Nippon India Gold Savings Fund is a mutual fund scheme that allows you to potentially benefit from the performance of gold without the need to own physical gold. It simplifies access to this precious metal and offers a hassle-free and professional approach to gold investment.
The primary goal of Nippon India Gold Savings Fund is to provide returns that closely mimic the performance of Nippon India ETF Gold BeES, subject to expense ratio. As the value of gold fluctuates, so does the value of your investment, hence allowing you to leverage the appreciation of gold over time.
At its core, it is an open-ended mutual fund scheme that does not require you to open a demat account as this is a fund of fund scheme and your investments go into buying units of Nippon India ETF Gold BeES.
Nippon India Gold Savings Fund offers distinctive advantages that make it an appealing option for investors looking to incorporate gold into their portfolios.
1. Hassle-Free gold ownership
Many investors are aware of the historically appreciating value of gold but find it difficult to buy and store the physical gold. Storing and safeguarding gold in physical form can be expensive and inconvenient for many. Investing in Nippon India Gold Savings Fund allows you to own gold without the logistical hassles and you do not even need a DEMAT account for it.
2. Real-time gold exposure
The value of the units gathered with this mutual fund scheme moves in tandem with the actual market price of gold. This means that the value of your investment follows the pattern of ups and downs of the value of gold. This can offer you direct and real-time exposure to the performance of gold.
3. Diversification
By investing in the Nippon India Gold Savings Fund, you can diversify your portfolio and add a precious metal component to your risk management strategy. This can help mitigate risk, as gold may behave differently from traditional asset classes.
4. No wastage or making charges
When you buy physical gold in the form of jewellery or coins, you incur additional costs, such as making charges and wastage. These costs can significantly reduce your effective investment in gold. Investing in Nippon India Gold Savings Fund, on the other hand, can help avoid these additional charges. In fact, the fund exclusively invests in Nippon India ETF Gold BeES, which in turn invests in physical gold with a purity of 99.5%.
5. Low entry point
The fund allows you to start investing in gold with a relatively low initial investment amount. This accessibility means that even investors with limited capital can participate in the potential benefits of gold. This is quite different from investing in physical gold, for which you may need adequate capital upfront based on your needs and preferences. Minimum Application Amount here is Rs.100 and in multiples of Re.1 thereafter.
1. Risk factor
Gold can be considered complementary to equity investments and can diversify risk to help you deal with market fluctuations. However, it's essential to acknowledge that gold prices can still experience fluctuations. Factors like changes in demand, geopolitical events, and currency movements can affect gold's value, affecting the NAV of the funds.
2. Long-term perspective
The historical trend observed by the value of gold in the long term makes it a suitable asset for investors with a patient and long-term investment horizon. Therefore, you can consider including this fund in your portfolio as a part of your financial strategy for the years ahead.
3. Costs and expenses
Nippon India Gold Savings Fund has an expense ratio of 0.92% & 1.14% for Direct Plan & Regular Plan respectively (including the expense ratio of 0.72% of the underlying scheme, i.e. Nippon India ETF Gold BeES, as of January 31, 2024. The expense ratio is the annual fee expressed as a percentage of assets that a mutual fund charges to cover its operating costs. Here, it's important to understand these costs as they may impact your returns over time.
4. Market environment
While you can invest in Nippon India Gold Savings Fund anytime, as per your investment preferences, it is important to stay informed about global and domestic economic conditions that can influence gold prices. Factors like inflation rates, central bank policies, geopolitical events, etc., can impact the value of gold
1. What type of fund is Nippon India Gold Savings Fund?
Nippon India Gold Savings Fund is an open-ended Fund of Fund mutual fund scheme that invests in units of the Nippon India ETF Gold BeES (Exchange Traded Fund - Gold Benchmark Exchange Traded Scheme). In essence, it provides investors with an avenue to invest in gold indirectly by owning mutual fund units.
This fund allows you to gain exposure to gold without having to purchase and store physical gold directly. As the fund's value is closely aligned with the market price of gold, you can benefit from the potential appreciation of gold price.
