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HDFC Gold Fund: Should you invest?


HDFC Gold Fund: Should you invest?
Gold – The buzz everyone is talking about, the asset – sitting on the fire these days. Looking at the demand and to attract a large number of audience with this fiery word 'gold', various mutual fund houses have entered into this market.

Like India's renowned fund houses, HDFC Mutual Fund has also come out with HDFC Gold Fund – 'Fund of Funds' to be specific.


What is HDFC Gold Fund?
HDFC Gold Fund is a fund of fund which will invest in its own ETF i.e. in the the units of HDFC Gold Exchange Traded Fund (ETF). It means it will not invest in Gold directly but will own another fund (HDFC Gold ETF), which owns the physical gold. This fund provides you an option to invest in gold indirectly without holding a Demat Account but in an expensive way.

If you haven't read my last article about the Axis Gold Fund review, I would recommend you must read, where I have highlighted the difference between the Gold Fund and Gold ETF and should we invest in Gold Funds or not.

Except the name of the fund house, everything is same about all the Gold Funds.

The HDFC Gold Fund has already launched in the market on October 7, 2011 and will be closed on October 21, 2011.

The minimum investment required in HDFC Gold Fund is Rs 5,000 and the multiples of any amount thereafter till NFO closes. After the NFO period, the minimum investment is Rs 5,000 and multiples of Rs 1,000 thereafter.

If one would like to go via Systematic Investment Plan (SIP) route, the minimum monthly investment is Rs 500 and in case of quarterly investment, the minimum quarterly investment requirement is Rs 1,500 and multiples of Rs 100 thereafter for both the cases.


View: Unlike Gold ETF, the fund does not require a demat account and the stock market route for buying and selling the units. But, you need to bear dual expenses to invest in HDFC gold fund (the expenses of the fund and the underlying fund).

Returns - There can be no assurance that the investment objectives of the Scheme will be realized. Returns will be alike other Gold saving funds where fund will be backed by the performance of gold ETF.

Gold prices are ruling at its all-time high, so it is advisable that one shouldn't allot 10-15% of total investments. DISCLAIMER: The views expressed in this article are the views of the author and do not reflect the views of our company. does not take any responsibility for any losses incurred by investors who take their cues from the above article

Story first published: Monday, October 17, 2011, 13:45 [IST]
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