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Allocating To Gold

Consider allocating 5-10 per cent to a gold fund if you already have a diversified fund portfolio…

I want to invest in a gold mutual fund. However I am confused on which gold fund to invest in for the next 8-10 years. My monthly salary is Rs 35000, how much of it should I invest in gold?
- J Barick

If you have already have a well diversified mutual fund portfolio, you can consider allocating 5-10 per cent of your investments in gold. There are a few options available when it comes to investing in gold. You can consider investments in funds that invest in gold mining funds such as AIG World Gold and DSPBR World Gold Fund. Then, you have the popular gold ETFs that are listed on the major stock exchanges that one can buy and sell, just like you do with shares. As these funds invest in physical gold, they are closest to investing in physical gold at no risk of holding physical gold. And, more recently, there is an option to invest in a gold fund of fund, such as Reliance Gold Savings fund, which 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. The advantage of this fund is that one does not need to have a demat account when investing in it and one can do so through a SIP. You can select any of the options depending on your convenience and investment needs.

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