Mutual Funds – Gold Funds

POSTED BY Balaji Karthikeyan ON March 12, 2012 2:46 pm COMMENTS (6)

Hello All,

I wanted to invest in one of the Gold Mutual Funds like SBI, Kotak, or Reliance Gold Fund. My questions or concerns are –
1. Is it good to invest in Gold Mutual funds or Gold ETF’s?
2. What is the better way to invest in anything relating to gold (Gold ETF’s, Gold MF’s or Gold biscuits sold by banks, or other gold instruments)

Please share your views/thoughts.

6 replies on this article “Mutual Funds – Gold Funds”

  1. BanyanFA says:

    Hi Balaji,

    Buying Gold ETF is the best option if you can on a monthly basis track and buy your ETFs like shares. You have to ignore your sentiments on the price of gold while buying ETFs on a monthly basis.

    Gold MFs are better option as they have an element of SIP which tends to trigger on a monthly basis. They are around 0.5% more expensive, but considering that they override human judgement / sentiments, I am more happy to pay for them.

    Regards
    BFA

  2. Balaji Karthikeyan says:

    @justgrowmymoney, thanks for sharing the link and also your reponse. I already have a demat account. You suggest in having this investment for over 10 years.

    @ashal jauhari. Thanks for your response. My concern was that I dont have any investments in Gold portfolio. I have put money in my wife’s jewellery. However, I am sure that cannot be counted as investment. 🙂
    Here is my brief portfolio –
    Term Insurance – cover for 1 Cr. by ICICI
    Health Insurance – cover for 5 lakhs by Max Bupa
    Mutual Funds – Monthly SIP of Rs 5,000 in Fidelity Equity Fund (G), HDFC Top 200, and then in another State bank of India Balanced Fund
    Infrastructure Bonds – 30k
    Home loan currently pending for 14 lakhs.

    If you see above, I don’t have anything invested in Gold. Now that the stock market is downward trend, I am sure Gold is going to go up, which is usually the case. Hence my thought of investing in this metal. Please advise.

    @suman, 20 years is a very long term. I have never thought investing in more than 10 years. Thats the reason I am not a big fan of products like ULIP’s.

    1. Dear Balaji, Your current income, expenses, emergency funding, size of family……

      Thanks

      Ashal

  3. suman says:

    what if the investment is for a horizon of 20 years ( for childrens wedding)? even then will this turn out to be expensive?

  4. Dear Balaji Karthikeyan, May I ask why do you want to invest in gold at this point? Is it due to “all others have gained from it, I did not so I should also now invest in it” thinking?

    If possible to you & you are comfortable, please do share your other assets & investments details, your income & expenses details, your family size, no. of dependents, current insurance you are having for yourself………………….

    Please clarify.

    Thanks

    Ashal

  5. Check this discussion done already.
    http://localhost/jagoforum2/gold-etf-expense-ratio-and-etf-gold-unit-value/2916/

    Over a long duration (say 10+ years) Gold ETF come out inexpensive even if you have to pay Demat charges exclusively for the GOLD ETF. Again if you already have a demat account Gold ETF will be cheaper. If you dont have demat acc already and are looking at a shorter duration (say 5-10 years) GOLD MFs will come out cheaper. Biscuits are front loaded with costs so they are not efficient forms of holding gold.

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