Gold has long been considered a safe-haven asset and a hedge against inflation and economic instability. Investing in gold can help diversify a financial portfolio and provide steadiness during market instability. While real gold has usually been the chosen financial route, gold mutual funds offer a handy and cost-effective way to gain exposure to the valuable metal. This piece reviews the best gold mutual funds to buy in India in 2024, their success, and the factors to consider before buying.
What are Gold Mutual Funds?
Gold mutual funds are specialized mutual fund schemes that mainly invest in gold-related products, such as gold bars, gold exchange-traded funds (ETFs), or stocks of companies involved in the gold mining and research business. These funds aim to expose investors to the price changes of gold, allowing them to benefit from the possible growth of the valuable metal without directly keeping or saving gold.
Overview of Top 10 Best Gold Mutual Funds to Invest in India 2024
HDFC Gold Fund: This open-ended Fund mainly deals with real gold of 99.5% quality. It aims to generate returns that nearly match those created by investing in real gold.
ICICI Prudential Gold Fund: This Fund invests in real gold and gold-related products, hoping to provide investors with profits that closely track the local prices of gold.
Nippon India Gold Savings Fund: This Fund invests mainly in gold bars and related products, exposing buyers to real gold’s price changes.
Aditya Birla Sun Life Gold Fund: This Fund mainly invests in gold bars and related assets to give returns that closely track the performance of gold prices.
DSP BlackRock World Gold Fund: This invests in stock and equity-related assets of gold mining, research, and production businesses worldwide.
Kotak Gold Fund: This invests in gold bars and related assets, hoping to provide returns that closely match those created by dealing in real gold.
Invesco India Gold Fund: This Fund mainly invests in gold bars and related products, exposing buyers to real gold’s price changes.
Mirae Asset Gold Exchange Traded Fund: This ETF tracks the local prices of gold and aims to provide returns that nearly match the returns produced by investing in real gold.
Axis Gold Exchange Traded Fund: This ETF deals in real gold and aims to provide profits that closely track the local prices of gold.
SBI Gold Fund: This Fund invests in gold bars, gold-related assets, and other stocks that provide exposure to the gold mining and research business.
Performance List of Best Gold Mutual Funds in India
| Fund | 1-Year Returns | 3-Year Returns | 5-Year Returns |
| HDFC Gold Fund | 12.3% | 9.6% | 10.2% |
| ICICI Prudential Gold Fund | 11.8% | 9.1% | 9.7% |
| Nippon India Gold Savings Fund | 12.1% | 9.4% | 10.0% |
| Aditya Birla Sun Life Gold Fund | 11.9% | 9.3% | 9.9% |
| DSP BlackRock World Gold Fund | 10.5% | 8.2% | 8.8% |
| Kotak Gold Fund | 12.0% | 9.5% | 10.1% |
| Invesco India Gold Fund | 11.7% | 9.2% | 9.8% |
| Mirae Asset Gold Exchange Traded | 12.2% | 9.5% | 10.1% |
| Axis Gold Exchange Traded Fund | 11.9% | 9.4% | 10.0% |
| SBI Gold Fund | 11.6% | 9.0% | 9.6% |
How to Find The Best Gold Mutual Funds?
Identifying the best gold mutual funds requires careful study and consideration of various factors. Here are some steps you can follow:
● Examine the Fund’s Investment Aim: Ensure that the Fund’s investment aim fits with your financial goals and risk tolerance. Gold funds can have different goals, such as watching the price of real gold or investing in gold mine businesses.
● Evaluate the Fund’s Performance: Analyze the Fund’s success over different periods, considering both returns and volatility. Compare its performance against relevant standards and peers to rate its stability and risk-adjusted results.
● Review the Fund’s Expense Ratio: Gold funds can have different cost rates, impacting your total results. Opt for funds with reasonable cost ratios to maximize your possible gains.
● Consider the Fund Manager’s Experience: Evaluate the fund manager’s knowledge, track record, and investing strategy. A seasoned fund manager with a steady financial method can be helpful for long-term success.
● Analyze the Fund’s Portfolio: Examine its Fund’s makeup to understand its exposure to gold-related products, industries, and regional regions. Diversification can reduce risks connected with buying in a single asset class.
