Want to invest in gold through mutual funds? Here are the options after Gold FoF curbs
Several mutual fund houses have temporarily stopped accepting fresh investments into gold fund-of-funds (FoFs), leaving investors wondering whether they can continue investing through existing SIPs and what alternatives are available. Here is what investors can do, as reported by ETBureau.
Mutual fund houses have temporarily halted the acceptance of fresh investments into gold fund-of-funds (FoFs), leaving investors uncertain about their options. These funds invest in gold exchange-traded funds (ETFs), providing exposure to gold prices. While investors can continue investing in existing SIPs and existing Gold FoF units, new lump-sum investments, SIP registrations, and switch-ins have been restricted in several schemes since mid-October.
Industry experts suggest the move could be due to growing gold imports and substantial inflows into gold investment products.
Gold FoFs are mutual funds that invest in gold ETFs, allowing retail investors to gain exposure to gold without needing a demat account. Investors can buy and redeem units like any other mutual fund scheme, with the value generally moving in line with gold prices. However, there are alternatives for those seeking to invest in gold through market-linked investments.
Gold ETFs are one of the closest alternatives, as they can be bought and sold on stock exchanges during market hours. They typically have lower costs since investors only bear the ETF's expense ratio. Unlike Gold FoFs, which are purchased and redeemed at the day's closing net asset value (NAV), like regular mutual funds, Gold ETFs offer more flexibility in terms of buying and selling.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
