Characteristics of Gold Mutual Funds

For how long do you need to invest?

Gold Mutual Funds do not have a maturity period.

You can invest and redeem these funds at any time.

Also, you can put money in these funds as and when you can invest.

Where can you find gold mutual funds to invest in?

For Gold Exchange Traded Funds (ETFs), you can only invest through your Demat account.

Other Gold Mutual Funds, you can invest through an investment broker or your bank if they are offering any gold funds.

What are the returns offered by Gold Mutual Funds?

The returns of gold mutual funds are dependent on the increase or decrease of the price of gold after you have purchased the units of the fund.

What is the minimum amount you can invest every month?

For Gold ETFs, you need to buy at least one unit of Gold ETF.
The price per unit differs for different Asset Management Companies (AMCs)
For other gold mutual funds, you can invest through the Lump Sum or Systematic Investment Plan (SIP) route
The minimum investment required through monthly SIP can be ₹500/-. For some, it can be as low as ₹100 per month also.
- The minimum investment for every lump sum can be ₹500 to ₹1000, depending on the Asset Management Company (AMC)

Learn about the AMC guide here.

Learn about SIP and Lumpsum investments in Mutual Funds here.

Sounds interesting. Keep scrolling to learn more about gold mutual funds.

What are the drawbacks of investing in physical gold?

You need to pay additional costs like making charges and GST (Goods and Service Tax) while buying.
You cannot be sure of the quality and purity all the time.
You have to store it in a safe place to prevent theft.
You can only sell it at a jewellery store.
The value of your ornaments declines when sold (due to making charges).
It has emotional value; therefore, you might avoid selling it during emergencies.
You cannot quickly check the value of your physical gold. You have to visit the jewellery store to find in case of ornaments.

Virtual way of investing in gold.

Can be invested through a Demat account (Gold ETF) or bank account, or investment brokerage.

No maturity period.

Can invest through SIP or Lumpsum.

Tracks and matches the price of gold.

What are the benefits of investing in Gold Mutual Funds?

No hassles with buying physical gold.

Very low minimum monthly investment required.

It can be redeemed at any time.

Returns are equal to changes in the price of gold.

No need to worry about the gold purity, storage and additional cost while buying and selling.

Let us now learn about the things to be taken care of while investing in Gold Mutual Funds!