What is Gold Mutual Fund & How it is beneficial?
What is a gold mutual fund? – A gold mutual fund is a type of mutual fund that invests in gold or gold-related assets. This means that when you invest in a gold mutual fund, you are indirectly investing in gold.
How do gold mutual funds work?
Gold mutual funds work by buying and selling gold or gold-related assets. The fund manager will decide which assets to buy and sell, based on their view of the gold market.
What are the benefits of investing in gold mutual funds?
There are a few benefits to investing in gold mutual funds:
Diversification: Gold is a non-correlated asset, which means that it does not move in the same way as other asset classes, such as stocks and bonds. This can help to diversify your portfolio and reduce your risk.
Liquidity: Gold mutual funds are liquid, which means that you can easily buy and sell them. This is important if you need to access your money quickly.
Tax benefits: Gold mutual funds are subject to the same capital gains tax rules as other mutual funds. This means that you can defer taxes on your gains until you sell the units.
What are the risks of investing in gold mutual funds? There are a few risks to investing in gold mutual funds:
Price volatility: The price of gold can be volatile, which means that your investment can go up or down in value quickly.
Costs: There are fees associated with investing in gold mutual funds, such as management fees and trading costs.
Liquidity: Gold mutual funds may be illiquid, which means that it can be difficult to sell them quickly at a good price.
If you are considering investing in a gold mutual fund, it is important to understand the benefits and risks involved. You should also do your research to find a fund that is right for you.
Here are some of the best gold mutual funds in India:
- Axis Gold Fund
- SBI Gold Fund
- HDFC Gold Fund
- Kotak Gold Fund
- Aditya Birla Sun Life Gold Fund
These funds have a good track record and have been consistently performing well. However, it is important to do your own research before investing in any fund.