Mutual funds with gold as their underlying assets have started year 2016 on a firm footing. At a time when the stocks markets are in a turmoil and majority of equity-oriented schemes have generated negative returns for investors, gold funds have emerged outperformers across all asset classes thus far this year.
In the past month, schemes in the gold funds category have given an average category return of 6.77 per cent - the highest across the board. During the same period, the rates of standard gold rose from Rs 25,310 to Rs 26,980 per 10 grams. Gold, which is considered a safe-haven investment, has found favour with investors amid turmoil in global equities. The rise in gold prices came while key benchmark stock indices have lost nearly nine per cent, triggering deep cuts in net asset value (NAV) of majority of the equity schemes.
Interestingly, gold as an investment has been almost relegated by investors over the past few years. Continuous outflows from gold funds amid closures of accounts was being seen as a shift of investors from gold to equity as an asset class.
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