Dhaval Kapadia, Director, Portfolio Specialist, Morningstar Investment Adviser (India) answers queries in The Financial Express, from where the below has been taken.
I want to save some money in a gold fund for my daughter. I have two questions.
1) Can I invest every month in the fund?
2) Can I redeem the units in gold?
— Rahul Gupta
Most asset management companies, or AMCs, provide Systematic Investment Plan (SIP) or Systematic Transfer Plan (STP) modes of investment into Gold Savings Funds.
Further, a few AMCs also provide an option of defining the SIP in terms of quantity of purchase desired. In such cases, the value of investment or SIP would be dynamic and vary depending on the net asset value, or NAV, of the fund.
On redemption, the value of holdings (or units) based on the prevailing NAV would be provided and the units cannot be redeemed in gold.
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