Gold mutual funds offer a strategic investment option for those interested in accumulating gold without the hassle of physically purchasing it. These funds primarily invest in Gold ETFs, avoiding the drawbacks associated with the physical ownership of gold such as storage costs, safety issues, and liquidity concerns. The net asset values (NAVs) of these funds closely track the daily price of gold, presenting them as a superior choice over physical gold.

When considering investments in Gold Mutual Funds, it is crucial to pay attention to the fund's expense ratio and asset allocation strategy. Although Gold Funds have a slightly higher expense ratio than direct investments in Gold ETFs, they remain more economical compared to owning physical gold. Diversifying your investment portfolio by allocating funds to various asset classes is also recommended for better risk management.

Gold Mutual Funds are subject to capital gains tax rules. Short-term capital gains tax applies if units are held for 3 years or less, whereas long-term capital gains tax applies if the period exceeds 3 years. Seeking guidance from a tax advisor is advisable for personalized tax advice.

Investing in Gold Funds is straightforward; a demat or trading account is not essential. You can initiate investments in direct plans of Gold Mutual Funds through a free investment account with platforms like ET Money. Alternatively, you may use a demat and trading account to purchase Gold Fund units listed on the market.

For additional resources on Gold Mutual Funds and other financial products, you can explore the ET Money website. It offers a variety of tools like SIP Calculators and Mutual Fund Calculators to aid in making informed investment choices. The ET Money team is also available to provide assistance for investors.

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