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A Golden Boon

Reliance Gold Savings fund is a boon for investors who don't have a demat account to invest in gold ETFs…

I want to invest Rs 1 lakh in Reliance Gold Savings fund for the next 5-10 year. Is it the right approach?
- Rahul Sanghal

At current levels, there can be some apprehensions about investing in gold. However, Reliance Gold Savings fund is a boon for investors who do not have a demat account and wish to invest in a gold ETF. This is 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. It is because of such a structure that the fund is able to offer the convenient SIP route to investors. You should consider investing through SIPs in this fund than in lump sum. Also, make sure investment in this fund does not exceed beyond 10 per cent of your allocation.

However, this fund has a recurring expense that adds up to 1.5 per cent; 1 per cent in Reliance Gold ETF and 0.5 per cent in Reliance Gold Savings Fund that you need to know of. This is the cost of convenience that one will pay when investing in this fund instead of paying annual maintenance charges for a demat account , delivery brokerages charges, transaction charges incurred for investing through the dematerialized mode.

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