Gold fund-of-funds is the flavor of the season this Diwali.
Advisors are being approached by investors seeking their advice on which form of gold investment they should go for this Diwali season.
The three popular forms of virtual gold investment are ETF, fund-of-funds and gold futures in commodity market. Kanak Jain, an IFA from Kolkata has observed that his investors are interested in two forms – gold fund-of-funds and gold futures in commodity market. “Most of my investors initiate gold SIP investment during this auspicious occasion,” he added.
Nikhil Mehta, an IFA from Mumbai believes that every investor should allocate 5 percent to 7 percent of their portfolio in gold investment. He recommends gold fund-of-fund to his clients because it is easy to invest in fund-of-fund as the investor does not need a demat account, which is required for ETF investments.
“Many investors have an emotional attachment of buying gold on this day. But as gold prices are too high currently, I am suggesting my clients to go for virtual gold investment through SIP. It is the most pocket friendly approach for retail investors,” said Vivek Shah, IFA from Mumbai.
On the other hand, Ritesh Sheth, a Mumbai based IFA recommends physical gold on occasions like Diwali. “We usually suggest investors to invest in gold fund-of-funds. However, for any auspicious occasion like Diwali, we suggest our customers to buy gold jewelry since most of them get satisfied only by buying physical gold.”
