I wish to invest in gold and am confused about which fund to invest in. Does change in gold prices impact the NAV of DSPBR World Gold Fund and AIG World Gold Fund?
- Ravi Srinivas
There are few options available to invest in gold these days. First, the gold exchange traded fund (ETF), which tracks the value of gold by investing in physical gold. Second, there are funds that invest in companies in gold mining and related businesses through other overseas funds. DSPBR World Gold Fund and AIG World Gold Fund fall in this category. Last, the recently launched Reliance gold savings fund, a passively managed fund of fund that invests in the open-ended Reliance Gold Exchange Traded Fund, which in turn invests in physical gold with 99.5 per cent purity.
There is no direct correlation between the gold prices and the NAVs of DSPBR World Gold Fund and AIG World Gold Fund, but generally the share prices of these companies tend to benefit from the rise in gold prices. Invest in gold to diversify your portfolio and allocate up to 5 per cent of your holdings to it and no more.
This article was originally published on March 03, 2011.
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