Jan 01, 1970 3 min read

This Dhanteras Buy Gold Mutual Fund Instead of Jewellery

Make this Dhanteras even more special by taking a better investment decision of investing in gold funds. Read this blog to know why.

As the auspicious occasion of Dhanteras is round the corner, all of us have plans to buy something special on that day. In India, it is a ritual to buy gold on the day of Dhanteras which is kept in the Diwali Pujan. Buying precious metals like Gold on this festival is believed to be a good sign to bring prosperity for the rest of the year. We are sure you must have decided to buy some jewellery item for yourself as well. But, we have some other recommendation for you, and that is Gold Mutual Fund.

The tradition of buying gold during Diwali has continued over thousands of years and for all the right reasons. Along with prosperity, this yellow metal has its value in the market which yields considerable returns over a long-term duration. It is proved to be one of the most essential financial securities during hard times and hence it is very popular amongst the masses.

People splurge on gold jewellery on this occasion by convincing themselves that they are investing rather than spending since the ornaments’ value probably increases with the passage of time. Although the justification isn’t wrong, it lacks some important considerations. Buying gold jewellery should never be confused with gold investments because of making charges included in its value. At the time of resale, around six to fourteen percent of the cost is irrecoverable which might result in a loss from the point of return on investment.

Some people find gold coins and bars as an alternative, but they also come with a premium amount of around five to fifteen percent, which is again irrecoverable at the time of sale. Hence, we need to find some better option which could help us gain the dual benefit of purchasing gold on Dhanteras to follow the tradition and achieving better earnings at the time of sale, i.e., return on investment of gold. The best alternative for this is “Gold Exchange Traded Funds(ETF)” or the “Gold Funds”.

In order to make an actual investment in gold, the gold ETFs and Gold Funds are considered to be the best options nowadays. Gold ETFs are the mutual fund programmes that invest in physical gold. Each unit of a gold ETF is equivalent to 1 unit (or in some cases 0.5 units) of gold. Accordingly, investors in gold ETFs need not bear any making charges associated with the physical gold.

Furthermore, these ETFs are traded on the stock exchange at the prevailing market prices of gold, according to which investors get the opportunity to buy or sell their holdings at prices close to the market prices. Thence, they need not pay any premium amount or sell their securities at a discount, and suffer a loss. There are various gold mutual funds offered by prominent fund houses which can be added to the investment portfolio this Dhanteras to earn considerable returns. Some of them are:

  • Kotak Gold Fund (G)
  • SBI Gold Fund (G)
  • DSP BlackRock World Gold Fund (G)
  • L&T India Equity and Gold Fund (G)
  • Kotak World Gold Fund- Standard Plan (G)

Gold is considered to be one of the safest haven assets, which makes it a productive portfolio diversifier. Hence, we suggest you must have around 10-15 percent of investments in the gold. Moreover, some other important considerations like liquidity, easy availability, etc., are other aspects which are considered to be taken into account while making an investment. And, the scheme mentioned above adhere to all the requirements.

Therefore, we have a strong recommendation that instead of going to shop gold jewellery, make a productive investment in the gold mutual fund this Dhanteras to enlighten your investment portfolio and make a bright future ahead. If you need any advisory services, we, at MySIPonline.com, are always ready to help. You must get associated with us to take a remarkable investment plan.

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