List of Gold Mutual Funds in India
Mutual Funds are the funds which invests primarily in gold mining and gold production companies. Gold is not bought directly but the investment is done on the stocks of these companies.
They are open ended Fund of Fund Schemes which are invested in companies that is involved in mining, distribution or processing of gold or any other precious metals such as platinum or silver. The merit of this fund is that when gold prices increases their profit increases more than proportionately. This would result in very high yields in this kind of funds.
Now, the down side of this fund is that since most of these gold mining companies are based outside the country the profits are calculated basis foreign currencies such as dollars. Now with the recent drop in the value of the dollar in the last 3 – 4 months there would be a huge dent in the earnings of such funds.
These funds also do not enjoy the tax relaxation that most equity funds do. They are taxed at 10% for long term gains and short term gains are taxed per slab rates as relevant to the investor.
- Tocqueville Gold: Its objectives is long term capital gain and 80% of its net assets a nd investment funds are invested in gold and other precious metals and securities of gold mining foreign companies .
- Vanguard Precious Metals and Mining:- This fund should be looked at as a long term investment. It primarily invests in companies that deal with mining of precious metals although it is not an entirely gold fund. Returns may vary and may be added as a part of a portfolio with diversified funds.
- ING Global Natural Resources A: - This fund primarily invests in companies dealing in natural resources such as gas, oil, precious metals, etc. around the world.
- Franklin Gold and Precious Metals A: - The fund predominantly invests about 80% of its net assets in companies that mine precious metals such as gold, platinum, silver and palladium.
- Fidelity Select Gold: - Its main objective is capital appreciation. The fund is primarily invested in companies engaged in exploring, mining, and distribution or processing of precious metals such as gold, platinum etc.
- Evergreen Precious Metals A: - This Fund’s main objective is to gain long-term growth and protect the capital.
- DWS Gold & Precious Metals S: - This Fund’s main objective is to gain maximum returns. The investment strategy is to put up 80% of the value in stocks of companies engaged in mining, exploration, distribution and fabrication of gold and other precious metals. The remaining asset is invested directly in gold coins or bullion. There Is no capital gain in this form. The returns are on selling the gold coins and bullion.
- River Source Precious Metals & Mining A: - Its objective is long term capital growth. 50% of the net assets are invested in companies abroad giving it a lot of exposure to international markets. Companies are predominantly engaged in exploration, fabrication, processing and mining of precious metals.
- OCM Gold: - This fund seeks long term capital growth. Mostly invested in stocks of companies involved in gold mining, this fund is meant for investors who are willing to take the risk and volatility of the fluctuations which comes with the investments in gold and gold shares.
These are a few of the Gold Mutual Funds available in the market and all of them are funds which are invested in stocks of companies which primarily deal in exploration, mining, processing , fabrication and distribution of gold or other precious metals. The objective is mainly long-term capital appreciation and is meant for investors willing to take the risks and volatility which exists in investments in gold and gold shares.
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