2. What is the current NAV of Nippon India Gold Savings Fund?
As of October 20, 2023, the Net Asset Value (NAV) of Nippon India Gold Savings Fund stands at Rs. 23.9681 (GROWTH PLAN GROWTH OPTION). This NAV can help determine the worth of your investments in the fund (if any).
As a mutual fund investor, you need to know that NAVs can fluctuate every day based on the change in value of the underlying fund's assets, which, in this case, are primarily linked to the market price of gold. The value may vary daily due to changes in gold prices and other market factors.
3. What is the AUM of Nippon India Gold Savings Fund?
As of January 31, 2024, the Assets Under Management (AUM) of this fund stands at Rs.1,603 crores. Here, the AUM represents the total market value of all the assets (primarily gold assets in this case) held within the fund. It indicates the collective investments of all its unit-holders, and its prominence among investors seeking exposure to gold through the mutual fund route.
4. How to invest in Nippon India Gold Savings Fund?
To start investing in this fund, follow these steps:
- Visit the official Nippon India Mutual Fund website.
- Opt for 'Quick Invest' or 'Register' to create your account.
- Browse through the available mutual fund schemes and locate 'Nippon India Gold Savings Fund.'
- Choose an investment plan aligned with your financial objectives and risk appetite.
- Specify the investment amount; the website will calculate units based on the current NAV.
- During the registration process, furnish personal and contact information.
- Fulfil the mandatory Know Your Customer (KYC) requirements.
- Select a payment method and confirm your investment.
5. Who is the Fund Manager for Nippon India Gold Savings Fund?
Mr. Himanshu Mange holds the position of Fund Manager for Nippon India Gold Savings Fund, where he plays a critical role in shaping the fund's investment strategies. Besides Nippon India Gold Savings Fund, he also manages 26 other open-ended schemes offered by Nippon India Mutual Fund.
6. What are the 5-year returns for Nippon India Gold Savings Fund?
As of September 29, 2023, the 5-year returns for Nippon India Gold Savings Fund are recorded at an impressive 12.33% CAGR (GROWTH PLAN). This rate is noteworthy as it suggests that the fund has demonstrated relatively strong performance over this duration, in line with the market dynamics influencing the value of gold.
7. What is the minimum amount to invest in Nippon India Gold Savings Fund?
The minimum investment amount for Nippon India Gold Savings Fund is Rs. 100. As an investor, you can initiate the investment journey in this fund with this relatively modest sum.
Such a low entry point may democratise access to gold as an asset class, as it doesn't exclude individuals with smaller investment budgets. It allows them to start with a sum that suits their financial situation and build their investment in the fund gradually.
8. Nippon India Gold Savings Fund charges 0.35% as an expense ratio. What does this mean?
Nippon India Gold Savings Fund has an expense ratio of 0.92% & 1.14% for Direct Plan & Regular Plan respectively (including the expense ratio of underlying scheme, i.e. Nippon India ETF Gold BeES), as of January 31, 2024. It represents the annual cost incurred by the fund for managing and operating its assets. This cost is expressed as a percentage of the fund's average AUM for a specific period.
This expense ratio can directly impact the returns you earn. The lower the expense ratio, the lower the annual cost to investors, which can improve your returns. In terms of scheme-to-scheme comparison, you can add expense ratio to the list of mutual fund comparison parameters.
9. My parents suggest investing in physical gold? How is this fund different from that?
Investing in physical gold and Nippon India Gold Savings Fund represent two different approaches to benefiting from gold. On one hand, physical gold ownership involves possessing tangible assets like coins, bars, or jewellery. While this offers direct ownership, it comes with responsibility to secure storage and making charges.
Conversely, Nippon India Gold Savings Fund provides an indirect way to invest in gold, without paying extra for storage charges or insurance charges. You can purchase units of this mutual fund scheme with as low as Rs.100 as an initial investment.
10. I earn only around Rs. 30,000 per month? Can I invest in Nippon India Gold Savings Fund?
Yes, you can invest in Nippon India Gold Savings Fund with an income of around Rs. 30,000 per month. The fund's low minimum investment requirement, which is as low as Rs. 100, makes it accessible to investors like you, regardless of the income level.
