Is this the Best Time to Invest in Gold Funds?

Most investors are aware that saving is just not enough and one needs to invest correctly. Gold is not just a precious metal for Indians it is also a form of investment. 

 However, owning gold these days in physical form has its own demerits as there is risk of theft, moreover one cannot be sure of its purity. 

As of 2021, investing in Gold funds in India is one of the latest means to invest in gold as an asset without possessing the metal in its physical form. Gold mutual funds are open-ended investments; the units offered depend on the units offered by the gold Exchange Traded Fund. 

Is it worth investing in gold funds in India in 2021?

The fundamental reason for investing in gold funds in 2021 is to create wealth during the investment tenure and diversify the portfolio and minimising the market volatility risk. 

Investors can buy/sell the gold ETF units according to their own convenience. Gold ETFs in India do not have any lock-in periods, thus offering liquidity to an investor’s mutual fund portfolio. Because gold funds in India can be owned and traded in digital format, this keeps them safe from theft and also provides security to the investor.

Taxability

In India, investments in gold mutual funds in India for more than 3 years are regarded as long-term. The LTCG on gold is taxed at a 20% rate while short-term capital gains (STCG) are taxed at the appropriate the slab rate applicable to the investor.

Who should invest?

In India, Gold funds are an excellent way to diversify one’s portfolios; thus helps to minimise the downside risk  

As of 2021, with reference to gold funds in India, one should remember that gold is not just another investment. Gold funds in India can also be used as risk reducing portfolio diversifier against economic shocks because of its negative corelation with other asset class. Many individuals diversify their investment portfolio investing a part in gold funds to diversify portfolio investments from the fluctuating market. However, investing large sums even in the best gold funds in India to avoid fluctuations may not be a wise move. In fact, it could be counterproductive. 

Ultimately, one should invest according to one’s financial goals with the help of a good financial advisor.

Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.