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Table of Contents
- Why Gold Funds Are Gaining Popularity?
- Taxation on Gold Mutual Funds
- Top Performing Gold Funds to Invest in India (2025)
- Top 4 Benefits of Gold Investments
- Who Can Invest Gold Mutual Funds?
- How Invest in Gold Funds Online?
- Is It the Right Time to Invest in Gold Mutual Funds with Gold Prices Rising?
- Conclusion:
- FAQs
Top 8 Gold - Gold Funds
8 Best Gold Mutual Funds 2025
Gold has emerged as an important Asset Class in most portfolios, given its ability to grow with Inflation and protect the Portfolio from Volatility caused by financial and economic crises. As gold continues to be a key part of a well-rounded investment strategy, Gold Mutual Funds have gained significant popularity in recent years.
Today, gold as an investment is available in many forms, such as physical gold, E-Gold, etc. However, Gold Funds have emerged as one of the most accessible and popular routes for gold investments. Let’s take a close look at some of the best Gold Mutual Funds to invest in 2025.
Why Gold Funds Are Gaining Popularity?
Indians have always been culturally inclined towards buying gold, whether for ornamental purposes or wealth creation. Festivals, weddings, and celebrations throughout the year further reinforce this tradition. While earlier, physical gold used to be the preferred choice, Gold Mutual Funds have become increasingly popular due to their numerous benefits over physical gold, including:
- Minimum investment amount (starting as low as INR 100 through SIP),
- Diversification of assets,
- No Demat account requirement,
- SIP growth potential for systematic wealth creation,
- liquidity, as units can be bought or sold from the fund house.
Gold Mutual Funds are a variant of Gold ETFs (Exchange-Traded Funds). While gold ETFs directly invest in gold bullion or securities linked to gold prices, Gold Mutual Funds invest in gold ETFs on behalf of investors. Unlike physical gold, there are no storage hassles, and gold prices are tracked in real-time, Offering investors transparency and security.
Minimum investment for Gold Mutual Funds typically starts at INR 100, making it easy for investors to enter the Market with small amounts, and systematic Investment plan (SIPs) allow for flexible, long-term growth.
Taxation on Gold Mutual Funds
Gold Mutual Funds are taxed based on Capital gains and the holding period. If you hold the fund for less than 24 months, your gains are taxed as short-term Capital Gains (STCG) at 20% as per your applicable income tax slab rate. However, if the holding period exceeds 24 months, the capital gains are considered long-term capital gains (LTCG) and taxed at a uniform rate of 12.5%, with no indexation benefits.
Top Performing Gold Funds to Invest in India (2025)
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2023 (%) IDBI Gold Fund Growth ₹25.2353
↑ 0.02 ₹104 18.2 22.9 31.9 21.4 13.6 18.7 Aditya Birla Sun Life Gold Fund Growth ₹28.0678
↓ -0.11 ₹555 17.9 22.2 31.7 21.1 13.1 18.7 SBI Gold Fund Growth ₹28.2586
↓ -0.15 ₹3,582 18.2 22.2 31.1 21 13.1 19.6 Axis Gold Fund Growth ₹28.1635
↓ -0.16 ₹944 17.5 21.9 31 21 13.5 19.2 ICICI Prudential Regular Gold Savings Fund Growth ₹29.9041
↓ -0.17 ₹1,909 18.2 22.1 30.9 20.9 13.1 19.5 HDFC Gold Fund Growth ₹28.863
↓ -0.15 ₹3,558 18.1 22 30.9 20.9 13 18.9 Nippon India Gold Savings Fund Growth ₹36.9836
↓ -0.22 ₹2,744 18 22.1 31 20.8 13 19 Invesco India Gold Fund Growth ₹27.3305
↓ -0.21 ₹142 17.3 21.9 31 20.6 13.7 18.8 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 25 Apr 25 Gold Funds having AUM/Net Assets > 25 Crore ordered based on 3 year Calendar year returns.
