I want to invest in gold. But I want to avoid buying physical gold or opening a demat account. How will the fund of fund option be? Which funds would you recommend? I also want to know if the gold fund’s NAV will change in the same ratio as the price of gold.
-Ankur
Yes, a gold fund’s NAV is directly related to the price of gold and will see the same kind of ups and downs. If you don’t want to open a demat account or buy physical gold, then a gold fund of fund is the only option you have. There isn't much of a difference between gold funds and gold ETFs, because they have a similar operating methodology. However, a gold fund of fund will be 0.5 per cent costlier than a gold ETF. But at the same time, it is the most convenient way of buying gold.
This article was originally published on September 25, 2012.
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