Saturday, December 2


Did you know that India is among the top 3 consumers of Gold in the world? In fact, it is the second-largest consumer of gold. Amazing right? Well, it shouldn’t be shocking. Provided that Indians love to hoard gold, be it any form – gold coins, gold bars, gold jewellery, etc. Now investors are showing interest towards gold funds as well. Advanced technology that allows investors to buy gold funds digitally from the comfort of their home has just added to this traction. You can now buy gold funds through Systematic Investment Plans (SIP) as well. Before you purchase gold units through SIP, let’s understand everything that you might want to familiarize yourself with. Read on to understand better.

Why invest in gold funds?

Though there are several reasons to purchase gold mutual funds, here are top reasons why you must buy gold funds:

  1. Safe and secure – Unlike owning physical gold, Gold funds are held and stored digitally in a DEMAT (dematerialized) account. Thus, it protects an investor from theft
  2. Reduced expenses – The locker charges on safe deposits is something that an individual holding physical gold in banks have to pay. However, with gold funds as the funds are held and managed digitally, one does not need to pay these charges which results in reduced expenses
  3. Hedge against inflation – Gold prices usually do not oscillate too much by a huge margin. As a result, gold funds are a good investment option to protect investors from the negative connotations of inflation and currency risk.
  4. High liquidity – Gold funds are highly liquid – you can trade gold funds on stock exchange at any time
  5. Collateral – Gold funds can be easily used as collateral against loans

Just like any other types of mutual funds, you can invest in gold funds either through systematic approach of SIPs or one-time investment approach through lumpsum mode of investment.

Investing in gold funds through SIP mode of investment

Through systematic and regular investment mode of SIPs, an investor would regular allocate a pre-determined of money towards desired gold fund schemes for a period of time. SIP gold is more convenient and sought investment option for a large number of investors as the investment amount is divided into several small investment amounts. This allows investors to afford these investments. If you buy gold funds via SIP, you can generate wealth in a steady manner.

What are the advantages of investing in gold via SIP?

Gold SIPs inculcate a sense of financial discipline as investors shell out a predetermined sum of amount regularly on a periodic basis. What’s more, as SIP investments are periodic in nature, one does not need to constantly check and be worried about volatility. What this means that SIP investments tend to invest in all market cycles – be it good or bad. As a result, the gold fund units would be averaged out thanks to the concept of rupee cost averaging. There are so many other benefits of investing in gold funds through SIP. So, what are you waiting for? Go invest in gold funds today to achieve your financial goals. Happy investing!