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The investment objective of the Scheme will be to generate returns that correspond closely to the returns generated by IDBI Gold Exchange Traded Fund (IDBI GOLD ETF). IDBI Gold Fund is a Gold - Gold fund was launched on 14 Aug 12. It is a fund with Moderately High risk and has given a Below is the key information for IDBI Gold Fund Returns up to 1 year are on An Open ended Fund of Funds Scheme with the investment objective to provide returns that tracks returns provided by Birla Sun Life Gold ETF (BSL Gold ETF). Aditya Birla Sun Life Gold Fund is a Gold - Gold fund was launched on 20 Mar 12. It is a fund with Moderately High risk and has given a Below is the key information for Aditya Birla Sun Life Gold Fund Returns up to 1 year are on The scheme seeks to provide returns that closely correspond to returns provided by SBI - ETF Gold (Previously known as SBI GETS). SBI Gold Fund is a Gold - Gold fund was launched on 12 Sep 11. It is a fund with Moderately High risk and has given a Below is the key information for SBI Gold Fund Returns up to 1 year are on To generate returns that closely correspond to returns generated by Axis Gold ETF. Axis Gold Fund is a Gold - Gold fund was launched on 20 Oct 11. It is a fund with Moderately High risk and has given a Below is the key information for Axis Gold Fund Returns up to 1 year are on ICICI Prudential Regular Gold Savings Fund (the Scheme) is a fund of funds scheme with the primary objective to generate returns by investing in units of ICICI Prudential Gold Exchange Traded Fund (IPru Gold ETF).
However, there can be no assurance that the investment objectives of the Scheme will be realized. ICICI Prudential Regular Gold Savings Fund is a Gold - Gold fund was launched on 11 Oct 11. It is a fund with Moderately High risk and has given a Below is the key information for ICICI Prudential Regular Gold Savings Fund Returns up to 1 year are on To seek capital appreciation by investing in units of HDFC Gold Exchange Traded Fund (HGETF). HDFC Gold Fund is a Gold - Gold fund was launched on 24 Oct 11. It is a fund with Moderately High risk and has given a Below is the key information for HDFC Gold Fund Returns up to 1 year are on The investment objective of the Scheme is to seek to provide returns that closely correspond to returns provided by Reliance ETF Gold BeES. Nippon India Gold Savings Fund is a Gold - Gold fund was launched on 7 Mar 11. It is a fund with Moderately High risk and has given a Below is the key information for Nippon India Gold Savings Fund Returns up to 1 year are on To provide returns that closely corresponds to returns provided by Invesco India Gold Exchange Traded Fund. Invesco India Gold Fund is a Gold - Gold fund was launched on 5 Dec 11. It is a fund with Moderately High risk and has given a Below is the key information for Invesco India Gold Fund Returns up to 1 year are on 1. IDBI Gold Fund
CAGR/Annualized return of 7.6% since its launch. Return for 2024 was 18.7% , 2023 was 14.8% and 2022 was 12% . IDBI Gold Fund
Growth Launch Date 14 Aug 12 NAV (25 Apr 25) ₹25.2353 ↑ 0.02 (0.08 %) Net Assets (Cr) ₹104 on 31 Mar 25 Category Gold - Gold AMC IDBI Asset Management Limited Rating Risk Moderately High Expense Ratio 0.65 Sharpe Ratio 1.62 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-12 Months (1%),12 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,000 31 Mar 22 ₹11,326 31 Mar 23 ₹13,151 31 Mar 24 ₹14,541 31 Mar 25 ₹19,184 Returns for IDBI Gold Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9.5% 3 Month 18.2% 6 Month 22.9% 1 Year 31.9% 3 Year 21.4% 5 Year 13.6% 10 Year 15 Year Since launch 7.6% Historical performance (Yearly) on absolute basis
Year Returns 2023 18.7% 2022 14.8% 2021 12% 2020 -4% 2019 24.2% 2018 21.6% 2017 5.8% 2016 1.4% 2015 8.3% 2014 -8.7% Fund Manager information for IDBI Gold Fund
