Reliance Gold fund

POSTED BY Hari Sudhan ON July 17, 2013 1:18 pm COMMENTS (5)

Hi

I started my SIP in Reliance Gold fund on March-2011. So far I have managed to accumulate 1 lakh (approx) with the current CAGR of -4.54% and Absolute return of -5.25%.

Now my financial adviser said that AMCs are no more going to offer any new Gold ETF funds.
Not sure if this is correct, and even if correct not sure of the reason !!!

In this scenario, he says it is better to close the existing reliance gold fund.

I was hoping that this fund would spring back in value as it has been performing good in the past ( 1 year back it had a CAGR of almost 20% ), till then I keep buying at the current low rate. This ‘may’ lead to good profit in the future.

Please suggest what do you think is the best in this scneario and current gold ETF trend.

Thanks
Hari Sudhan

5 replies on this article “Reliance Gold fund”

  1. Hari Sudhan says:

    Hi Ashal

    Its not performing now …. but as I said that’s not the case in the past.
    Hence I am just speculating that this fund may perform well in the future.

    As I am not completely sure, hence the fundamental question of –

    “Should I continue SIP in this fund or stop and redirect my investment to something else ?” [ Please refer my first post in this thread ]

    I am sure someone will answer my question this time 🙂

    Thanks
    Hari Sudhan

  2. Dear Hari, if the underlying asset – gold is not performing or going down, how can your fund provide positive returns. Regarding the announcements of business of gold by Reliance. It’s merely falling in line as the Govt. of india wants to (zero or low investment in gold by general public). 🙂

    Thanks

    Ashal

  3. Hari Sudhan says:

    Nagarajan

    Why should I invest in gold ETF only for the need of a physical gold ?

    I am treating this Reliance Gold fund just like any other mutual fund [ to build corpus for future need ]
    By investing in Gold I thought it just adds more diversification to my existing investment portfolio.

    Also from internet …

    ” Reliance Capital Asset Management will suspend new subscriptions in Reliance Gold Savings Fund — a gold-backed exchange traded fund. Existing SIP investors will not, however, be affected by this decision. The company says the move is intended to help the government battle the current account deficit by reducing gold imports ”

    … this being the case is it not good to retain gold fund as part of your portfolio ?

    Thanks
    Hari Sudhan

    1. As long as your goal is many years away no harm in continuing the gold etf provided you realize the following:

      1. Long term goal returns are not double digit.
      2. The tax angle
      3. The investment is only a small portion of your portfolio.

  4. Nagarajan Santhan says:

    Hi Hari

    Reliance AMC stopped new business in Gold Fund and they continue with Existing investments.

    Don’t bother about this scenario, you can continue your existing investments as long as (as per your wish).

    My advise, if you really required physical gold in future (ex. for your daughter’s marriage) continue otherwise stop your SIP and invest money in some diversified funds.

    Nagarajan

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