Benefits of Investing In Gold Funds
The gold fund in India is one of the most interesting and new ways to invest. They are all the more interesting because you do not have to hold the gold in physical form. These are open-ended funds that invest in the units of Gold Exchange Traded Funds. These funds aim to create wealth through the potential of gold as a commodity. It is suitable for those investors who want to be exposed to gold as a mode of investment. Let us look at the benefits of investing in the gold funds.
- You can invest through SIPs - It is well-known that Systematic Investment Plans are one of the best ways to invest. Gold funds allow you to invest through the mode of SIPs. This would not have been possible if you were trying to invest in gold ETFs. Investing through SIPs is very simple and you can invest regularly without taking into consideration the exact stock figures, i.e., the gold price.
- Liquidity - One of the main reasons why people invest in gold funds is liquidity. This is because they are listed on stock exchanges. However, it would help if you keep in mind that gold funds charge some exit load. This means that you cannot take out the capital at any moment. If you decide to withdraw the capital before a specified time, you would need to pay a certain percentage of the fund, which is usually too low to worry you. These funds can be redeemed by selling them back to the fund house.
- The mode of investment - While Gold Exchange Trade Funds need you to hold a Demat account like stocks, this is not the case of a gold fund in India. Gold funds are very similar to other mutual funds. You do not need to have a Demat account in order to invest in mutual funds. These gold funds can be bought from the respective fund houses without the need to register for a Demat account.
- Secure investment - The benefit of a gold fund in India is that you do not need to worry about theft of the physical entity. You are not taking possession of the gold. Also, you do not have to pay hefty fees for making jewellery or storing them in a bank locker. All of these hassles are not present with these gold funds. You need not worry about physical entities.
- Safe asset - Gold prices do not fluctuate too much. Even if you suffer huge losses from your equity investments or other funds, your gold investments can save you from major losses.
- Diversification - Another important reason for investing in the gold funds is to diversify your portfolio. Diversification can help to attain stability in unstable market conditions. It will reduce risk factors and improve profits.
Enjoy these unique benefits of investing in gold funds and build your future hassle-free.