Which gold mutual funds are worthy of your investment

gold mutual funds

gold

Gold is a liquid asset and can be sold without any potential capital loss. It is one of the prime tools used by the economy and investors for hedging against inflation. To see how gold performs during inflationary times all you need to do is track metrics like gold rate today Nizamabad or gold mutual funds  or Allahabad during such times and you won’t be disappointed.

But what are gold mutual funds?

Gold mutual funds are the funds that invest in gold and gold-related securities. The primary objective of these funds is to provide returns that track the performance of gold prices.

Gold funds invest in a variety of gold-related instruments, including stocks of companies that mine the metal or sell it in some form. They may also invest in funds that track the price of the metal directly. However, most gold funds are not an effective hedge against inflation as they do not generate any income.

These funds should be considered as an investment option only by those investors who already have a diversified portfolio and would like to add exposure to gold to their portfolio as part of asset allocation.

What are the different types of gold mutual funds?

Gold mutual funds offer investors the opportunity to invest in gold without having to buy physical gold bars or coins. The minimum investment amount for such funds is usually Rs 1,000. They come in two types:

  1. Gold ETFs:

These are special equity schemes that track the price of physical gold by owning gold bullion. Their prices go up and down according to changes in the price of the metal on exchanges like the Multi Commodity Exchange (MCX). To find the right time to invest in these you should stay upto date with the gold rate today in Thrissur or any other place so that you don’t miss the right opportunity. 

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2. Gold Fund of Funds (FOFs):

Instead of owning physical gold or gold ETFs, they invest your money into units of other mutual funds that invest in gold ETFs. This makes them slightly less expensive than investing directly into a gold ETF because they don’t have any outright expense

If you are considering investing in gold, here is a look at the top 6 gold mutual funds you can invest in.

1. Kotak Gold Fund:

This fund has been rated 5 stars by Morningstar for its consistent performance. The fund seeks to generate long-term capital appreciation by investing in equity and equity-related securities of companies whose main business is gold or the businesses that benefit from the movement of gold prices. The minimum amount to invest in Kotak Gold Fund is Rs 5,000 and SIPs can be started with an amount of Rs 1,000 monthly.

2. Axis Gold Fund:

Axis Gold Fund has been rated 3 stars by Morningstar. It seeks to achieve long term growth through investments in equity and equity-related securities of companies engaged in the production or trading of gold or companies which benefit substantially from the movement in the price of gold. The minimum amount required to open an account with Axis Gold Fund is Rs 5,000 and SIPs can be started with an amount of Rs 500 monthly.

3. SBI Gold Fund:

This fund seeks to provide regular income distributions along with capital appreciation. The SBI Gold Fund is ranked among the best gold funds because it has a low risk and high return ratio. It is an ideal option for investors who are looking to diversify their portfolio with precious metals like gold and silver bullion or ETFs that track these metals’ prices respectively as well as companies producing them such as Barrick Gold Corporation (ABX) or Yamana Gold Incorporated (AUY).

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