Gold is the first investment choice of every individual, from ancient times gold has been a symbol of wealth. The continuous increase in the value of gold makes it a most popular addiction to secure your money in the safest place. From physical purchasing of gold to Gold Mutual funds there are many ways through which one can invest in gold. Gold funds are the modern option through which you can invest in Gold without any hassle. In this article, you will get to know about gold funds and how you can invest in them. Let us get to know about various gold funds.
What are Gold Funds?
Gold funds are a modern way to invest in gold without any hassle of owning and Storing. This is one of the best options for the one who wants to invest in Gold without physically purchasing it. Gold funds give one the facility to invest in gold without buying physical gold like bars or coins. Gold Mutual funds are open investment platforms that give you the advantage of buying an asset without its physical form.
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Different types of Gold Funds
According to investors’ needs and preferences, gold funds are of different types. Each fund comes with different market risks and variations in performance. Based on the risk and investment strategy the price rate of these funds fluctuates.
1) Physical gold-based funds
Physical gold-based funds invest in the actual gold. These funds depend on the physical gold value of the market. Gold price infatuations directly affect the physical world-based funds.
2) Gold mining funds
There are some companies that are involved in the extraction, procession, and production of gold, the Gold mining funds are influenced by these companies. The success of these mining companies directly affects the Gold mining funds. The profit rates are relatively higher in Gold mining funds, and investors also get exposure to Gold mines.
3) Gold exchange-traded funds
Gold exchange-traded funds are for those who want the flexibility of the stock market along with gold exposure.
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How are Gold Mutual Funds helpful?
Earning physical gold coins and bars is one of the easiest and oldest methods to invest in gold. Gold has always been the first choice of every individual to invest. Now as the world is changing there are ways through which we can invest in Gold without even buying it physically and cancel it at the higher prices when we get the appropriate value. The gold funds make the investors invest in gold with the help of professionals, who wisely choose gold-related investments.
Tax rate of gold funds
The tax on gold mutual funds is equal to the tax imposed on gold jewelry. It also depends on the type of investment you are making. If the investment and redemption is within three years it is a short-term investment. In this case, the profit is added to the gross income of the investor and then the tax is calculated. If the investment is of more than 3 years then it is a long-term investment and 20% of tax will be charged.
How can one buy and sell gold funds
Just like share investors can buy and sell the gold funds. At the real-time prices investors can do the trading, for this, they just need their brokerage account. From the asset Management Company investors can also purchase the gold funds.
Who can invest in Gold funds?
Gold funds are for those who want investment in lower risk. The process is examined by SEBI, which lowers the risk of investment. Investors who don’t want to pay higher taxes can invest money in gold funds. TDS is not charged in this investment of gold fund.
Benefits of gold funds
Investors get a varied range of advantages from gold. From affordability to convenience investing in Gold funds has become the first choice of today’s generation. Given below are some of the benefits of investing in gold funds:
Physical stores are not necessary
There is no need for bank lockers or safes if you are investing in Gold funds. The risk of damage or theft is reduced by Gold funds. The professional vaulting services offered by almost all physical gold dealers will also be exempted.
Easy In Trading
In comparison to physical gold the gold funds are easily tradeable. During the trading hours, the investors can easily buy and sell gold funds on the stock market. Investors can immediately sell their gold funds whenever they need the money on the stock exchange.
Investors can start with a low investment
In physical gold, it is needed to make a significant investment. The particular Minimum investment in physical gold is needed but investors can buy gold funds with a very small amount. It is very easy for beginners to invest in Gold funds.
Tracking the value of a gold fund is very easy
Investors can track 24/7 the value of their holdings. The online portals help investors to track their gold and sell them whenever they feel they are getting more profits.
Investment with lesser risk
Gold funds are managed by aise companies so the chances are low. Investors can invest through them.
What are the risks of investing in gold mutual funds?
There are various advantages in investing in gold funds but there are also some market risks in investing in gold funds. The prices of gold are affected by global economic conditions, currency fluctuations, interest rates, and other factors. It is also affected by the demand for gold in the market.
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Conclusion
Investment in a gold fund is the most convenient and easy method for those who want a perfect platform to secure their money. There are various advantages and some disadvantages of investing in Gold funds. Investors are requested to read all the terms and conditions before investing their money in good funds.