● Check the Fund’s Risk Profile: Assess the Fund’s profile and ensure it fits your general investing strategy and risk tolerance. Gold funds can be subject to market instability and changes in gold prices.
Why Should You Invest in Gold Through Mutual Funds?
Investing in gold through mutual funds offers several benefits over absolute gold ownership:
● Professional Management: Gold mutual funds are handled by experienced fund managers who study and deal with gold and gold-related products.
● Diversification: Gold mutual funds provide diversification benefits by investing in a basket of gold-related assets, lowering the risk of investing in a single asset.
● Cost-effectiveness: Investing in gold mutual funds removes the need for physical storage, insurance, and other costs involved with having actual gold.
● Liquidity: Gold mutual fund units can be easily bought or sold, allowing investors to access their capital as needed.
● Convenience: Gold mutual funds offer a simple way to gain exposure to gold without the trouble of directly keeping or saving the valuable metal.
Benefits of buying on Best Gold Mutual Funds
Investing in the best gold mutual funds in India 2024 can offer several benefits:
● Diversification: Gold is often considered a safe-haven asset and can help broaden an investment strategy, offering a hedge against market instability and economic unpredictability.
● Potential for capital appreciation: Gold prices tend to rise during economic turmoil, inflation, or international issues, offering the potential for capital appreciation.
● Liquidity: Gold mutual funds offer liquidity, allowing buyers to buy or sell units with ease, unlike actual gold, which can be more challenging to trade.
● Professional management: Experienced fund managers handle the selection and management of gold-related products, giving buyers professional knowledge.
● Affordable investment: Gold mutual funds allow investors to gain exposure to gold with a relatively small investment amount, making it an easy choice for various investor types.
Factors to Consider Before Investing in Best Gold Mutual Funds
Before buying the best gold mutual funds, it’s essential to consider the following factors:
● Investment objective: Determine your investment goals and ensure that the gold mutual fund fits your aims, whether capital growth, variety, or a hedge against inflation.
● Risk tolerance: Gold prices can be volatile, and gold mutual funds may experience changes in their yields. Assess your risk level and spend appropriately.
● Investment horizon: Gold investments are usually suitable for long-term buyers, as short-term price changes can impact profits. Determine your financial plan and choose a fund that fits your time frame.
● Expense ratio: Compare the expense ratios of different gold mutual funds to ensure you’re not paying excessive fees, which can reduce your profits over time.
● Fund performance: Evaluate the Fund’s performance over different periods and compare it with relevant standards and peers to measure its stability and risk-adjusted results.
● Fund manager experience: Consider the knowledge and track record of the fund manager(s) handling the gold mutual Fund. Fund knowledge and financial mindset can significantly affect the Fund’s funds.
● Portfolio composition: Analyze the Fund’s makeup to understand its exposure to gold-related products, sectors, and regional regions. Diversification within the gold asset class can reduce risks.
● Tax implications: Understand the tax implications of buying gold mutual funds, as the tax approach may vary based on factors such as the holding time and the type of Fund (eFundy or debt-oriented).
● Entry and exit loads: While participating in gold mutual funds, be aware of any entry or exit loads that may be relevant, as these can impact your total profits, especially for short-term investments.
● Lock-in periods: Some gold mutual funds may have lock-in periods, during which you cannot recover your investment. Ensure that the lock-in term, if any, fits with your financial plan and cash needs.
By carefully considering these factors, you can make an informed choice and choose the best gold mutual fund that fits your investment goals, risk tolerance, and general financial plan.
Conclusion
Investing in gold mutual funds can broaden your financial portfolio and gain exposure to the valuable metal market. The 10 best gold mutual funds featured in this article offer investors a range of choices, catering to different investment goals, risk profiles, and investment horizons. By conducting detailed research, reviewing fund success, and considering factors such as cost ratios, portfolio makeup, and fund manager experience, investors can make informed choices and benefit from the potential growth and security of gold investments.
However, it’s important to remember that buying in gold mutual funds, like any other investment, carries risks, and past success does not promise future results. Seeking professional financial advice and performing regular portfolio reviews can ensure that your investments match your long-term financial goals and risk tolerance.
Disclaimer:
Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
