Best Gold Mutual Funds in India

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.

Gold Mutual Funds:

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.

Best Gold Mutual Funds For Accumulating Wealth

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

Before investing in gold funds, there are a number of factors to consider.

The cost of gold changes regularly.

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.

Gold cannot be physically touched.

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.

Taxes

The Gold Exchange Trade Fund:

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.

Gold Fund of Fund (FoF):

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.

Conclusion

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!