logo
Up 29% in 5 months! Should you invest or avoid gold mutual funds?

Up 29% in 5 months! Should you invest or avoid gold mutual funds?

Time of India20-06-2025
Gold
based funds and ETFs together have offered an average return of 29.11% in the current calendar year so far. There were around 32 funds including both gold funds and gold ETFs in the said time period.
LIC MF
Gold ETF
FoF offered the highest return of around 30.14% in the current calendar year so far, followed by
UTI Gold ETF
which gave 29.75% return in the same period.SBI Gold
ETF
gave 29.37% return in the same period.
Zerodha Gold ETF
delivered a return of 29.28% in the said time period.
Play Video
Pause
Skip Backward
Skip Forward
Unmute
Current Time
0:00
/
Duration
0:00
Loaded
:
0%
0:00
Stream Type
LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
1x
Playback Rate
Chapters
Chapters
Descriptions
descriptions off
, selected
Captions
captions settings
, opens captions settings dialog
captions off
, selected
Audio Track
default
, selected
Picture-in-Picture
Fullscreen
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text
Color
White
Black
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Text Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Transparent
Caption Area Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Transparent
Semi-Transparent
Opaque
Font Size
50%
75%
100%
125%
150%
175%
200%
300%
400%
Text Edge Style
None
Raised
Depressed
Uniform
Drop shadow
Font Family
Proportional Sans-Serif
Monospace Sans-Serif
Proportional Serif
Monospace Serif
Casual
Script
Small Caps
Reset
restore all settings to the default values
Done
Close Modal Dialog
End of dialog window.
Best MF to invest
Looking for the best mutual funds to invest? Here are our recommendations.
View
Details
»
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Most Cat Parents Miss This About Their Aging Cats
Dr. Marty
Click Here
Undo
Also Read |
ITC and Cochin Shipyard among stocks that Quant Mid Cap Fund bought and sold in May
Invesco India Gold ETF FoF and Groww Gold ETF FOF gave 28.34% and 28.14% returns respectively in the current calendar year so far.
Experts attribute this surge to a combination of global economic and geopolitical factors such as geopolitical uncertainty and central bank buying.
Live Events
'Gold prices have rallied in recent times due to a combination of global economic and geopolitical factors such as rising tensions globally, such as conflicts in the Middle East, and Trump tariffs, have increased demand for gold as a safe-haven asset and several countries, including China and India, have been aggressively adding gold to their reserves to diversify away from the US dollar and enhance financial security,' Shweta Rajani, Head -
Mutual Funds
, Anand Rathi Wealth Limited shared with ETMutualFunds.
The expert further shared country wise gold purchases over the years and mentioned that with India seeing a huge jump to 72.6 tonnes of gold in 2024, the highest annual purchase in this three-year period and a 347% increase from 2023 and this sharp rise indicates a strategic focus on gold as a reserve asset, aligning with global trends of de-dollarization and building resilience due to the geopolitical and economic uncertainties.
Echoing a similar opinion, another expert mentions that fresh investments should be made cautiously. 'Gold has rallied due to rising global geopolitical tensions and increased central bank buying early in the year. While it has given strong YTD returns, fresh investments should be made cautiously, as much of the rally may already be priced in,' Shruti Jain, Chief Strategy Officer, Arihant Capital Markets told ETMutuaFunds.
Quant Mutual Fund, in a recent note, highlighted that gold may be due for a short-term correction of 12-15% in dollar terms over the next two months. The fund house cautioned investors that the metal may have "peaked out" in the short term, noting that while
gold prices
have surged recently, the momentum could slow down, and a retracement in prices could be on the horizon.
While commenting on whether one should increase their gold investment or wait for further correction, Jain advises that after this steep run-up, it's better to wait for a dip before adding more and gold should ideally make up 3–5% of the total portfolio as a diversification and risk-hedging tool.
On the other hand, Shweta Rajani suggests investors to maintain a balanced portfolio, with an asset allocation of 80:20 in equity to debt but if one wants exposure to gold, it should not exceed 5-10% of their portfolio.
Also Read |
Eternal and Vedanta among stocks which Edelweiss Mutual Fund bought and sold in May
'Gold should be treated as a defence asset, with maximum exposure at 20%. Combined allocation to gold and debt should not exceed 20% of the overall portfolio to maintain growth potential,' she added.
Amid safe-haven buying triggered by Israel-Iran tensions and weakness in the dollar index, gold August futures contracts on the MCX opened sharply higher by Rs 2,011 or 2.04%, crossing the Rs 1 lakh mark to trade at Rs 1,00,403 per 10 grams on last Friday, according to a report by ETMarkets
By attributing the recent gold rally to mainly driven by demand and supply, not underlying fundamental metrics, the expert from Anand Rathi Wealth mentions that investing in Gold through SIP is not the best option for investors. They would generate a better return investing in equity mutual funds.
She further shared that if an investor does an SIP in Gold ETFs and another investor does an SIP in 5 diversified equity mutual funds, the XIRR return for gold is 12.53%, whereas for an equity mutual fund portfolio, it is almost 15%.
Sharing a different opinion, Jain mentions that the rally is largely driven by geopolitical tensions and global factors, including safe-haven demand and foreign central bank purchases and having gold in your portfolio is always a good idea because it adds diversification and additionally it's also a good idea to invest via SIP to spread out your entry and manage risk.
In the last one year, gold based funds have offered up to 38.16% returns with an average return of around 37.16%. Tata Gold ETF offered the highest return of around 38.16% in the last one year, followed by UTI Gold ETF which gave 38.09% return in the same period.
Zerodha Gold ETF offered a 37.69% return in the last one year. Invesco India Gold ETF FoF gave the lowest return of around 35.61% in the last one year period.
Post looking at the last one year performance and current rally, Jain shared that Gold may face some pressure if geopolitical tensions subside and also there is news on selling by China. 'Expect it to trade in a range, and avoid aggressive buying at current highs,' she adds.
'Gold ETF holdings have declined in May 2025 to 930 tonnes compared to April 2025. However, the expectation is that the investors will continue to invest in yellow metal for portfolio diversification,' according to commodity communique by Tata Mutual Fund.
Also Read |
Deepak Shenoy's Capitalmind Mutual Fund files its first draft document with Sebi for a flexi cap fund
After analysing the different probabilities of CAGR of Nifty vs. Gold over different time frames, Shweta Rajani firmly says that Gold's ability to deliver high long-term returns significantly declines over time and the chance of earning over 12% CAGR from gold is just 0.58% over 10 years and drops to 0% over 15 years and despite similar volatility to equity, its long-term upside is limited, making it less rewarding on a risk-adjusted basis.
'When considering long-term wealth creation, Nifty maintains a much stronger probability of beating inflation and compounding wealth versus Gold, which have a higher standard deviation and lower risk adjusted return potential. As mentioned, gold is a defence asset like debt. Hence, the total allocation to gold and debt in your portfolio should not exceed 20%,' Shweta Rajani said.
Gold is considered a hedge against inflation and with global economic conditions remaining uncertain, gold is expected to retain its appeal as a hedge against market instability.
Gold ETFs are exchange-traded funds that track the price of physical gold. Each unit of a Gold ETF is backed by a specific quantity of gold, usually equivalent to one gram. They are listed on stock exchanges, and you need a demat and trading account to buy and sell them.
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on
ETMFqueries@timesinternet.in
alongwith your age, risk profile, and Twitter handle.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

