Mutual Fund SIP vs Gold SIP: Which one will make your money grow faster? Find out
Mutual fund SIP would give around 13 to 15 per cent return if the investment is for long-term say for 20 years or above. Gold SIP also give returns to this tune, say experts.
Mutual Fund SIP vs Gold SIP: Mutual Fund investments are available in both SIP (Systematic Investment Plan) and one-time investment options. As per the investment experts, for those salaried investors who are in the nascent phase of their investment, SIP is the most preferred option provided the investment is for long-term. Nowadays, Gold Funds and Gold ETF is also available in the SIP mode and it is also gaining traction among the investors. However, as per the investment experts, Gold SIP is popular among those who don't have much idea about mutual fund returns i.e. gold SIP is popular among the new investors in the mutual funds market.
Speaking on the normal mutual fund SIP and Gold SIP Manikaran Singh, a SEBI registered investment expert said, "Investment in gold funds and mutual funds can be done through SIP as well. In fact, the SIP investment for long-term is always advisable as one can start investing at the very beginning of his or her career. An investor investing in the mutual fund SIP can go long and expect to meet some big dream in long-term." He said that it's better to invest in Gold SIP as it is free from storage and gives almost the same returns that a bar of physical gold would give.
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Comparing the Gold SIP with mutual funds SIP returns Kartik Jhaveri, Director — Wealth Management at Transcend Consulting said, "A normal mutual fund SIP would give around 13 to 15 per cent return if the investment is for long-term say for 20 years or above. Similarly, in the case of Gold SIP for more than 20 years, one can expect the same return with a margin of around 0.25 to 0.5 per cent on either side of the investment." Kartik Jhaveri of Transcend Consulting said that in both types of SIP, one needs to pay the same taxes so for those who don't have any investment expert around them, it's better to invest in the Gold SIP citing, "It has been found that mutual fund investors have a perception that all mutual fund plans are giving same returns as around 85 to 90 per cent of the funds invested by various asset managers of the mutual fund houses are are in the same stock. They are partially correct and partially incorrect because they don't know the volume of investment their fund manager is doing in those similar stocks."
Comparing Gold SIP with index mutual funds Kartik Jhaveri said that Gold SIP is like index mutual fund which is free from the external adaptation to enhance investor's returns. But, gold itself is a precious metal and as per the last few year's returns, Gold SIP has been found at par with the normal mutual fund SIPs.
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