What are the benefits of investing in gold mutual funds?

If you want to invest in gold as an asset without having to buy gold in physical form, you should consider investing in a gold fund. Gold funds invest in syndications dealing with gold, gold mining and gold producing companies along with physical gold and gold ETFs. Thanks to gold funds, you can now purchase gold in digital format.

Since a gold fund depends on the value of physical gold, its performance varies depending on the rise and fall of international gold prices. A gold fund can act as an exceptional asset to diversify an investor’s mutual fund portfolio. Depending on their risk appetite, they should consider investing in gold. During fluctuating markets, a gold fund can act as a protection as its performance may not depend on equity markets.

A gold fund investment may not only act as a cushion during volatile market conditions, but also provide capital appreciation in the long run. Those who are seeking investment in gold funds should try and have a long term investment horizon. If you check historically, gold prices have gradually increased over the years. So if you invest today in a gold fund, imagine the potential capital appreciation you may receive 10 years from now. If you are keen on investing in gold but want to save yourself from the hassle of preserving it in physical form, you can consider investing in Axis Gold Fund.

Axis Gold Fund is an open ended fund of fund scheme investing in Axis Gold ETF. The investment objective of Axis Gold Fund is to generate capital appreciation that closely corresponds to capital appreciation generated by Axis Gold ETF.

Benefits of investing in Axis Gold Fund

• Axis Gold Fund investors get an opportunity to invest in Gold ETF without the hassles of storage or concerns on quality
• Axis Gold Fund Direct Plan has a low expense ratio as compared to Axis Gold Fund Regular Plan
• Axis Gold Fund offers transparent pricing based on international gold price movements subject to tracking error
• Invest in any amount subject to minimum investment requirements
• No transaction charges on buying and selling as compared to physical gold other then the Annual recurring expenses incurred by the Scheme
• You do not need a demat account to invest in Axis Gold Fund

Risk profile of Axis Gold Fund

The scheme carries risks associated with investing in Axis Gold ETF and money market instruments. Investment in units of Gold ETFs involves investment risks such as market risks, listing related risks and risk related to redemption. Investments in money market instruments are subject to interest rate risk, reinvestment risk, liquidity risk, credit risk, settlement risk, etc. Also, the value of the scheme’s investments may be affected by currency exchange rates, changes in law/policies of the government, taxation laws and political, economic or other developments.

Exit load on Axis Gold Fund

An exit load of 1 percent will be levied if the investor redeems/switched out within 1 year from date of allotment. No exit load will be charged for switching between Existing Plan and Direct Plan where the transaction is not routed through Distributor in the Existing plan through Mutual fund app. If the transaction in Existing Plan is routed through Distributor, then applicable exit load will be charged for switching from Existing Plan to Direct Plan. Further for switches between the Growth and IDCW Option and on the Units allotted on reinvestment of IDCW no load will be charged by the scheme.

Invest in Axis Gold Fund through SIP or Lumpsum

There are two ways to make an investment in Axis Gold Fund – you can make a lump sum investment or you can opt for a Systematic Investment Plan (SIP). If you are making a lump sum investment, the minimum investment requirement is Rs. 5000. This amount needs to be paid right at the beginning of the investment cycle. Investors will be allotted units in accordance with the investment amount and depending on the fund’s existing net asset value (NAV).

A Systematic Investment Plan on the other hand is an easy and convenient way to invest in Axis Gold Fund. An investor can start investing in Axis Gold Fund with a minimum investment amount of Rs. 1000 per month. One does not need to have large capital in hand to start a SIP investment. They can invest in the fund with small amounts, amounts that they are comfortable with. All an investor has to do is complete a one time mandate with their bank, following which every month on a fixed date, a predetermined amount will be debited from their savings account and electronically transferred to their Axis Gold Fund. Investors can even modify their SIP amount depending on the performance of the fund.

If you have an emotional attachment with gold and are keen on investing in this commodity, you do not have to buy it in physical form. With Axis Gold Fund, you can purchase gold in digital form and reap the same benefits that you would have if you manually purchased the precious metal. However, the scheme is suitable for investors who carry a moderately high risk appetite. So make sure that you only invest if your investment objective aligns with that of the scheme and if your risk appetite allows you to do so.

Note: Investors will be bearing the recurring expenses of the scheme, in addition to the expenses of the schemes, in which Fund of Funds schemes make investments.

Axis Gold Fund
An open ended fund of fund scheme investing in Axis Gold ETF

Axis Gold ETF
An open ended scheme replicating/tracking Domestic Price of Gold

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.