What is US citizenship test? What changes Trump administration is bringing to make it tougher
What is US citizenship test? What changes Trump administration is bringing to make it tougher

Time of India

time22 minutes ago

  • Time of India

What is US citizenship test? What changes Trump administration is bringing to make it tougher

USCIS new director said the present US citizenship is easy and can be memorized. The US citizenship test, officially known as the Naturalization test, is an examination that an applicant has to take to become a naturalized American citizen. This test is not for green card holders unless they are applying for citizenship. The new director of the United States Citizenship and Immigration Service said the existing test is too easy and the answers can be memorized. The Donald Trump administration is planning to bring back the 2020 version of the test. US Citizenship test First, the applicants have to submit Form N-400 seeking for naturalization. They need to pass a background check and meet residency and other requirements. Then there have to attend an interview where they take two tests: English and a civic test. In the civic test, there are 100 questions; the officer asks the applicant 10 and the applicant must answer at least six correctly. During the first term of Donald Trump, there was a new rule for a very brief time where there are 128 questions; applicants are asked 20 and they must get at least 12 right. The USCIS is planning to bring back some version of this type of test. Before 2008, the test was random but the Bush administration introduced the 6 out of 10 questions benchmark. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Angola: New Senior Homes (Prices May Surprise You) Senior Apartments | Search Ads Search Now Undo USCIS director said the present version is not really "comforting with the spirit of the law". Sweeping H-1B changes The development regarding the US citizenship test comes as the Department of Homeland Security proposed sweeping changes for the H-1B visa program that allows US companies to hire foreign workers. According to the proposed changes, H-1B will not be for entry-level workers. It will be only for high-skilled jobs for which there will higher salary. If this becomes implemented, US graduates will not lose out jobs in the entry level and tech companies will not be able to hire foreign workers at a lower wage.