Name Since Tenure Sumit Bhatnagar 1 Jun 24 0.75 Yr. Data below for IDBI Gold Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 1.33% Other 98.67% Top Securities Holdings / Portfolio
Name Holding Value Quantity LIC MF Gold ETF
- | -99% ₹92 Cr 119,347
↑ 12,271 Treps
CBLO/Reverse Repo | -1% ₹1 Cr Net Receivables / (Payables)
Net Current Assets | -1% -₹1 Cr 2. Aditya Birla Sun Life Gold Fund
CAGR/Annualized return of 8.2% since its launch. Return for 2024 was 18.7% , 2023 was 14.5% and 2022 was 12.3% . Aditya Birla Sun Life Gold Fund
Growth Launch Date 20 Mar 12 NAV (25 Apr 25) ₹28.0678 ↓ -0.11 (-0.40 %) Net Assets (Cr) ₹555 on 31 Mar 25 Category Gold - Gold AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 0.51 Sharpe Ratio 1.65 Information Ratio 0 Alpha Ratio 0 Min Investment 100 Min SIP Investment 100 Exit Load 0-365 Days (1%),365 Days and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹9,940 31 Mar 22 ₹11,371 31 Mar 23 ₹13,025 31 Mar 24 ₹14,416 31 Mar 25 ₹18,985 Returns for Aditya Birla Sun Life Gold Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9.1% 3 Month 17.9% 6 Month 22.2% 1 Year 31.7% 3 Year 21.1% 5 Year 13.1% 10 Year 15 Year Since launch 8.2% Historical performance (Yearly) on absolute basis
Year Returns 2023 18.7% 2022 14.5% 2021 12.3% 2020 -5% 2019 26% 2018 21.3% 2017 6.8% 2016 1.6% 2015 11.5% 2014 -7.2% Fund Manager information for Aditya Birla Sun Life Gold Fund
Name Since Tenure Priya Sridhar 31 Dec 24 0.16 Yr. Data below for Aditya Birla Sun Life Gold Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 1.87% Other 98.13% Top Securities Holdings / Portfolio
Name Holding Value Quantity Aditya BSL Gold ETF
- | -100% ₹511 Cr 67,773,270
↑ 3,265,683 Clearing Corporation Of India Limited
CBLO/Reverse Repo | -1% ₹3 Cr Net Receivables / (Payables)
Net Current Assets | -0% -₹2 Cr 3. SBI Gold Fund
CAGR/Annualized return of 7.9% since its launch. Return for 2024 was 19.6% , 2023 was 14.1% and 2022 was 12.6% . SBI Gold Fund
Growth Launch Date 12 Sep 11 NAV (25 Apr 25) ₹28.2586 ↓ -0.15 (-0.53 %) Net Assets (Cr) ₹3,582 on 31 Mar 25 Category Gold - Gold AMC SBI Funds Management Private Limited Rating ☆☆ Risk Moderately High Expense Ratio 0.29 Sharpe Ratio 1.59 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹9,722 31 Mar 22 ₹11,159 31 Mar 23 ₹12,913 31 Mar 24 ₹14,265 31 Mar 25 ₹18,680 Returns for SBI Gold Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9.2% 3 Month 18.2% 6 Month 22.2% 1 Year 31.1% 3 Year 21% 5 Year 13.1% 10 Year 15 Year Since launch 7.9% Historical performance (Yearly) on absolute basis
Year Returns 2023 19.6% 2022 14.1% 2021 12.6% 2020 -5.7% 2019 27.4% 2018 22.8% 2017 6.4% 2016 3.5% 2015 10% 2014 -8.1% Fund Manager information for SBI Gold Fund
Name Since Tenure Raj gandhi 1 Jan 13 12.17 Yr. Data below for SBI Gold Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 1.34% Other 98.66% Top Securities Holdings / Portfolio
Name Holding Value Quantity SBI Gold ETF
- | -100% ₹3,232 Cr 439,902,410
↑ 29,358,199 Net Receivable / Payable
CBLO | -1% -₹27 Cr Treps
CBLO/Reverse Repo | -1% ₹20 Cr 4. Axis Gold Fund
CAGR/Annualized return of 8% since its launch. Return for 2024 was 19.2% , 2023 was 14.7% and 2022 was 12.5% . Axis Gold Fund
Growth Launch Date 20 Oct 11 NAV (25 Apr 25) ₹28.1635 ↓ -0.16 (-0.55 %) Net Assets (Cr) ₹944 on 31 Mar 25 Category Gold - Gold AMC Axis Asset Management Company Limited Rating ☆ Risk Moderately High Expense Ratio 0.24 Sharpe Ratio 1.58 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,025 31 Mar 22 ₹11,437 31 Mar 23 ₹13,264 31 Mar 24 ₹14,661 31 Mar 25 ₹19,150 Returns for Axis Gold Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9% 3 Month 17.5% 6 Month 21.9% 1 Year 31% 3 Year 21% 5 Year 13.5% 10 Year 15 Year Since launch 8% Historical performance (Yearly) on absolute basis
Year Returns 2023 19.2% 2022 14.7% 2021 12.5% 2020 -4.7% 2019 26.9% 2018 23.1% 2017 8.3% 2016 0.7% 2015 10.7% 2014 -11.9% Fund Manager information for Axis Gold Fund
