Many investors turn to gold as a way to hedge their bets when the market is unstable. Its price tends to move inversely with equities, so gold often serves as protection against short-term stock market volatility.
There are more ways than one to invest in gold. You can buy physical forms of gold like coins, bars, and jewelry. You can also invest in digital gold via mutual funds, ETFs, and sovereign bonds. Through these options, you can invest in gold without having to physically own it.
If you would rather not own physical gold, gold mutual funds can be a good alternative.
Mutual funds that invest in Gold ETFs are called gold funds.
This category of funds are investment vehicles that rely on the instruments linked to the prices of gold which also invest in gold bullion. Returns align with changes in the price of gold.
Investing in paperless gold mutual funds can be highly beneficial to those looking to gain from their investment.
Here are five of the best gold funds in India 2021, sorted by five-year returns:
|Sr. No.||Fund Name|
|a.||ICICI Prudential Regular Gold Savings FoF|
|b.||Kotak Gold Fund|
|c.||Axis Gold Direct Plan|
|d.||SBI Gold Direct Plan|
|e.||Quantum Gold Savings Fund|
The demand and supply of gold all around the world affect prices. This causes fluctuations in gold prices.
Just like any other investment option, even the best Indian Gold Funds face market risk and price fluctuation. However, in the long term risks, fluctuations, and losses even out for most investment options.
You can invest in gold without the inconvenience of owning it with gold funds. If you do not want to own physical gold and remain invested in the commodity, gold mutual funds along with digital or paper gold, ETFs, and bonds are other investment options.
You have to pay a 20% tax on long-term capital gains while short-term investments are also subjected to the slab rates. A three-year holding period will be considered as long-term for gold funds.
Due to current tax laws, while investing via Mutual Funds, capital gains after 3 years of holding will be taxed at 20%, while short-term capital gains (less than three years) are added to your taxable income and taxed as per the taxpayer's income tax rate.
The gold funds that invest in domestic gold ETFs are known as ‘Gold Funds.’ Different Gold Funds have different methods of investing, and some include international exposure as well. Your goals will determine the type of Gold Fund you choose.
Best wishes for investing!
A list of mutual funds segregated into different markets.
Aug. 20, 2021 | 3 min read
The power of compounding is a powerful concept and the …
Aug. 21, 2021 | 3 min read
Long-term investments help with securing funds for your future, as …
Aug. 24, 2021 | 3 min read
A mutual fund is a professionally managed money pool that …
Aug. 24, 2021 | 4 min read
There are many types of equity funds, but the most …
Aug. 24, 2021 | 2 min read
Investing in India can be overwhelming with the various options …
Aug. 24, 2021 | 1 min read
The markets, after the nosedive in march due to the …
Aug. 25, 2021 | 3 min read
Debt mutual funds offer investors an alternative to low-risk, fixed …
Aug. 27, 2021 | 5 min read
Do you want to know what percentage of your income …
Aug. 27, 2021 | 3 min read
Read more about what the difference between Alpha and Beta …
Aug. 27, 2021 | 4 min read