Best Gold Mutual Funds To Invest In 2021

As an asset class, gold has several special characteristics. Required allocations can help to diversify and improve the efficiency of a portfolio. Gold is attractive to investors of all levels of experience because it is a reliable, visible, and long-term store of value that has traditionally moved independently of other properties. India is one of the worlds largest gold consumers. Every year, nearly 8,00 tonnes of gold are imported. India is responsible for 23% of the worlds overall annual gold production. Several other factors are driving the increase in gold demand, including its historical significance in our culture, industrial use, jewelry applications, and, perhaps most notably, investment in it. This Akshaya Tritiya invest in gold funds and diversify your portfolio. nbsp; Gold mutual funds are open-ended portfolios based on the gold Exchange Traded Funds units. Since the underlying commodity is kept in the form of tangible gold, the price of this precious metal has a direct bearing on its value. Invest in these funds to construct a gold portfolio without having to purchase gold physically. These funds invest in Gold ETFs and offer the added benefit of avoiding the prices, risks, and liquidity issues associated with physical gold. Gold mutual funds are better in every way, with advantages such as low minimum investment amounts, diversification, no need for a Demat account, SIP growth, and so on. SIPs are a way to invest in gold funds. The fact that gold funds are managed by experienced fund managers is another factor that makes them a common and appealing option among investors. A gold funds investors benefit from the knowledge of experienced fund managers, who make all of the funds investment decisions based on their years of experience in the industry. Individuals can invest as low as Rs. 500, making these funds accessible to them. It gives an investor more options than buying physical gold, which can be very expensive.Advertisement Gold mutual funds are taxed depending on the number of capital gains and the length of time they have been kept. If you keep the fund for less than three years, the capital gains will be taxed at your marginal tax rate. And, whether youve got the fund for at least three years, youll have to pay tax on the capital gain at a rate of 20%, with indexation benefits. Investment Holding Duration Tax Gold Fund Short Term -Less than 3 Years Depending on the tax bracket of the investor Gold Fund Long Term - 3 Years and more 20% with indexation Name of the Fund 3 Year Return Axis Gold Fund 14.98% Kotak Gold Fund 14.08% SBI Gold Fund 14.02% Nippon India Gold Savings 13.64% Quantum Gold Savings Fund 13.58% ICICI Prudential Regular Gold Savings Fund (FOF) 13.59% Aditya Birla Sun Life Gold Fund 13.94% A gold fund, like other mutual funds, does not have outstanding returns. This is because, as the name implies, the underlying asset in a gold fund is gold, which appreciates in value only on an irregular or seasonal basis. It usually provides lower returns than other investment instruments at other times. Before investing in mutual funds, investors should read the offer papers, scheme goals, and performance reviews conducted by experts. Another crucial thing to note for any gold fund investor is that it is a hedge as well as an investment. Since gold is not affected by stock market fluctuations, it can be used to mitigate the risks associated with market-linked investment instruments.