mentioned in this video by a renowned cardiologist in the UK that beta-blockers like metoprolol impair performance by keeping heart rate lower during exercise. This seems logical. If I’m doing an interval and my legs are screaming for oxygen, it seems I might not be able to go quite as hard if my heart rate remains in the 130s instead of the 150s.

There is even some evidence that n some precision sports like archery, Beta-blockers can improve performance, for example by reducing “stage fright”. https://fherehab.com/learning/beta-blockers-performance

Lately I’ve been researching topics like this on Google’s Gemini. If you click on “deep research” in the “ask Gemini” box, instead of just answering your question, it will search a bunch of relevant sites on the internet, then go through the results and make a report. This is a fun use of AI. So I did this, and typed in “Metoprolol’s Impact on Athletic Performance”. It came up with this detailed report, from which I learned a lot. It does appear that metoprolol affects endurance performance, such as a slight lowering in maximal oxygen consumption (VO2max). My taking metoprolol is necessary for the prevention of possible arrhythmia. But for anyone who is taking this or another beta-blocker solely for preventing high blood pressure, there are alternative blood pressure medicines, discussed in the report, that have much lower effect on performance.

There is also a good discussion about beta-blockers and exercise on this website. The bottom line is it is perfectly safe to exercise vigorously while taking metoprolol, and it doesn’t seem to matter whether you take it before or after, as long as you take it the same time each day.

I’m not really worried about some slight impairment in performance. And since I’ve been on the drug since 2017, and mostly interested in competing “against myself”, all my recent performances I’d be comparing against were equally affected.
Share this:

Related
Published by BionicOldGuy

I am a Mechanical Engineer born in 1953, Ph. D, Stanford, 1980. I have been active in the mechanical CAE field for decades. I also have a lifelong interest in outdoor activities and fitness. I have had both hips replaced and a heart valve replacement due to a genetic condition. This blog chronicles my adventures in staying active despite these bumps in the road.
View all posts by BionicOldGuy

Published
June 13, 2025June 12, 2025
June 14, 2025
Starting off the new financial year the right way!

Just like any other new year we start off with good intentions however the difference between success and failure depends on how hard we work at our resolutions. Sitting down and planning our goals for the year ahead is important and this planning time can help us achieve our goals. .

Goal setting helps us to visualise what we want to achieve in our business and what steps need to be taken to achieve these. Visualising what can happen if you don’t make goal planning a priority can be a good motivator for you to take positive actions.

Visualise this; what happens if you are constantly overspending in your business and personally life? The stress of not being able to pay your bills on time is one, which can then lead to penalties and interest being applied. It’s never pleasant when your holiday savings need to be used to pay down business debt.

Creating a budget and sticking to it. (check out our article on budgeting to help and the resource section for budget templates). It doesn’t matter whether you need to buy groceries or a new computer for the office. You want to make sure every spend is a good one. If you have created a budget where you can track income and expenses, you’ll know exactly what you can and cannot afford. For those on Xero check out the Xero Budget Manager .

What can you do to be able to afford what you want? Work on your business plan.

This new financial year make it a habit to work on your business plan and if you don’t have one yet, the best way forward is to create a business plan to help achieve your goals.

Your business plan will help you to look at all areas of your business from marketing to financials so you can set yourself goals to achieve. For example, if you need to increase revenue what actions can you take? Write them all down in your business plan as SMART goals. A business plan is a live document which means you can update it and improve as you go. Check out our article on Business planning tools to find an option that can help you.

A great tip for business planning and budgeting is to find a business advisor. The person you have to answer to when you don’t do what you say you’re going to do. It could be a business coach or your accountant, but it’s a great motivator when you have to answer to someone besides yourself.

Remember to include tax planning (income tax, GST, FBT, and provisional tax etc), which includes when you need to have returns done by, and ensure your payment plan is included in your budget. There is nothing worse than thinking you have enough money to book a great holiday to realise that you have a provisional tax payment due to next week and don’t have enough money set aside!

Need helpful templates and guides? Take a look at these informative resource links:

June 14, 2025
Why Would I Need to Get Life Insurance for My Child? – Life Happens
Life insurance is a topic usually associated with adults since it provides peace of mind for those who have someone depending on them financially. But there is life insurance coverage for minors as well, known as child life insurance or juvenile life insurance.

It can sound unnecessary or even a little morbid, but child life insurance offers an array of benefits, including financial planning and future insurability for your child. Let’s dive into what child life insurance is, its purpose and the key considerations when exploring this option.

Understanding Child Life Insurance

Child life insurance is typically a permanent policy designed to serve multiple purposes. Its primary function is to offer a death benefit in the tragic event of a child’s passing. While no parent wants to contemplate that scenario, it can ensure financial support for your family during an emotionally challenging time.