You can gradually increase the investment over time as your financial situation allows. If you haven’t yet decided how much you would want to invest in this scheme, you can consider using our SIP calculator to get an estimate of the returns you can expect.
11. Should I invest in Nippon India Gold Savings Fund for a short or long term?
Whether you should hold the investments in this fund for short-term or long term depends on your financial goals. Its potential to appreciate in value and provide substantial returns is typically more evident over the long term.
For investors who want to accumulate wealth, particularly for long-term financial objectives like retirement planning or wealth building, Nippon India Gold Savings Fund can become a valuable component of a diversified portfolio. It has the potential for capital appreciation that gold investments are known for.
12. I am nearing my retirement age. Should I invest in Nippon India Gold Savings Fund?
As you approach retirement, diversifying your investment portfolio may become essential to manage risk. Nippon India Gold Savings Fund can serve as a valuable diversification avenue, offering stability and acting as a hedge against economic uncertainties.
Gold fund investments may help safeguard your retirement savings from inflation and market volatility. This can be crucial as retirees typically aim to protect their nest egg. Depending on your expected retirement age, retirement lifestyle, and investment horizon ahead, you might require retirement savings to last for several decades.
13. Are there any exit penalties for withdrawing my investment in Nippon India Gold Savings Fund?
Yes, there is an exit load associated with Nippon India Gold Savings Fund. If you choose to redeem or switch out your investment within 15 days from the date of the allotment of units, you need to pay an exit load of 1%. This means you will incur a charge equivalent to 1% of the amount being redeemed, on withdrawing your investment during this initial period.
If you hold your investment longer and choose to redeem it after this initial period, you will not be subject to any exit load.
14. How much money should I allocate toward gold fund investments?
The amount you should allocate toward gold fund investments depends on your financial goals and the role you envision for gold in your portfolio. For instance, if you want to diversify your portfolio, then this investment can serve diversification. If you have a lower risk tolerance or are concerned about the volatility of financial markets, a higher allocation to gold may be desirable.
You can also use our asset allocation calculator to better understand how you should allocate funds in different asset classes.
15. Can I sell my Nippon India Gold Savings Fund units whenever the need arises?
Yes, you can sell your Nippon India Gold Savings Fund units whenever needed. The fund offers liquidity and allows you to buy or sell units as per your requirements. However, there might be an exit load if you redeem or switch out your investment within 15 days from the date of unit allotment.
You need to be mindful of the capital gains levied on the units before applying for redemption.
16. Are returns from Nippon India Gold Savings Fund taxable?
- Units Bought till March 31, 2023:
If you hold units for 36 months or more, the profits on sale is LTCG (Long term capital gains) and is subject to a flat tax rate of 20% after applying indexation.
If you sell these units within 36 months of purchase, the profits are treated as STCG (Short term capital gains) and are taxed according to your income tax slab.
- Units Bought after March 31, 2023:
If you have invested in units of Gold Savings Funds after March 31, 2023, the profits on sale/redemption are considered as STCG, regardless of the holding period and are taxed as per the applicable slab rates.
17. Can I monitor my Nippon India Gold Savings Fund investments online?
You can monitor your Nippon India Gold Savings Fund investments online. The fund provides you with access to an online portal or website where you can track your investments.
Here's how you can do it:
- Visit the official website of Nippon India Mutual Fund. Log in and access your investment details.
- If you haven't registered already, you'll need to register for an online account with the fund.
- Once registered, you can log in to your account using your username and password to monitor your investments in this fund.
18. Do gold and gold funds offer the same returns?
Physical gold, such as gold coins or bars, represents tangible ownership of the precious metal. The returns you can expect here may be primarily influenced by the market's demand and supply dynamics, currency movements, inflation, and many other factors.
However, gold funds, like Nippon India Gold Savings Fund, can provide indirect ownership of gold through mutual funds. The returns from gold funds are closely tied to the performance of the underlying gold as an asset. While physical gold and gold funds offer exposure to the precious metal, their returns can differ.
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