Name Since Tenure Aditya Pagaria 9 Nov 21 3.31 Yr. Pratik Tibrewal 1 Feb 25 0.08 Yr. Data below for Axis Gold Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 2.87% Other 97.13% Top Securities Holdings / Portfolio
Name Holding Value Quantity Axis Gold ETF
- | -99% ₹857 Cr 119,827,570
↑ 8,979,678 Clearing Corporation Of India Ltd
CBLO/Reverse Repo | -2% ₹16 Cr Net Receivables / (Payables)
Net Current Assets | -0% -₹4 Cr 5. ICICI Prudential Regular Gold Savings Fund
CAGR/Annualized return of 8.4% since its launch. Return for 2024 was 19.5% , 2023 was 13.5% and 2022 was 12.7% . ICICI Prudential Regular Gold Savings Fund
Growth Launch Date 11 Oct 11 NAV (25 Apr 25) ₹29.9041 ↓ -0.17 (-0.58 %) Net Assets (Cr) ₹1,909 on 31 Mar 25 Category Gold - Gold AMC ICICI Prudential Asset Management Company Limited Rating ☆ Risk Moderately High Expense Ratio 0.4 Sharpe Ratio 1.56 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-15 Months (2%),15 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,050 31 Mar 22 ₹11,473 31 Mar 23 ₹13,247 31 Mar 24 ₹14,669 31 Mar 25 ₹19,133 Returns for ICICI Prudential Regular Gold Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9.2% 3 Month 18.2% 6 Month 22.1% 1 Year 30.9% 3 Year 20.9% 5 Year 13.1% 10 Year 15 Year Since launch 8.4% Historical performance (Yearly) on absolute basis
Year Returns 2023 19.5% 2022 13.5% 2021 12.7% 2020 -5.4% 2019 26.6% 2018 22.7% 2017 7.4% 2016 0.8% 2015 8.9% 2014 -5.1% Fund Manager information for ICICI Prudential Regular Gold Savings Fund
Name Since Tenure Manish Banthia 27 Sep 12 12.43 Yr. Nishit Patel 29 Dec 20 4.17 Yr. Data below for ICICI Prudential Regular Gold Savings Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 1.73% Other 98.27% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Pru Gold ETF
- | -100% ₹1,740 Cr 236,566,280
↑ 16,326,224 Treps
CBLO/Reverse Repo | -1% ₹16 Cr Net Current Assets
Net Current Assets | -1% -₹15 Cr 6. HDFC Gold Fund
CAGR/Annualized return of 8.2% since its launch. Return for 2024 was 18.9% , 2023 was 14.1% and 2022 was 12.7% . HDFC Gold Fund
Growth Launch Date 24 Oct 11 NAV (25 Apr 25) ₹28.863 ↓ -0.15 (-0.53 %) Net Assets (Cr) ₹3,558 on 31 Mar 25 Category Gold - Gold AMC HDFC Asset Management Company Limited Rating ☆ Risk Moderately High Expense Ratio 0.49 Sharpe Ratio 1.62 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load 0-6 Months (2%),6-12 Months (1%),12 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹9,979 31 Mar 22 ₹11,392 31 Mar 23 ₹13,135 31 Mar 24 ₹14,530 31 Mar 25 ₹19,074 Returns for HDFC Gold Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9% 3 Month 18.1% 6 Month 22% 1 Year 30.9% 3 Year 20.9% 5 Year 13% 10 Year 15 Year Since launch 8.2% Historical performance (Yearly) on absolute basis
Year Returns 2023 18.9% 2022 14.1% 2021 12.7% 2020 -5.5% 2019 27.5% 2018 21.7% 2017 6.6% 2016 2.8% 2015 10.1% 2014 -7.3% Fund Manager information for HDFC Gold Fund
Name Since Tenure Arun Agarwal 15 Feb 23 2.04 Yr. Nirman Morakhia 15 Feb 23 2.04 Yr. Data below for HDFC Gold Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 2.06% Other 97.94% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Gold ETF
- | -100% ₹3,294 Cr 450,199,644
↑ 19,173,364 Treps - Tri-Party Repo
CBLO/Reverse Repo | -0% ₹9 Cr Net Current Assets
Net Current Assets | -0% ₹0 Cr 7. Nippon India Gold Savings Fund
CAGR/Annualized return of 9.7% since its launch. Return for 2024 was 19% , 2023 was 14.3% and 2022 was 12.3% . Nippon India Gold Savings Fund
Growth Launch Date 7 Mar 11 NAV (25 Apr 25) ₹36.9836 ↓ -0.22 (-0.60 %) Net Assets (Cr) ₹2,744 on 31 Mar 25 Category Gold - Gold AMC Nippon Life Asset Management Ltd. Rating ☆☆ Risk Moderately High Expense Ratio 0.34 Sharpe Ratio 1.55 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-1 Years (2%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹9,956 31 Mar 22 ₹11,456 31 Mar 23 ₹13,213 31 Mar 24 ₹14,599 31 Mar 25 ₹19,055 Returns for Nippon India Gold Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9.3% 3 Month 18% 6 Month 22.1% 1 Year 31% 3 Year 20.8% 5 Year 13% 10 Year 15 Year Since launch 9.7% Historical performance (Yearly) on absolute basis
