Posted On Thursday, Oct 14, 2021
|Table of Contents|
What are Gold Mutual Funds
Gold Mutual Fund vs SBG / Sovereign Gold Bond
Gold Mutual Funds India
Gold Mutual Funds Taxation
All That Glitters – Gold Mutual Funds
Yes, let us learn about Gold Mutual Funds!
After all, why not? It is one of the instruments that allows investors to diversify their investments.
It allows you to invest in Gold as an asset class, without having to actually possess it in its physical form.
So, what actually are Gold Mutual Funds? How do they function?
We are here to tell you more about Gold Mutual Funds meaning.
Gold Mutual Funds:
These allow an investor to take exposure in Gold as an asset class, without holding physical gold.
Gold Mutual Funds are a type of fund of funds that invest in Gold ETF’s which invest in physical gold.
The objective of gold mutual funds is to create potential long term wealth by investing on the potential of gold as a commodity. If you wish to have exposure to gold, this one is for you.
A. Gold mutual funds help investors to invest in gold without holding of it in physical form.
B. Get similar benefits of holding gold physically but also with professional fund management.
Gold Mutual Funds is also invested for diversification to protect against any economic uncertainty because generally Gold has negative correlation with other asset classes.
There are many investors who consider to have 10% to 20% investment into gold funds for diversification which helps to minimise the risk of market volatility.
This makes the gold mutual fund meaning clearer, we hope.
Just like any other investment vehicle, you must now also know about gold mutual fund taxation.
Gold Mutual Fund Taxation:
gold mutual fund taxation depends upon the investment tenure, i.e the period between purchase and redemption.
Tenure Less Than 3 Years: This is considered a short-term investment and the revenue earned is added to the investor’s gross income. Tax is then calculated on the applicable tax slab.
Tenure More Than 3 Years: This is considered as long-term investment. One has to pay 20% along with indexation norms plus CESS over other applicable taxes.
That gives you clarity on gold mutual funds taxation.
Now you should also know that when it comes to gold mutual funds India has to offer, there is one more option you should know about, Sovereign Gold Bonds (SGB).
SGBs are basically government securities, which are issued by the Reserve Bank of India (RBI) and are the substitutes of physical gold. They are denominated in grams of gold.
Here is the major comparison of gold mutual funds vs sgb:
Comparison Table: Gold Mutual Funds vs SGB
|Gold Mutual Funds||SGBs|
|Liquidity||Open ended schemes hence no Lock – in period||Lock-in ends from 5th year|
|Capital Gains Tax||Long Term Capital Gain applicable after 3 years||Long Term Capital Gain applicable after 3 years. However, no capital gains tax if held till maturity|
|Collateralization||Units of Gold fund can be used as a collateral||Can be used as a collateral|
|Exit/Trade||Units of scheme can be redeemed with the mutual fund||Could be traded on exchange. Withdrawal from 5th year|
We think it is now safe to assume that you have the information an investor needs when it comes to gold mutual funds vs sgb.
With all this information in your mind, it is now time you know about gold mutual funds nav as well.
You see, the performance of any mutual fund scheme is denoted by Net Asset Value (NAV). Simply put, NAV is the market value of the securities held by the scheme.
In case of gold mutual funds, fund managers have to make investments in line with the objective of the fund. The returns of a gold mutual fund may closely follow the one of gold ETF.
So, in the case of gold mutual fund nav, the nav could be influenced by the overall price movement of gold in the market. Gold Mutual Fund is a Fund of Fund scheme hence investors bear the scheme expense ratio in addition to the expense ratio of underlying Gold ETF scheme in which Gold Mutual Fund scheme invests in.
We now believe that you are equipped with the information an investor needs if he/she wishes to invest in Gold Mutual funds India has to offer.
When it comes to the gold mutual funds India has in its markets, the investor has many options.
One such gold mutual fund is the Quantum Gold Savings Fund.
It is an open-ended Fund of Fund Scheme investing in Quantum Gold Fund - ETF, where the underlying asset is physical gold.
Here are some reasons for you to consider investing in the Quantum Gold Savings Fund:
1. Helps diversify your money in gold, an important tool for diversification.
2. Enables investments in gold through SIP or STP of as little as Rs. 500/month.
3. Does away with the need to open a demat account as is the case with Gold ETFs.
4. Does not suffer from gold-related problems like storage and theft as the fund house takes care of all risks of storage and safety for a minimal expense ratio.
5. Ensures quality of gold is up to the mark as it invests in Quantum Gold Fund – ETF where the gold is sourced from London Bullion Market Association approved refiners.
For your benefit, here is a glimpse of the funds’ performance.
Performance of the Schemes
|Performance of the Scheme||Direct Plan|
|Quantum Gold Savings Fund - Direct Plan|
|Current Value ₹10,000 Invested at the beginning of a given period|
|Benchmark||Additional Benchmark||Benchmark||Additional Benchmark|
|Period||Scheme Returns (%)||Domestic Price of Gold Returns (%)||CRISIL 10 Year Gilt Index Returns (%)||Scheme (₹)||Domestic Price of Gold Returns (₹)||CRISIL 10 Year Gilt Index (₹)|
|Since Inception (19th May 2011)||6.04%||7.32%||7.22%||18,382||20,820||20,612|
|Sept 30, 2011 to Sept 30, 2021 (10 years)||4.49%||5.77%||7.26%||15,526||17,535||20,160|
|Sept 30, 2014 to Sept 30, 2021 (7 years)||6.67%||8.01%||7.92%||15,718||17,156||17,053|
|Sept 30, 2016 to Sept 30, 2021 (5 years)||6.89%||7.60%||6.17%||13,957||14,429||13,491|
|Sept 28, 2018 to Sept 30, 2021 (3 years)||13.51%||14.60%||9.17%||14,639||15,068||13,020|
|Sept 30, 2020 to Sept 30, 2021 (1 year)||-9.88%||-9.00%||3.88%||9,012||9,100||10,388|
Past performance may or may not be sustained in the future.
Data as of Sept 31, 2021.
Different Plans shall have a different expense structure. Returns are net of total expenses and are calculated on the basis of Compounded Annualized Growth Rate (CAGR). The scheme is managed by Mr. Chirag Mehta and Ms. Ghazal Jain. For other funds managed by Mr. Chirag Mehta, please click here and for other funds managed by Ms. Ghazal Jain, please click here.
To sum up, today we spoke about Gold Mutual Funds India has to offer, Gold mutual funds taxation, Gold Mutual Funds meaning, gold mutual funds vs sgb comparison, gold mutual funds nav etc.
So, if you want to start investing in the Quantum Gold Fund, you can start right here.
|Name of the Scheme||This product is suitable for investors who are seeking*||Risk-o-meter of Scheme||Risk-o-meter of Benchmark|
|Quantum Gold Savings Fund |
An Open Ended Fund of Fund Scheme Investing in Quantum Gold Fund
|• Long term returns|
• Investments in units of Quantum Gold Fund – Exchange Traded Fund whose underlying investments are in physical gold
Investors understand that their principal will be at Moderately High Risk
|Quantum Gold Fund |
An Open Ended Scheme Replicating / Tracking Gold
|• Long term returns|
• Investments in physical gold
Investors understand that their principal will be at Moderately High Risk
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 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 this article 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.
Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.
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