Gold is considered as one of the safest havens for investment purposes. The underlying reason is the significant growth rate in gold prices in the last decade. But to the sheer disappointment of investors, recently even this shining metal has fumbled.

Thus, consequently, investors are again looking up to mutual funds as a safe sanctuary for their savings. No matter where you invest, you need to be quite vigilant before investing in mutual funds. So, investing in gold funds is something that can benefit investors.

What Are Gold Mutual Funds?

Gold funds refer to mutual funds that invest in Gold ETFs .

This category is pretty much self-explanatory as the funds in this section invest in gold ETFs or Exchange Traded Funds. These rely on the instruments that are directly linked to the prices of gold and invest in gold bullion. Returns are aligned with the price of gold.

Purpose: Someone who wants to invest in Gold in a paperless way.

Gold funds are especially beneficial at the time when there exists an uncertainty in equity markets. For instance, Jan 2008 witnessed a crash in equity markets. During that period, it was the gold mutual funds category that displayed the best performance. This is why gold funds have topped the return chart after a pause of 3 years.

So now if you are convinced enough that it is rewarding to be a die-hard fan of this precious yellow metal, then, go over and allocate your savings in gold funds to optimize your returns. To assist you in your decision-making in which Gold Funds you should invest, we would put some light on the top performing golf funds in India in 2017.

Best Gold Mutual Funds

Reliance Gold Savings Fund- Growth

AMC Name: Reliance Nippon Mutual Fund

Quarterly Average AUM-Assets under management as on 30-06-2017: ₹37.25 crore.

Net Assets on 30-06-2017: ₹69305.35 lakhs

Type: Open Ended

Investment Plan: Growth

Minimum Investment: ₹5000

NAV: ₹12.73

Expense Ratio: 0.7%

SIP Minimum Initial Investment: ₹1000

Entry Load: 0%

Exit Load: 2%

Portfolio Holdings:

Mutual Funds: Reliance ETF Gold BeES-99.91%

Money Market: CBLO-0.27%

 

Kotak Gold Fund – Growth

AMC Name: Kotak Mahindra Asset Management Company

Assets under management as on 30-06-2017: ₹169.65 cr

Net Assets on 30-06-2017: ₹16778.52 lakhs

Type: Open Ended

Investment Plan: Growth

Minimum Investment: ₹5000

NAV: ₹12.45

Expense Ratio: 0.7%

SIP Minimum Initial Investment: ₹1000

Entry Load: 0%

Exit Load: 2% on or before 6 months, 1% if redeemed after 6 months but before 1 years and Nil if redeemed after 1 year.

Portfolio Holdings:

Mutual Funds: Kotak Mahindra Mutual Funds: 98.67%%

Collateral Borrowing & Lending Obligation: 1.44%

Kotak Gold Fund – Dividend

AMC Name: Kotak Mahindra Asset Management Company

Quarterly Average AUM-Assets under management as on 30-06-2017: ₹12.18cr

Net Assets: ₹1218.39 lakhs

Type: Open Ended

Investment Plan: Dividend

Minimum Investment: ₹5000

NAV: ₹12.45

Expense Ratio: 0.7%

SIP Minimum Initial Investment: ₹1000

Entry Load: 0%

Exit Load: 2% on or before 6 months, 1% if redeemed after 6 months but before 1 years and Nil if redeemed after 1 year

Portfolio Holdings:

Mutual Funds: Kotak Mahindra Mutual Funds: 98.67%%

Collateral Borrowing & Lending Obligation: 1.44%

SBI Gold Fund – Growth

AMC Name: SBI Funds Management Limited

Quarterly Average AUM-Assets under management as on 30-06-2017: ₹385.68 crores

Net Assets: ₹38567.92 lakhs

Type: Open Ended

Investment Plan: Growth

Minimum Investment: ₹5000

NAV: ₹9.55

Expense Ratio: 0.43%

SIP Minimum Initial Investment: ₹1000

Entry Load: 0%

Exit Load: 1% for exit within 1 year of allotment and Nil if redeemed after 1 year

Portfolio Holdings:

SBI Gold Exchange Traded Scheme: 99.84%

Miscellaneous: 0.16%

gold mutual funds

Risks in Investing in Gold Funds

Fluctuations in Gold Prices

The demand and supply of gold all around the world affects the gold prices. This causes many fluctuations in the gold prices.

Just like other commodity producers, gold funds also face a high risk. This is mainly because the market price of gold is fluctuating and the price depends upon circumstances beyond the control of gold producers.

No Benefits of Taxation

Unlike equity funds, gold funds do not provide any tax benefits. Instead, taxes on long-term capital gains are taxable at 10% whereas short-term gains are taxable at slab rates applicable to the investor.

 

Concluding

Thus, it will be beneficial for investors to invest in gold funds only if they analyze the effects of investment therein. It would be better to make a portfolio of investments by consulting an investment professional.

To start investing in mutual funds, click here!

Happy investing!