Gold is one of the precious and valuable metals in the world. Gold was widely used as money for the exchange of wealth and commodities. Investors generally buy gold as diversifying risk, especially through the use of futures contracts and derivatives. Gold is one of the safe investments and less-risk. gold has always been reliable during financial hardships and is less volatile as an asset, gold is considered a low-risk, safe investment option especially during uncertain times as compared to other investments such as stocks.
Investing in gold has many options starting from buying gold coins to buying digital gold online. In recent days investment in gold is extended to Gold ETF, Gold Mutual funds, Sovereign Gold Bonds, Gold Futures and Options, Investing in gold companies, etc.
Gold:
Gold here refers to physical gold such as Gold Bullion, Gold Coins, Gold jewellery. The investor has to buy physical gold and store it for a period for the price to Increase and Sell it to make a profit.
- Gold Bullion: Gold Bullion is generally gold bars which are certified for its purity and weight along with serial number printed on it for security purpose.
- Gold coins: Gold coins are coins made up of gold in a smaller size. Gold coins are small in size and coins provide much more liquidity and are quite common among gold owners.
Gold jewellery: Gold jewelleryis the ornaments made out of gold, buying jewellery at retail prices involves making charges and wastage. As an art gold is profitable for the jewellerybusiness and for the buyer it is profitable in long run.
Investing in physical gold is risky and add additional cost to protecting it from theft. The investor is free from paperwork compare to Other gold investments.
Digital Gold: Digital gold is a form of investing in gold digitally in a digital wallet, here Investment can be made with the current market price of gold that is converted and accumulated in grams in the wallet. Later this can be sold online or can be ordered for physical gold coins or bars.
Gold ETF:
Gold ETF (Exchange Traded Fund) is similar to buying gold virtually and here purchased gold will be stored Demat account, Gold ETF include brokerage fees and Commissions while purchasing and this add cost to your Investment in Gold ETF.
Sovereign Gold Bonds:
Sovereign Gold Bonds are the bonds issued by RBI (Reserve Bank of India) on behalf of the Government of India with an assured Interest of 2.5% PA. The investor can invest in a maximum of 4 KG and the Tenure of these bonds starts from 5 years to 8 years. These bonds are considered the safest gold investment. No risk of handling physical gold in this Investment and these bonds are having an assurance of the government of India.
Gold Futures and Options:
Gold Futures and Options are the major types of Gold derivatives traded in a commodity market. These are contracts signed by two parties for trading Gold at a predetermined price on a later date.
In Gold futures buy or sell a given amount of gold, on a particular date in the future. Futures are traded in contracts, not shares, and represent a predetermined amount of gold.
In Gold Options on futures are an alternative to buying a futures contract. These give the owner of the option the right to buy the futures contract within a certain time frame, at a present price. One benefit of an option is that it both leverages your original investment and limits losses to the price paid.
Gold Mutual Funds:
Gold Mutual funds are invested in Gold ETF, Sovereign Gold Bonds, and Gold Mining companies. Here mutual fund companies invest and manage the funds of Investors and charge an expense ratio.
Top 5 Gold Fund Schemes:
1. Kotak Gold Fund:
Fund size : Rs. 715 Cr
1 Yr Return : 30.70% PA
3 Yrs Returns : 18.12% PA
5 Yrs Returns : 13.2% PA
10 Yrs Returns : NA
NAV as on 15-Oct-2020 : Rs. 21.72
Expense Ratio : 0.15 %
2. SBI Gold Fund:
Fund size : Rs. 822 Cr
1 Yr Return : 31.89% PA
3 Yrs Returns : 18.59% PA
5 Yrs Returns : 12.82% PA
10 Yrs Returns : NA
NAV as on 15-Oct-2020 : Rs. 16.32
Expense Ratio : 0.12%
3. HDFC Gold Fund:
Fund size : Rs. 938 Cr
1 Yr Return : 32.52% PA
3 Yrs Returns : 18.37% PA
5 Yrs Returns : 12.75% PA
10 Yrs Returns : NA
NAV as on 15-Oct-2020 : Rs. 16.76
Expense Ratio : 0.1%
4. Nippon India Gold Fund:
Fund size : Rs. 1,264 Cr
1 Yr Return : 31.73% PA
3 Yrs Returns : 17.93% PA
5 Yrs Returns : 12.56% PA
10 Yrs Returns : NA
NAV as on 15-Oct-2020 : Rs. 21.6
Expense Ratio : 0.1%
5. Axis Gold Fund:
Fund size : Rs. 191 Cr
1 Yr Return : 31.2% PA
3 Yrs Returns : 18.72% PA
5 Yrs Returns : 12.63% PA
10 Yrs Returns : NA
NAV as on 15-Oct-2020 : Rs. 16.78
Expense Ratio : 0.17%
Disclaimer: All the above informationis for educational purposes only, and the Gold fund’s shown are not considered as recommendations as the above data might vary from actuals in the period. kindly read the scheme and policy-related documents carefully before investing in any Gold funds and visit the official website for more information.
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