As the festive season approaches, investors are turning to gold and silver funds, especially digital options, as a hassle-free, cost-effective way to gain precious metals exposure without the drawbacks of physical ownership. Experts advise a cautious, diversified approach for portfolio stability.
Ahead of the festive season, Business Today TV has turned its attention to an investment question that comes up every year: whether gold and silver funds can offer a cleaner alternative to buying jewellery or coins. In a Money Today segment, Sakshi Batra spoke with Santosh Joseph, founder of Germinate Investor Services, about how investors can use gold and silver mutual funds and exchange-traded funds to gain exposure to precious metals without taking delivery of the metal itself.
The appeal is straightforward. According to the programme, digital gold and silver products remove making charges, storage worries and purity concerns, while often keeping costs lower than physical purchases. That makes them attractive for investors who want the traditional defensive qualities of precious metals without the practical drawbacks that come with safekeeping jewellery or bars.
Joseph also argued for restraint rather than conviction trading. He said a 10% to 15% allocation to precious metals can work as a portfolio hedge, split evenly between gold and silver. The idea is not to chase short-term gains but to use these assets as a stabiliser when equity markets become volatile or inflation pressure rises.
For investors deciding between ETFs and mutual funds, the distinction is mainly about how they trade. iShares, FINRA and other investor-education sources note that ETFs are bought and sold on exchanges during the day at market prices, while mutual funds are priced once at the end of the trading session based on net asset value. That can make ETFs more flexible, while mutual funds may suit investors who prefer automatic investing through systematic plans.
Tax treatment and investing style also matter. The Business Today segment pointed to the need to understand how these products are taxed before buying, while industry guides from Fidelity and ETF.com say fees, liquidity and the size of the initial investment can also differ. For retail buyers, a systematic investment plan may be better if they want to build exposure gradually, while a lump-sum approach may suit those who already have money set aside and are comfortable with market timing.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
