Gold mutual funds are a type of gold ETF

Gold mutual funds are a type of gold ETF. These are schemes that primarily invest in gold ETFs. Gold mutual funds do not invest directly in physical gold, but take the same position indirectly. Gold mutual funds are open-ended investment products that invest in gold exchange traded funds (Gold ETFs) and their net asset value (NAV) is tied to the performance of ETFs.

You can start investing in Gold Mutual Fund with 500 through monthly SIP. A demat account is not required to invest in it. You can start investing in it through any mutual fund house.

An investment of more than 3 years in gold mutual funds is considered long-term and its profit is called long-term capital gains (LTCG). Gold is taxed at the rate of 20% with indexation benefit (plus surcharge, if any and cess) on LTCG, while short-term capital gains (STCG) are taxed at the slab rate applicable to the investor.