Gold funds offer 7.76% in one month; topper offer 11%

Gold funds, the toppers in the one-month performance chart, have offered an average return of around 7.76% in one month, according to the ACE MF database. These funds gave 2.61%, 5.73%, and 19.78% in three months, nine months, and one year respectively. These funds lost around 1.72% in six months. There are around 24 gold schemes available in the market.

DSP World Gold FoF, the topper in the category, offered 11.05% in the one-month horizon. UTI Gold ETF and LIC MF Gold ETF gave 8.63% and 8.62% respectively during the same period. Invesco India Gold ETF gave 8.52%. Both SBI Gold ETF and Axis Gold ETF gave 8.49% in one month.

Around 13 schemes gave around 7% in one month horizon.



Axis Gold Fund and Aditya Birla Sun Life Gold Fund gave 6.73% and 6.03% respectively in one month horizon.

The schemes are benchmarked against Gold-London Bullion Market association (LBMA), Gold-India, Gold-London AM, and FTSE Gold Mines. Gold-London AM gave around 9.60% in one month.

DSP World Gold FoF lost the most in six and nine month horizons. The scheme lost around 15% and 3.37% respectively. LIC MF Gold ETF FoF offered the highest return in the three month horizon. The scheme gave 3.25% during the same period.

Axis Gold ETF, the topper in the category, gave 6.71% in nine months. LIC MF Gold ETF offered the highest return in one year. The scheme gave 21.12% in one year.

Based on the yearly returns for the last 10 years, the schemes offered the highest return during the covid times. The schemes gave an average return of around 26.63% in 2020. The schemes also gave 23.25% in 2019.

Gold is used as a hedge against economic uncertainties and as a tool for diversification of the portfolio. Gold tends to outperform all other assets when there is economic turmoil.

Gold and silver funds are used for portfolio diversification. If you have a large portfolio, you can earmark a small percentage of the total portfolio (advisors say around 10%) to invest in gold and/or silver. If you are starting out or you have a very small portfolio, you can give it a miss. Investors should remember that these funds wont offer you greater returns year after year. They are supposed to offer you diversification and add stability to your portfolio in times of economic turmoil.