Virgo Daily Horoscope Today, July 27, 2025: Your warm energy uplifts every soul
Virgo Daily Horoscope Today, July 27, 2025: Your warm energy uplifts every soul

Time of India

time31 minutes ago

  • Time of India

Virgo Daily Horoscope Today, July 27, 2025: Your warm energy uplifts every soul

Today is a reminder that your very presence brings light to those around you. Your quiet strength and thoughtful actions can bring comfort to many. Even if you do not feel your best, others find peace in your calm energy. Do not hide your warmth. Share it freely, not through big gestures but through simple, sincere moments. You are more valuable than you realise. Trust that what you offer, even silently, makes a difference. Let your presence today be a gentle blessing to all. Virgo Love Horoscope Today In love, your calm and nurturing energy is your biggest gift. If you are in a relationship, your partner will feel safer and closer when you simply listen or offer support. Do not overthink every detail. Your gentle nature is enough. If you are single, someone may be noticing your peaceful presence from a distance. Let your natural self-speak. You do not need to chase love. When your heart is open and steady, the right kind of love will find you with ease. Virgo Career Horoscope Today In your work life, today is best for steady, focused efforts. Avoid rushing or comparing yourself to others. Your consistent and honest work is already creating a good image. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Most Beautiful Women In The World Undo A co-worker may need your help or guidance. Offer it without expecting anything back. Those in service-based fields will find extra satisfaction today. Your attention to detail will be noticed, even if no one says it aloud. Stay grounded. Success is not only about reaching the top but about how you lift others on the way. Virgo Money Horoscope Today Financially, it is a good day to manage your resources with calm thinking. Avoid flashy or unnecessary expenses. You may get tempted by a new item or investment, but ask yourself if it truly adds value to your life. Instead, focus on creating a peaceful financial routine. Saving little by little, avoiding waste, and tracking your spending will lead to long-term stability. Your peace of mind today is more important than short-term enjoyment. A simple life is a wealthy life when handled wisely. Virgo Health Horoscope Today Health may be mostly balanced, but you should still take time for self-care. Your stomach or digestion may feel sensitive if you eat too quickly or while distracted. Sit peacefully during meals and avoid cold or heavy foods. Light stretching and fresh air will boost your energy. If you are feeling emotionally low, talk to someone close or write in a journal. Your inner calm supports your health. Remember, your well-being is strengthened not just by medicine but also by love and presence. Discover everything about astrology at Times of India , including daily horoscopes for Aries , Taurus , Gemini , Cancer , Leo , Virgo , Libra , Scorpio , Sagittarius , Capricorn , Aquarius , and Pisces . Read your detailed Horoscope Today and Horoscope Tomorrow here.

What is Barron Trump's NYU Stern tuition cost? For the Trumps, just a drop in a $6 billion ocean
What is Barron Trump's NYU Stern tuition cost? For the Trumps, just a drop in a $6 billion ocean

Hindustan Times

timean hour ago

  • Hindustan Times

What is Barron Trump's NYU Stern tuition cost? For the Trumps, just a drop in a $6 billion ocean

Since enrolling at New York University last fall, Barron Trump has found himself under a curious kind of spotlight. Being the youngest child of Donald Trump, his every move draws attention. Barron Trump, now a student at NYU's Stern School, faces a unique college experience due to his father's wealth and constant Secret Service presence. (AP Photo/Marta Lavandier)(AP) Donald Trump recently spoke with the Daily Mail about Barron's college decision. He shared that his son had options, but they chose the Stern School of Business at NYU. 'He's a very smart guy, and he'll be going to Stern, the business school, which is a great school at N.Y.U.,' Trump said. 'I went to Wharton, and that was certainly one that we were considering. We didn't do that. We went for Stern,' he added. ALSO READ| Barron Trump and Sasha Obama: Are the dating rumors true? 'We liked NYU. I've known NYU for a long time, it's one of the highest-rated,' Trump said, referring to the QS Global MBA Rankings 2025, which placed Stern 11th in the U.S. and 17th globally. In front of Trump's net worth, Barron's tuition fees is just a footnote There was a 25 per cent acceptance rate for the MBA Class of 2026, and only 352 students went full-time. Just the tuition will set you back $86,916, and when you add in the costs of books, housing, etc., the price is well over $100,000 the first year, per the Stern MBA website. While many students rely on scholarships to manage the steep fees, Barron won't need one. Thanks to Trump's estimated net worth of over $6 billion, which has fluctuated dramatically over the past year, from $2.5 billion in early 2024 to a post-election high of $6.5 billion. Classmates describe Barron as an 'oddity,' largely due to the Secret Service presence that surrounds him at all times. One of Barron's friends at Oxbridge Academy told The Daily Mail earlier that the youngest Trump does not eat lunch altogether. ALSO READ| NYU professor says Barron Trump 'doesn't belong' as he nears end of first semester 'Barron always went to the lunchroom to sit with his friends, but he never ate any lunch. He never specifically said why, just that he would wait until he got home to eat. It was a little unusual,' the friend shared.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store