Kotak World Gold Fund: Fund review

High valuations, availability of select companies with promise of earnings growth and increasing uncertainty in global equity markets have forced many investors to look at other asset classes.

Experts say at this juncture enhancing exposure to gold can reduce risks associated with equities and provide incremental returns. Historically, gold has always been seen as a safe haven.

Exposure to gold to the tune of 8-11% of one’s portfolio is one of the ways to mitigate some of concerns surrounding the current uncertainties.


Instead of buying physical gold, investors can consider gold funds. Among such schemes is Kotak World Gold Fund. The scheme invests in an international fund which in turn invests in gold mining companies and marketers. Since the returns of such schemes are linked to price movement of gold, investors should opt for systematic investment plans or systematic transfer plans to invest in the scheme.

Returns (In %)

Period	CAGR Return	SIP CAGR Return	Diversified Large Cap AVG CAGR (%)
1 Year	31.46	40.74	9.75
3 Year	3.69	9.93	9.92
5 Year	3.69	6.96	5.49

Returns Peer Comparison (In %)

Scheme	1-Year	3-Year	5-Year
Aditya Birla Sun Life Commodity Equities Fund	1.43	5.22	3.28
Aditya Birla Sun Life Global Emerging Opportunities Fund	10.27	4.80	1.31
Franklin Asian Equity Fund	17.75	12.39	7.93

Source: Accord Fintech, Complied by ETIG Database

Expert Take
Vishal Dhawan, CFP, Plan Ahead Wealth Advisors
Kotak World Gold Fund has done very well last year but investors will need to be very prudent with their allocations into the fund as the parent fund invests in companies that are involved in gold mining which can be very volatile by nature. Thus when gold prices go up, this fund could outperform gold and when gold prices are down, it could underperform.