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Investment in Gold Vs Investment in Mutual Funds



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Gold Investments  Being an emblem of prosperity and good luck, gold has remained an integral part of the Indian society.  Apart from its use in the jewellery, the gold is also known as a reliable instrument for investment purposes.  The investment in the gold is done in various forms, namely gold coins and bars, Gold Exchange Traded Fund (ETF), jewellery and equity-based gold funds. Copyright©2017


Advantages of Gold Investment  The primary benefit of investing in gold is that it is considered as one of the safest options, especially during the economic turndown.  It can, basically, act as a high-quality, liquid asset when all the other assets may result in losses.  A steady rise in the gold prices is always witnessed, as there is a limited supply of this commodity in the world.  As the supply of gold is unable to match with its rising demand, the investor can be sure that its price will be elevated .  With multiple variants related to gold investment in the present scenario, it 4 Copyright©2017

Disadvantages of Gold Investment  Unlike mutual funds or real estate, gold investment does not offer a regular income.  Talking about the Gold ETF, it may be a tad costlier than physical gold due to brokerage and management fees linked to it.  The prices of the gold are controlled by the international market, which means a major global movement will result in the fluctuation of the gold prices.  Another major disadvantage is that the gold investment does not offer any tax benefits on your income.



Mutual Fund Investments  Mutual funds have gained traction in India in the recent years. A mutual fund can be simply defined as an investment scheme that allows the investors to pool their money into a single professionally managed investment.  An asset management company makes an investment in securities like bonds, stocks and other assets on behalf of the group of Copyright©2017


Advantages of Mutual Fund Investment  The very first advice you will receive from an experienced investor is to diversify your investments.  And by investing in mutual funds, you can be sure that your money is invested in multiple assets.  This ensures that even if there is a loss in investment, it can be handled by the gain from the other.  Another major perk is that the funds are handled by experienced professionals. It is l like having a full-time manager to handle and analyze investments without spending 7 in excess. Copyright©2017

Disadvantages of Mutual Fund Investment  The popular disclaimer "Mutual Fund Investments are subject to market risks.  Please read the offer document before investing" reflects how investing in mutual is not free of risks.  As the investment portfolio is handled by another individual, chances of losses may increase if s/he is not experienced enough.  The investors have to pay management fees to the companies or investment managers handling the funds, thereby decreasing the profit margins.



Difference Between Mutual Fund Vs Gold Investment Definition





Mutual Funds

Gold Investments

It is a financial product that operates by making an investment in multiple financial instruments by an asset management company. The investments are handled by financial experts.

It is a form of investment in which the returns are calculated on the basis of the current value of the physical gold. The investor is responsible for handling and making decisions. The investment is done via purchasing physical form of gold or gold ETF. No diversification is involved.

The investment is done through multiple types of securities, like debts and equities, thereby diversifying the portfolio. No risks involved, as the process takes place online.

Chances of gold getting stolen persist in the case of a physical purchase. 9

Difference Between Mutual Fund Vs Gold Investment Variants

Liquidity The cost of investment

Market knowledge



Mutual Funds

Gold Investments

There is a substantial variation on the basis of the type of funds. High liquidity Affordable as compared to gold investment. The practice can be started with as less as Rs. 1000. Detailed market knowledge is essential to expand profits and minimize risks. Both bull and bear financial outlook are associated with it, which ensures good returns to the individuals

Only the difference is on the basis of purity of gold, that is 22K or 24 K. High liquidity With prices rising on a regular basis, the minimum cost of investments is a bit high. Knowledge of gold prices is sufficient

It doesn’t pay the dividends.


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Investment in gold vs investment in mutual funds  

The investment in the gold is done in various forms, namely gold coins and bars, Gold Exchange Traded Fund (ETF), jewellery and equity-based...

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