Gold Mutual Funds vs Physical Gold: Who Sparkled Brighter in 1-Year Returns?

If you invested Rs 10 lakh in physical gold a year ago, your returns would closely mirror gold’s price appreciation-roughly 25-30% over the past year, depending on purity and market timing. However, top-performing gold mutual funds have delivered even stronger results. For instance, the average 1-year return for gold-based mutual funds stands at 30.96%, with leading funds like Quantum Gold Fund, Aditya Birla Sun Life Gold Fund, and Kotak Gold Fund posting returns between 24.7% and 25.5%.

 

This means your Rs 10 lakh in a top gold mutual fund would have grown to approximately Rs 12.5 lakh, compared to a similar or slightly lower amount with physical gold, but without the hassles of storage, purity concerns, or liquidity issues. Gold mutual funds and ETFs also offer lower transaction costs and better downside protection, making them attractive for investors seeking both safety and returns.

 

In summary, over the last year, gold mutual funds have edged out physical gold in returns, convenience, and risk management.

 

Source: Economic Times, Financial Express, Value Research