Gold Mutual Fund Schemes – Expert tells what to keep in mind while investing here!

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What are your opportunities for investing in Gold? Which instruments you should consider for investments? What about Gold Savings Mutual Fund Schemes? What are the things that the investors should keep in mind while opting for this scheme? If these questions are on top of your mind, then we have an answer. Zee Business expert Jitendra Solanki gives these useful insights.  

Expert Jitendra Solanki’s top tips for Gold Savings Mutual Fund Schemes 

Solanki said that the Gold Savings Mutual Fund Schemes are fund of funds. They spend into Gold ETFs. There are many options for the investors including HDFC Gold Funds, Nippon India Gold Savings, ICICI Prudential Gold Savings Fund, Aditya Birla Sun Life Gold Fund. These are some of the good funds and there will not be much to choose between them in terms of returns he said.  

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But the biggest determinant will be the expense ratio. Whichever funds has the lowest expense ratio will give a greater return, he added. The underlying instrument in all these schemes is Gold ETF. 

The advantage of Gold Savings Mutual Fund Schemes over physical gold is that investments in these funds allows one to accumulate gold as an asset class without having to physically buy gold. These funds have an added advantage which is that the investors need not worry about storage costs, safety and liquidity problems concerned with physical gold. 

These are different from the Gold ETFs in a manner that a gold fund is a type of mutual fund and the value of its units are derived from the fund’s Net Assets Value (NAV) at the end of a trading session.  

Meanwhile, a gold ETF is an exchange traded fund which is listed on the stock exchanges. One can get the real-time value of a gold ETF from the stock exchange at any time during the trading session.     

Another good option is the Sovereign Gold Bonds (SGBs) which are now open for subscription and will be available till 15 January 2020. The issuance date of this tranche will be on 19 January 2020.