Gold funds have generated a negative annual average return of 11.44 per cent
Picture for representational purpose
MUMBAI: Investors in gold funds offered by domestic mutual funds are heading towards disappointment, as they are the only funds among various mutual funds schemes that have given a negative return over the past one-year. According to the data available with Value Research, a mutual fund tracking firm, gold funds have generated a negative annual average return of 11.44 per cent as compared to 40-100 per cent returns generated by various equity schemes. This means, if you had invested Rs100 in gold funds a year back, your investment is now just worth Rs 88.56.
Motilal Oswal MOSt Shares Gold ETF fund is the best performing fund, which managed to limit its losses to 9.44 per cent while Axis Gold fund is the worst performing fund with a negative return of 13.07 per cent.
Experts added that gold as an asset class has lost its appeal as a safe heaven asset as improving growth prospects in Europe and United States have increased global risk appetite and funds are moving towards riskier assets seeking better returns.
“The gold funds are reflecting the performance of the underlying asset. Though not bullish on gold, we would still advise investors to have at least 5-10 per cent of their investment in gold, which will act as a hedge for any potential losses for one’s financial asset portfolio,” said Lakshmi Iyer, head of fixed income and products, Kotak Mutual Funds.
( Source : dc correspondent )
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