InvestorQ : Can you tell me what a gold fund is?
Neha Sharma made post

Can you tell me what a gold fund is?

4 years ago

This is a very important question, given that we Indians love our gold. Not only is it a conventional investment option, gold is also a great hedging instrument that offers stability during times of crisis.


Gold funds are means of investing in the precious metal electronically. Currently, you can invest in gold via gold funds and gold exchange traded funds (ETFs).


Gold funds are mutual fund schemes that invest in gold ETFs, gold bullion or gold-producing companies. It is very simple to invest in a gold fund as it doesn’t require a demat account A gold fund doesn’t directly invest in physical gold. It, however, takes the same position indirectly, by investing in gold ETFs.


Like in a mutual fund, a gold fund also has a fund manager and if the manager invests predominantly in bullion, or in stock and bonds of gold manufacturers and miners, then the price of the gold fund will correlate to the metal’s spot price.