Another common reason parents (or grandparents) get coverage for their child is to build cash value over time. This cash value is not only a monetary asset, but also a tool for supporting their future financial needs.

Who Benefits from Child Life Insurance?

Child life insurance can help with a few key things: guaranteeing your child’s future insurability, forming a fund for major expenses later in life through the cash value and providing a death benefit if needed.
1. Future insurability:
  
  It can’t be overstated how important this first part is: securing your child’s future insurability. Unfortunately, you can’t predict what health conditions may impact your child as they age. Depending on the situation, they could be uninsurable later in life. If they’re insured now, they’ll be able to keep that permanent policy for life regardless of any health issues that may arise.
  
  Plus, life insurance premiums are typically more affordable the younger and healthier you are. By getting coverage for your child at a young age (as early as two weeks old), you can safeguard your child’s access to insurance and get a better policy at a more affordable rate than if they tried to get that same coverage as an adult.
Getting a Child Life Insurance Policy

Purchasing a child life insurance policy is relatively straightforward. Through a licensed agent, parents (or grandparents with parental consent) can initiate the process of life insurance planning for their child. Generally, healthy children can be covered with ease, involving a questionnaire and a medical record check. In most cases, there’s no requirement for a physical examination if the child is born healthy. However, if a child is born prematurely or with health concerns, there might be a waiting period until they’re a year old or older.

Child life insurance policies are permanent, providing coverage throughout their lifetime, but flexibility remains a hallmark of these policies. They can be canceled at any point through cash surrendering, cashing out the policy’s value or discontinuing premium payments. If cashed out, there might be tax implications for permanent policies. Notably, these policies also enable policyholders to take out loans against the cash value, so it’s important to consult an insurance professional about your options.

In conclusion, the benefits of child life insurance extend far beyond its surface. It’s an investment in your child’s future insurability, a vehicle for financial planning and a means of establishing a strong foundation for life’s milestones. Whether you’re a parent or grandparent, exploring child life insurance could be key to unlocking a brighter future for the ones you love.
June 14, 2025
Why Gilt Fund NAVs Fell Despite RBI’s 0.5% Rate Cut?
Why Gilt Fund NAV fall after RBI rate cut? Understand why NAVs dropped despite a 0.5% repo rate cut, with insights on yields, RBI policy, and market reactions.

The Reserve Bank of India (RBI) recently reduced the repo rate by 0.50%, marking the third consecutive rate cut. Naturally, many debt fund investors—especially those invested in Gilt Funds and Gilt Constant Maturity Funds—expected a rally in NAVs. After all, bond prices and interest rates generally move in opposite directions. When interest rates fall, bond prices rise, leading to capital gains, especially in long-duration bonds like those held by gilt funds.

But what surprised many investors was the exact opposite: on the day the RBI announced the rate cut, the NAVs of constant maturity gilt funds actually fell.

This anomaly has created confusion and concern among investors. In this article, we’ll delve deeper into this counterintuitive outcome, analyze what really drives gilt fund NAVs, and understand the broader macro factors influencing the debt market—especially why a rate cut doesn’t always mean rising gilt fund NAVs.

Why Gilt Fund NAVs Fell Despite RBI’s 0.5% Rate Cut?

What Are Gilt and Gilt Constant Maturity Funds?

Before diving into the reasons, let’s clarify what gilt funds and constant maturity gilt funds are:
- Gilt Funds invest primarily in government securities (G-Secs) of varying maturities (minimum 80% in G-secs, across maturity). They are zero-credit-risk products, meaning the principal and interest are backed by the Government of India.
- Gilt Constant Maturity Funds are a subtype of gilt funds that only invest in G-Secs with a constant maturity of around 10 years (minimum 80% in G-secs, across maturity), as mandated by SEBI. These funds are highly sensitive to interest rate changes due to their long duration.
Because of this sensitivity, they are typically expected to perform very well during a falling interest rate cycle.

The General Rule: Interest Rates vs Bond Prices

When the repo rate—the rate at which the RBI lends to banks—falls, it signals an easing monetary policy. This typically results in a fall in yields across the bond market and a rise in bond prices.

Here’s why:
- Bonds issued earlier (at higher interest rates) become more attractive.
- New bonds will be issued at lower yields, making existing high-yield bonds more valuable.
- This pushes prices of long-duration bonds (like 10-year G-Secs) higher.
So, NAVs of gilt funds, especially constant maturity funds, usually rise when rates fall. Then why didn’t this happen recently?

What Actually Happened on the Day of the Rate Cut?

Let’s analyze the market behavior on the Friday when the RBI announced the 50 basis points cut.

Bond Yields Spiked Instead of Falling

Despite the rate cut, the 10-year G-Sec yield rose by around 5–7 basis points. This means bond prices fell, since yield and price are inversely related.

