GOLD ETF and GOLD MUTUAL FUNDS in India
What is a Gold Mutual Fund ?
A gold mutual fund is a mutual fund which invests in gold. When you buy or invest in a gold mutual fund, the fund managers invest your money in gold. Typically, when prices of gold increase, the gold mutual fund performs well. The exact performance and the returns you get depend on how the fund managers manage your money, when do they buy and/or sell, etc. You will be charged a small fee called entry load, typically around 2.5% at the time when you invest.
What is NAV of a Gold Mutual Fund? Just like any other mutual fund, when you invest in a gold mutual fund, you buy units of that mutual fund. The price of one unit is called NAV or Net asset value. When the mutual fund makes profit, the NAV increases. If it makes loss the NAV decreases and so on. If you want to invest more, you buy more units. If you want to get part or whole of your cash you have invested back, you can sell some or all of the mutual fund units you have. The NAV can also be used to compare the performance of different gold mutual funds.
What is a GOLD ETF ?GOLD ETF or GOLD Exchange Traded Fund is a Gold Mutual Fund which can be bought and/or sold in the stock market like any other shares or equities. Click on ETF to know more about Exchange traded funds.
List of Gold Mutual Funds and Gold ETFs in India-Examples, Latest NAV and Comparison:
The following table gives a list of some of the popular Gold Mutual Funds in India. Clicking on the links below will take you to their Moneycontrol.com page where you can find their latest NAV's. You may use these links to compare the NAV and past performance of the gold mutual funds.
| Gold Mutual Fund | Returns in 1 year | Latest NAV | Entry Load | Exit Load |
| AIG World Gold Fund | - | LATEST NAV | 2.25% | 1% |
| DSP ML World Gold Fund | -0.85% | LATEST NAV | 2.25% | NIL |
| Kotak Gold ETF | 16.7% | LATEST NAV | 1.5% | NIL |
| Benchmark Gold ETF | 16.7% | LATEST NAV | NIL | NIL |
| UTI Gold ETF | 16.8% | LATEST NAV | 2.5% | NIL |
| RELIANCE GOLD ETF | - | LATEST NAV | NIL | NIL |
| QUANTUM GOLD ETF | - | LATEST NAV | NIL | 0.5% |
*I have only compared mutual funds with growth options. All the above mutual funds also have dividend options. However, in order to compare the above gold mutual funds, it would be enough to compare either of the growth or dividend options.
*AIG Gold Fund, Reliance Gold ETF and Quantum Gold ETF have not completed one year.
DSP ML Gold mutual fund seems to have performed horribly. Its returns in the past 6 months are -40% which is bad by any standards, even though gold prices have dropped. So of the above gold mutual funds, avoid DSP ML Gold Mutual Fund and go for Kotak Gold ETF, Benchmark Gold ETF, or UTI Gold ETF. Benchmark Gold ETF has the added advantage that if you invest with them directly, you have no entry or exit load. This is a huge bonus.
Advantages of Investing in a GOLD MUTUAL FUND and GOLD ETF :*AIG Gold Fund, Reliance Gold ETF and Quantum Gold ETF have not completed one year.
DSP ML Gold mutual fund seems to have performed horribly. Its returns in the past 6 months are -40% which is bad by any standards, even though gold prices have dropped. So of the above gold mutual funds, avoid DSP ML Gold Mutual Fund and go for Kotak Gold ETF, Benchmark Gold ETF, or UTI Gold ETF. Benchmark Gold ETF has the added advantage that if you invest with them directly, you have no entry or exit load. This is a huge bonus.
- It is much more hassle free and safe as compared to buying physical gold. If you buy physical gold, you have to worry about its purity, storage, security etc. Moreover buying / selling gold from the market takes much more effort and time.
- More affordable for small investors than buying gold futures on commodities exchange. Gold futures are typically in lots of 1kg, while the price of a Gold ETF is typically 1 gram (sometimes even 1/2 gram) of gold.
- Trading and investing in Gold ETFs is a matter of a few clicks once you have a DEMAT account and an online trading account.
Following table summarizes the list of GOLD ETFs traded on NSE India, and their relative turnover (i.e. traded quantity) on NSE.
| NSE Symbol | Gold Mutual Fund | Turnover |
| GOLDBEES (BENCHMARK GOLD ETF) | Benchmark Gold Mutual Fund | high |
| KOTAKGOLD KOTAK GOLD ETF | Kotak Gold Mutual Fund | medium |
| GOLDSHARE UTI GOLD ETF | UTI Gold Mutual Fund | medium |
| RELGOLD RELIANCE GOLD ETF | Reliance Gold Mutual Fund | medium |
| QGOLDHALF QUANTUM GOLD ETF | Quantum Gold Mutual Fund | low |
* The price of all the above GOLD ETFs, except QGOLDHALF, is roughly equal to the current price of 1 gram of gold. The price of QGOLDHALF is roughly equal to the current price of 1/2 gram of gold.
* Clicking on the name of the GOLD ETF above will take you to the corresponding page of NSE's website
Related posts :
* Clicking on the name of the GOLD ETF above will take you to the corresponding page of NSE's website
Related posts :
- ETFs in India - All those "BeES" on NSE
- Liquid Funds : What, Why, How, etc.
- Introduction to Mutual Funds
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