Investment In Gold Mutual Funds In India


As Indian, we are enthusiastic about gold. After the Chinese, we are the second-biggest consumer of yellow metal in the world. But unlike others, most of us are buying gold like a social imperative-a family wedding, a dowry, a festival, etc. Historically, gold has worked as an inflation hedge. In moments when the economic outlook is volatile, individuals attempt to house it in their treasury. Gold prices in the worldwide economy have experienced enormous hikes and corrections so far in the latest past.

Mutual Funds can be defined as a portfolio of multi-investor pooled shares. A Gold Fund is a mutual fund or ETF (Exchange-Traded Fund) that invests mainly in companies that produce gold. If the fund invests primarily in bullion or stocks and bonds of gold manufacturers and miners, the share price within these funds will broadly correlate with the gold spot price. This fund’s goal is to get convenient returns from gold investments.

For anyone who wants to protect their capital against inflation or political instability, gold funds can be a perfect investment tool. Gold mutual funds can be of various kinds and have been described shortly below:

Gold ETFs — the underlying asset in such funds is physical gold and therefore, its value depends on the gold price. Gold ETFs are perfect for investors who want to invest in physical gold but don’t want the difficulty to deposit or protect gold against theft. A Demat account is required to invest in Gold ETFs.

Gold Mining Funds — such funds do not invest in physical gold, but instead, allow investments in gold mining firms. The returns from these funds depend on the gold mining companies ‘ performance.

Gold Fund Funds — these funds invest in Gold ETF units and investors do not need a Demat account to invest in their units.

Gold investment Fund’s list in India

Growth Gold Mutual Funds — at the end of the investment period, the gold fund growth option will help investors achieve capital gains.

Dividend Gold Mutual Funds – The dividend option will provide the investor with regular revenue in the form of dividends. The dividends can be paid out or reinvested back in the plan.

Some of India’s top gold funds were given below:

HDFC Gold Fund

Axis Gold Fund

IDBI Gold Fund

Quantum Gold Saving Fund

Invesco India Gold Fund

Aditya Birla Sun Life Gold Fund

Reliance Gold Savings Fund

Kotak Gold Fund

Canara Robeco Gold Savings Fund

ICICI Pru Regular Gold Savings Fund

SBI Gold Fund

Benefits from Gold Fund investment

  • Without having a Demat account, investors can invest in the gold.
  • Units of gold funds can be purchased and sold from any part of the country at any time during working hours due to which GST will not apply for the gold price difference.
  • Investors can take full advantage of the potential gold value without having tangible gold.
  • Gold funds can be used as a cover for geopolitical instability and inflation.
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