In today’s market ups and downs, many investors in India are looking for ways to keep their wealth the same for a long time. Learn How Gold Mutual Funds Are Becoming the New Hedge Against Market? Gold mutual funds investment in India are rising as a smart option for those who want stability without physically holding the gold.
Why Are Gold Mutual Funds So Popular Now?
Gold has always been a trusted safeguard for most Indian investors from the start. With the rise in tensions between the countries, volatile stock market, and unpredictable interest rates, gold is growing faster than ever. But rather than buying jewellery or gold coins, people now prefer mutual funds investment in India that invest in gold.
Key reasons why Gold Mutual Funds are trending:
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No need for physical storage: You don’t need to worry about your personal locker and security.
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Low entry cost: You can easily start investing with as little as ₹500 through SIPs (Systematic Investment Plans).
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Liquidity: You can collect your units easily whenever you need money.
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Professional management: You get a professional fund manager who makes all buying and selling decisions.
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Tax benefits: Long-term capital gains tax after 3 years is lower as compared to physical gold.
How Gold Funds Work
Gold Mutual Funds invest mostly in Gold Exchange Traded Funds, which is called ETFs in short. These ETFs track down the domestic gold price. So when the price of gold rises, your investment value also boosts.
Here are the most reputed AMCs (Asset Management Companies) in India that offers gold fund:
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HDFC Gold Fund
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ICICI Prudential Regular Gold Savings Fund
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SBI Gold Fund
These well-known AMCs invest in 99.5% pure gold through ETFs, which provides transparency and safety.
Association of Mutual Funds in India (AMFI)
SEBI Mutual Fund Regulations
When Should You Invest in Gold Funds?
Financial experts advice to keep 5% to 15% of your mutual fund investment in India portfolio in gold. It acts as a safeguard when equity markets drop.
Ideal situations to consider Gold Mutual Funds:
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When the economy is experiencing a drop.
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When the stock markets are highly volatile.
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If you want to diversify your mutual fund portfolio.
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When the rupee weakens compared to the dollar.
How to Pick the Right Gold Fund
Picking the best gold mutual fund is as important as investing itself. Here are some quick tips on how to pick the right fund smartly:
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Make sure to compare the expense ratios from different funds. Lower the expense ratios, higher will be your returns.
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Always check the past performance, but don’t always depend on it completely.
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Prefer funds from well-established and reputed AMCs.
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Fully understand how the fund invests, which is mostly in domestic gold ETFs.
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Don’t forget to match it with your best mutual fund portfolio strategy for 2025.
If you’re just beginning your investments in a gold fund, then it’s a wise option to learn how to choose the right mutual fund in India. Make sure to read the scheme documents and take advice from a financial advisor.
Final Thoughts
Gold Mutual Funds are becoming a smart hedge for investors in India who are worried about market disruptions. Because they provide the shine of gold without the trouble of storage and security.
If you are looking to protect your wealth for the long-term, then adding a gold fund to your mutual fund portfolio might just be the best thing you need.