Best Precious Metal Mutual Funds to Invest in India

Gone were those days when one used to consider Gold and Silver as physical assets only. Now, there are various precious metal mutual funds to invest in India, through which one can invest in precious metals in a more professional, economical and convenient manner.

In today’s blog post, we will give you an overview of the best precious metal funds to invest in India. 

What are Precious Metal Mutual Funds?

Precious metal mutual funds are the schemes offered by asset management companies that primarily give you exposure to precious metals or commonly known commodities such as Gold, Silver, etc. By investing in metal mutual funds, one can gain exposure to precious metals without the hassle of physical storage.

Features of Precious Metal Mutual Funds

The key features of precious metal mutual funds are as follows:

1. Affordability: One can easily invest in metal mutual funds with small amounts. And monthly investments through SIPs can also be made in it.
2. Liquidity: Unlike physical metals, mutual funds offer greater liquidity, as investors can invest and withdraw funds at any time.
3. Inflation Hedge: Metal mutual funds offer a hedge against inflation; hence, they can protect purchasing power during high-inflation regimes.
4. Transparency: Prices of metal mutual funds are linked to domestic gold prices and are influenced by global factors.

Top Precious Metal Mutual Funds to Invest in India

1. SBI Gold Fund
2. HDFC Gold ETF Fund of Fund 
3. Nippon India Gold Savings Fund
4. Kotak Gold Fund
5. ICICI Prudential Gold ETF FoF
6. Nippon India Silver ETF FoF 
7. HDFC Silver ETF FoF 
8. SBI Silver ETF FoF
9. Axis Gold Fund
10. Edelweiss Gold and Silver ETF FoF 

Funds	NAV (INR)	Net Assets (INR Cr)	Exit Load (%)	Expense Ratio (%)
SBI Gold Fund	47.56	15024	1.00 (15D)	0.24
HDFC Gold ETF Fund of Fund	48.56	11457	1.00 (15D)	0.18
Nippon India Gold Savings Fund	62.05	7160	1.00 (15D)	0.13
Kotak Gold Fund	62.83	6556	1.00 (15D)	0.16
ICICI Prudential Gold ETF FoF	49.83	6338	1.00 (15D)	0.09
Nippon India Silver ETF FoF	39.47	6099	1.00 (15D)	0.26
HDFC Silver ETF FoF	42.71	5811	1.00 (15D)	0.23
SBI Silver ETF FoF	27.59	4779	1.00 (15D)	0.30
Axis Gold Fund	49.04	2834	1.00 (15D)	0.17
Edelweiss Gold and Silver ETF FoF	36.68	3082	0.10 (15D)	0.23

Overview of the Best Precious Metal Mutual Fund

1. SBI Gold Fund

SBI Gold Fund is a recently-launched fund managed by SBI Funds Management Pvt. LTD., based in Mumbai, was launched in September 2011. Gold ETFs are the major investments in the fund as it tracks domestic gold prices, and they are a favourite investment option to provide protection against inflation, portfolio diversification, and disciplined investment in gold through SIPs.

2. HDFC Gold ETF Fund of Fund

This fund is offered by HDFC Asset Management Company Ltd., Mumbai, and was launched in November 2011. It invests in HDFC Gold ETFs to reflect the movements of the gold prices, and it is very popular in systematic investing, long-term wealth protection, and providing stability to the equity-intensive portfolios.

3. Nippon India Gold Savings Fund

This fund was started in March 2011 by Nippon Life India Asset Management Ltd, which is based in Mumbai and offers an exposure to gold using ETFs and other related instruments. It is characterised by effective cost management and is appropriate for investors interested in protecting against inflation and market volatility.

4. Kotak Gold Fund

This fund, managed by Kotak Mahindra Asset Management Company Ltd., Mumbai, and started in March 2011, tracks the movement of gold prices by investing in gold ETFs. It is the appropriate investment choice among investors who wish to have a consistent exposure to gold through SIPs with a highly rated and reputable AMC.

5. ICICI Prudential Gold ETF FoF

This gold Fund-of-Fund, launched in 2011 by ICICI Prudential Asset Management Company Ltd., Mumbai, invests in gold ETFs to track domestic gold prices. It is attractive to investors who are interested in having a good exposure to gold with the support of ICICI Prudential’s good fund management and distribution network.

6. Nippon India Silver ETF FoF

This fund was introduced in February 2022 by Nippon Life India Asset Management Ltd., Mumbai, and it offers exposure to the prices of silver in the form of silver ETFs. It fits well with the investors who want to diversify their holdings other than gold and enjoy the benefits of the industrial and investment demand for silver.

7. HDFC Silver ETF FoF

This fund is managed by HDFC Asset Management Company Ltd., Mumbai and was launched in 2022. It tracks silver prices by using silver ETFs. It provides an investor with an easy entry to the silver price movement, enjoying the convenience and transparency of the mutual fund path.

8. SBI Silver ETF FoF

This fund was launched in the year 2022 by SBI Mutual Fund. This fund tracks the performance of silver ETFs, and investors can take the exposure in it through SIPs and a lump sum.

9. Axis Gold Fund

This is a fund which follows and tracks the price of gold by investing in gold ETFs and was launched in October 2011 by the Axis Asset Management Company Ltd., Mumbai. It is characterised by fair prices and a stable monitoring system, and is appropriate for those investors who want to have a stable portfolio in the form of gold over time.

10. Edelweiss Gold and Silver ETF FoF

Launched by Edelweiss Asset Management Ltd., Mumbai, in August 2022, this is a unique fund that holds both gold and silver ETFs. It provides two precious-metal exposures within a scheme, which is perfect for investors who want more diversification in commodities.

Read Also: Best Performing Precious Metals ETFs

Why One Should Invest in a Precious Metal Mutual Fund

One should invest in a precious metal mutual fund because it acts as a hedge against inflation and also provides stability in the portfolio, as it has low correlation with equity and bonds. In case of global uncertainty, geopolitical tensions, etc., investors considered precious metals as a safe haven to park funds. Hence, one can allocate a certain portion of their portfolio into precious metals.

Conclusion

On a concluding note, investment in a precious metal mutual fund is the most economical and efficient way of investing in gold, silver, etc. It offers a low-cost investment option to have an allocation in gold and silver. Most of the precious metal mutual fund tracks the performance of underlying gold and silver ETFs, reflecting the changes in domestic prices of precious metals. However, one should invest in these funds only after consulting their investment advisors.

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