Year Returns 2023 19% 2022 14.3% 2021 12.3% 2020 -5.5% 2019 26.6% 2018 22.5% 2017 6% 2016 1.7% 2015 11.6% 2014 -8.1% Fund Manager information for Nippon India Gold Savings Fund
Name Since Tenure Himanshu Mange 23 Dec 23 1.19 Yr. Data below for Nippon India Gold Savings Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 3.07% Other 96.93% Top Securities Holdings / Portfolio
Name Holding Value Quantity Nippon India ETF Gold BeES
- | -98% ₹2,580 Cr 362,884,792
↑ 9,655,000 Net Current Assets
Net Current Assets | -1% ₹31 Cr Triparty Repo
CBLO/Reverse Repo | -0% ₹12 Cr Cash Margin - Ccil
CBLO | -0% ₹0 Cr 8. Invesco India Gold Fund
CAGR/Annualized return of 7.8% since its launch. Return for 2024 was 18.8% , 2023 was 14.5% and 2022 was 12.8% . Invesco India Gold Fund
Growth Launch Date 5 Dec 11 NAV (25 Apr 25) ₹27.3305 ↓ -0.21 (-0.76 %) Net Assets (Cr) ₹142 on 31 Mar 25 Category Gold - Gold AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 0.45 Sharpe Ratio 1.6 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-6 Months (2%),6-12 Months (1%),12 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 31 Mar 20 ₹10,000 31 Mar 21 ₹10,219 31 Mar 22 ₹11,561 31 Mar 23 ₹13,495 31 Mar 24 ₹14,930 31 Mar 25 ₹19,501 Returns for Invesco India Gold Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 25 Apr 25 Duration Returns 1 Month 9% 3 Month 17.3% 6 Month 21.9% 1 Year 31% 3 Year 20.6% 5 Year 13.7% 10 Year 15 Year Since launch 7.8% Historical performance (Yearly) on absolute basis
Year Returns 2023 18.8% 2022 14.5% 2021 12.8% 2020 -5.5% 2019 27.2% 2018 21.4% 2017 6.6% 2016 1.3% 2015 21.6% 2014 -15.1% Fund Manager information for Invesco India Gold Fund
Name Since Tenure Krishna Cheemalapati 1 Mar 25 0 Yr. Data below for Invesco India Gold Fund as on 31 Mar 25
Asset Allocation
Asset Class Value Cash 3.81% Other 96.19% Top Securities Holdings / Portfolio
Name Holding Value Quantity Invesco India Gold ETF
- | -98% ₹124 Cr 166,343
↑ 11,350 Triparty Repo
CBLO/Reverse Repo | -3% ₹4 Cr Net Receivables / (Payables)
Net Current Assets | -1% -₹1 Cr
Top 4 Benefits of Gold Investments
1. Hedge Against Inflation
Gold is often seen as a hedge against inflation. When inflation rises, the value of gold tends to rise as well, offering stability in uncertain times. Unlike cash, which may lose its purchasing power, gold’s value increases over time, making it a safe asset during inflationary periods.
2. Liquidity
Gold is highly liquid, meaning it can be easily sold in times of need. Compared to physical gold, Gold ETFs and Gold Mutual Funds offer higher liquidity since they can be sold through the mutual fund house or stock exchange.
3. Diversification
Gold is often referred to as a “safe-haven” asset. Its price movements usually have low correlation with stock markets, making it a valuable tool for diversification. When stock markets are volatile or declining, gold often performs better, helping to protect your portfolio from significant losses.
4. Valuable Asset
Gold has maintained its value for centuries. While it may not always offer explosive returns, it is a stable asset that provides moderate returns over time. In certain short periods, such as during economic crises, it has even shown significant returns.
Who Can Invest Gold Mutual Funds?
Gold Mutual Funds are ideal for:
- Investors who do not have a Demat account or are not interested in buying physical gold.
- People looking for small initial investments and systematic wealth creation.
- Individuals who want to benefit from gold's stability without the risks and hassles of storing physical gold.
