Should you invest in Gold Funds in India

Physical gold such as gold jewelry or gold coins has several drawbacks such as storage in safety vaults and the associated locker charges. They also demand price markups due to the design and making charges. Apart from these, purity issues and lack of flexibility in investment amounts can make buying physical gold inefficient. In contrast, Gold ETFs and Gold Fund of Funds have become popular forms of investment. Gold ETFs have received rising net inflows from investors. The number of folios in Gold ETF surged by almost 10% in June to Rs. 18.32 lakh from Rs. 16.68 lakh in May as per monthly data from AMFI. Another way of investing in Gold digitally and overcoming the drawbacks of investing in physical gold is by investing in gold fund of funds instead.

The meaning of Gold Fund of Funds is an open-ended fund which has an underlying investment in Gold ETFs, that in turn is backed by physical gold and tracks the domestic price of Gold. The NAV is declared at the end of the trading day similar to other mutual funds. One can invest in a Gold Fund of Funds via an SIP, where you can invest a minimum of Rs 500. When comparing gold funds vs gold ETF, one doesn’t need a DEMAT account for investing in a gold fund of funds. The capital gain arising out of redeeming Gold Funds within less than three years is subject to short-term capital gains tax which will be taxed as per Income Tax slabs. For capital gains arising for a holding period of more than three years, then it will be long-term capital gain, which will be taxed at the rate of 20%.

Gold acts as a strategic asset in an investor’s portfolio, given its ability to be an effective risk-reducing portfolio diversifier. It helped alleviate losses for investors who owned them during the pandemic.

With the fall in gold prices in response to the strengthening of the US dollar in Jun 2021 and talks of interest rate tightening as early as CY 2023, investors can consider allocating a portion of their portfolio to Gold.

While selecting a Gold fund of Funds, just like any mutual fund, investors need to analyze the fund based on certain quantitative and qualitative parameters, that one can use to arrive at the best gold funds as per their requirements. Additionally, it would be best if one were to keep their financial goals, risk appetite and investment horizon in mind.

Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.

How diversification with the help of equity and debt mutual funds is important in times of volatilit

The sharp fall in equity markets during the onset of Covid in March last year in 2020 was a wake-up call for investors to diversify their investments across sectors, assets and market caps. As the adage goes about not putting all your eggs in the same basket, if you invest your entire money in stocks of a single company or a single asset, you may end up losing money.

Some company stocks could be more volatile than others. Thus, it is a prudent decision to invest in a portfolio of different stocks. As a retail investor, it is complex and time-consuming to pick and manage multiple stocks. This is where equity mutual funds can help. Equity mutual funds invest in different stocks, thereby overcoming concentration risks and helping you minimize the downside risks.

The meaning of an equity mutual fund is a scheme that as per the scheme information document invests a minimum of sixty-five per cent of its net assets in equity and equity-related instruments.. It is suitable for investors with a high-risk appetite and a long-term investment horizon. There are different types of equity mutual funds such as categorization as per market capitalization; Large, mid and small cap, categorizing as per styles; value & contra, sectorial/thematic funds, ELSS (Equity Linked Savings Scheme) etc.

The current pandemic has shifted the focus of retail investors towards debt mutual funds. A debt mutual fund, also known as a fixed income fund invests in bonds and other debt securities. It invests in Treasury bills (T-bills), Government securities (G-secs), Debentures, Commercial Paper, Certificates of Deposit and others.

When you compare Equity Funds vs. Debt Fund, equity mutual funds generally have the potential of generating higher returns over the long-term. If you have a long term horizon and have a risk capacity to bear volatility, then an equity mutual fund is for you. However, if you are looking for a short-term horizon of less than three years, then you might consider investing in debt mutual funds that are relatively less volatile and has potential to help you achieve short term goals.

A portfolio mix of equity and debt mutual funds has potential to help to minimize downside risks due to market ups and downs. Last but not the least, a periodical review is needed to ensure that the assets you have invested in are aligned to your intended goals. As you near your financial goals, you may want to have a greater proportion of your portfolio invested in debt mutual funds than in equity mutual funds. Those who are starting to invest and do not have too many financial obligations and to investment for long term may choose to invest a larger portion of their investments in equity mutual funds.

Top 5 Unusual New Baby Presents

So you’ve been invited to a baby shower or a friend’s just had a new baby and now you have to decide on a gift. But with so much choice out there, where do you start? Here are my top 5 unusual new baby presents to give you a helping hand:

1. The Nappy Cake.

Before I hear you say ‘bleurgh!’ this isn’t a cake that you eat! A nappy cake is made from rolled nappies, arranged into tiers to resemble a wedding cake. They are then filled and decorated with useful baby items and make a fantastic centerpiece for the baby shower as well as a fantastic gift as they really have the ‘wow’ factor. They are available in different sizes and to suit all pockets so there’ll be something amazing for your budget.

2. The Baby Bouquet

Instead of the usual bunch of flowers, why not go one step further and give a bouquet made from baby clothing rolled to look like flowers? Usually combined with foam or silk flowers and foliage these can be difficult to distinguish from the real thing. Also, unlike real flowers, this gift won’t wilt and can be enjoyed until the arrival of the new baby when the clothing will come in very handy.

For those on a more limited budget, go for a sock rose. Make from 1 pair of baby socks they are rolled to resemble a single rose complete with leaf and then wrapped in cellophane & ribbon. Especially good as a small token baby shower gift if you are planning on getting a larger baby present after the baby has arrived.

3. Baby Sock Cupcakes

Just like the real thing, but kinder to the waistline! These cupcakes are actually made from little baby socks each nestled within a reusable silicone cupcake case and packaged in bakery boxes. Get pinks for a girl, blues for a boy or a combination of candy colours for a mouthwateringly visual treat.

4. Baby Smoothies

Want a unique gift? Go for a baby smoothie – so delicious mum-to-be will want to drink it! Looking like a fruity smoothie topped with whipped cream, they are in fact made from a baby sleepsuit & hat within a smoothie cup, topped with a weaning spoon. A very practical gift with fantastic & unique packaging!

5. Candy Box Socks

Strapped for cash but want to give a memorable & useful gift? Try Candy Box Socks – looking like a box of brightly coloured sweets, they are actually individual baby socks. These will definitely last longer than a box of candies!