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Should I continue to invest in Axis Gold Fund?

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Last Updated: Jan 17, 2020, 12.29 PM IST
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I am 45 years old. I have started an SIP of Rs 5,000 in Axis Gold Fund. I also have SIPs of Rs 20,000 in three equity mutual fund schemes. Have I taken the right decision of investing in Axis Gold Fund?
---Bharat Jain

Chokkalingam Palaniappan, Director, Prakala Wealth Management, responds:

When the economy is doing badly, gold glitters. It is called “Asset of Last Resort”. Last year, gold had a good bull run after five or six years. For portfolio construction, it is advisable to have 5-10% allocation to gold.

Gold funds invest purely in gold. Therefore, your returns will depend on the appreciation of gold in the physical market. For monthly SIPs, gold mutual funds are a better choice. You have a marginally higher allocation to gold. You may continue with it if you have any future requirement of gold. Alternatively, keep investing Rs 2,500 in gold and redirect the remaining amount in an ultra short duration bond fund like ICICI Prudential Ultra Short Term Fund.
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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