This is the primary reason why NAVs of constant maturity gilt funds fell on that day. These funds are directly linked to the 10-year G-Sec, so any spike in the yield translates into a fall in NAV.

But why did yields spike on a day when they were supposed to fall?

Deeper Analysis: 5 Key Reasons for the Gilt Fund NAV Fall

1. Bond Market Anticipation Was Already Ahead

The bond market is forward-looking. It had already priced in the rate cut well in advance. When the actual announcement was made, there was no surprise factor.

In fact, many traders had already booked gains on expectations of the cut and started selling to lock in profits, leading to selling pressure and rising yields.

2. Dovish Rate Cut, But Hawkish Commentary

The RBI’s monetary policy statement matters as much as the rate cut itself.

While the rate cut was dovish, the accompanying commentary was neutral to slightly hawkish, which spooked the bond market. Here’s what made investors nervous:
- No clear future guidance about further rate cuts.
- Caution regarding inflationary risks.
- Increased emphasis on fiscal concerns, which could lead to higher government borrowing.
These concerns reduced expectations of an extended easing cycle, thereby causing yields to rise.

3. RBI’s Silence on Open Market Operations (OMOs)

The bond market was expecting the RBI to announce Open Market Operations (OMOs) to absorb excess supply of government bonds.

But the RBI didn’t mention any new OMO calendar.

This disappointed the market. Without RBI support, there’s a risk of bond oversupply, which leads to falling prices and rising yields.

In a simple way to explain, when the government borrows money (by issuing bonds), there’s a lot of supply of bonds in the market. If too many bonds are available and not enough buyers, bond prices fall and yields go up. This is bad news for gilt funds, as their NAV drops when bond prices fall.

To prevent this, the RBI sometimes steps in and buys bonds from the market through something called Open Market Operations (OMOs). This is like a big buyer entering a market to support prices.

But in this case, although the RBI cut the repo rate, it didn’t say anything about buying bonds through OMOs. This made investors worry:

“If the RBI doesn’t step in, who will buy all these bonds? Prices might fall!”

So, due to this lack of support from RBI, the bond market reacted negatively, bond prices fell, and as a result, gilt fund NAVs dropped.

4. Concerns Over Fiscal Deficit and Borrowing

The government’s borrowing program and fiscal health play a crucial role in bond markets.

Due to rising subsidies, welfare schemes, and tax revenue shortfalls, the market expects a higher fiscal deficit, which means more bond supply.

More supply leads to:
- Lower prices
- Higher yields
- Negative impact on gilt NAVs
Remember, constant maturity gilt funds invest heavily in 10-year bonds. So, any indication that the government will flood the market with bonds causes their prices to fall.

5. Global Cues and U.S. Bond Yields

Indian bond markets are not immune to global interest rate trends.

Around the same time, U.S. Treasury yields were rising due to:
- Strong economic data
- Reduced expectations of U.S. Fed rate cuts
Foreign investors (FIIs), who hold significant portions of Indian bonds, often react to global movements. Rising U.S. yields reduce the attractiveness of Indian G-Secs, leading to FII outflows, selling pressure, and rising yields domestically.

Should Investors Worry About Gilt Fund NAV Fall?

Not necessarily. Here’s why:
- Do note that Gilt Funds are highly volatile in nature (even though they invest in government bonds). Hence, explore Gilt Funds only for your long term goals. Hence, never use Gilt Funds by looking at past returns for your short term goals (or even for medium term goals).
- Volatility is normal in debt markets, especially in long-duration products like constant maturity gilt funds.
- Even though short-term NAVs may fall, the long-term return potential remains intact, especially if the interest rate cycle continues to ease gradually.
- Gilt constant maturity funds are suitable for investors with a time horizon of more than 5–7 years (Gilt Constant maturity funds are best suitable if your goals are mothan 10 years away), who can tolerate interim volatility.
What Should You Do Now?

If You’re Already Invested:
- Don’t panic due to short-term NAV movements.
- Stay invested if your time horizon is long and you’re aware of the volatility.
- Constant maturity gilt funds are not for short-term parking or for conservative investors.
If You’re Planning to Invest:
- Be clear that duration risk is high in these funds.
- These funds work best when interest rates are expected to fall steadily over time.
- Consider entering in phases (SIP/STP) rather than lump sum, especially during volatile times.
Conclusion

The fall in gilt fund NAVs, despite the RBI’s rate cut, may seem confusing, but it’s a classic example of how market expectations, fiscal concerns, and global cues can override straightforward monetary policy logic.

While the repo rate is a key driver, the bond market reacts to a range of factors—RBI’s guidance, future rate outlook, supply of bonds, and global interest rates.

As always, debt fund investing—especially in long-duration categories like gilt constant maturity—requires a solid understanding of risk, patience, and a long-term approach.

For Unbiased Advice Subscribe To Our Fixed Fee Only Financial Planning Service
June 14, 2025