Gold Mutual Funds are suitable for anyone seeking diversification and capital appreciation while enjoying the flexibility of no physical storage requirements and a low entry barrier.
How Invest in Gold Funds Online?
Open Free Investment Account for Lifetime at Fincash.com.
Complete your Registration and KYC Process
Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!
Is It the Right Time to Invest in Gold Mutual Funds with Gold Prices Rising?
The short answer is Yes, but with a few nuances to consider.
1. Gold Prices and Timing the Market
Gold prices fluctuate due to a variety of economic factors, including inflation, interest rates, and market instability. When gold prices are rising, it's often a response to economic or geopolitical uncertainty (e.g., inflationary pressures, stock market volatility, or currency Depreciation).
Historically, gold has performed well when other asset classes (like stocks or Bonds) Underperform. However, predicting exact price movements is difficult, and timing the market isn't always a reliable strategy.
2. Dollar-Cost Averaging (DCA) Strategy
One of the most reliable strategies, particularly for gold mutual funds, is Systematic Investment Plans (SIP). With SIPs, you invest a fixed amount regularly, regardless of gold’s price. This approach helps mitigate the risk of trying to buy at the "peak" or "bottom" of a price cycle.
SIP advantage: By Investing consistently, you average out your cost of investment, potentially avoiding the risks of buying at a high price.
3. Gold as a Long-Term Investment
Gold’s role in a portfolio is typically as a long-term hedge against inflation and economic instability. Although the price of gold may rise or fall in the short term, its value has historically held up well over long periods.
Even with rising gold prices, the fundamentals of gold as a store of value remain unchanged. If you invest in gold mutual funds for the long term, you’re likely to see positive returns, as gold often outperforms during inflationary periods or financial crises.
4. Economic Environment
If inflation is rising or if the global Economy is facing turbulence (e.g., financial market instability or currency depreciation), gold becomes an attractive investment. As gold is negatively correlated with other asset classes (like equities), it can serve as a safe-haven investment.
Interest rates also play a key role—when rates are low, gold often performs better, since it becomes more appealing compared to other assets like bonds or savings accounts that offer low returns.
5. Considerations for Rising Gold Prices
If gold prices are increasing now, it could indicate a strong demand for gold, driven by inflation or uncertainty in the markets. If you're planning to invest in gold mutual funds, remember that rising prices could mean higher entry points, but the long-term benefits could still outweigh the short-term fluctuations.
Gold’s cyclical nature: After periods of significant price increases, gold often experiences corrections. However, over the long term, its average returns tend to outpace inflation and provide stability to a diversified portfolio.
Conclusion:
It remains a good time to invest in gold mutual funds, particularly if you’re looking at long-term gains. Consider using SIPs to average out the cost of buying, and remember that gold’s role as a hedge against inflation and volatility is unlikely to change.
FAQs
1. What should I look for while investing in gold mutual funds?
A: A: When choosing a gold mutual fund, compare its growth rate, Net Asset Value (NAV), and historical returns. It’s also essential to consider fund size, expense ratios, and fund manager performance.
2. Why should I invest in a gold fund?
A: A gold mutual fund offers a hedge against market volatility and inflation. It’s also a liquid investment and provides diversification in your portfolio.
3. Why should I invest in SBI Gold?
A: SBI Gold Fund is one of the leading funds with a proven track record of growth, showing steady returns over time. It is backed by SBI Mutual Fund, one of India’s most trusted names in the Financial Sector.
4. Why should I invest in Axis Gold Fund?
A: Axis Gold Fund has demonstrated strong returns since its inception and is known for consistent growth. Its reliable performance makes it a solid choice for conservative gold investors.
5. Why should I invest in Kotak Gold Fund?
A: Kotak Gold Fund has been one of the best performers in the gold mutual fund space, offering competitive annual returns and a well-managed portfolio.
6. Is investing in gold funds safe?
A: Yes, gold mutual funds are generally safe. However, like all investments, they are subject to market fluctuations. Over the long term, however, gold has proven to be a stable asset class.
By Rohini Hiremath
Rohini Hiremath works as a Content Head at Fincash.com. Her passion is to deliver financial knowledge to the masses in simple language. She has a strong background in start-ups and diverse content. Rohini is also an SEO expert, coach and motivating team head!
You can connect with her at rohini.hiremath@fincash.com
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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Really a useful knowledge. for investment decision.espically for gold and global fund investments.
Very informative.
Which gold investment fund will be good for me pls suggest for 1- 1.3 years