Gold Mutual Funds Outperform Large-Cap Equity Funds Across Multiple Time Frames

Strategic Insights -

Gold mutual funds have consistently delivered higher returns than large-cap equity funds over various time periods, from 3 months to 10 years, according to recent data. While large-cap funds have outperformed gold funds during the 5-year horizon, which was largely driven by the post-COVID market recovery, gold's performance has surprised many investors. This has led to a question: is gold a better long-term bet than equities? A closer look at the performance of gold mutual funds and large-cap equity funds reveals a nuanced picture, with each category having its own set of benefits and risks.

Key Takeaways:

  • Gold mutual funds have delivered higher returns than large-cap equity funds over 3 months (12.66% vs. 11.24%), 1 year (31.46% vs. 7.56%), and 3 years (22.41% vs. 17.51%).
  • However, large-cap equity funds have outperformed gold funds over 5 years (21.19% vs. 14.44%) due to the post-COVID market boom.
  • The average returns of gold mutual funds and large-cap equity funds over 10 years have been almost similar (12.43% vs. 12.57%).
  • Only 5 large-cap equity funds outperformed gold funds over 3 years, while 168 underperformed.
  • Despite strong 5-year returns, most large-cap equity funds have delivered returns comparable to those of gold funds.
  • A balanced mix of gold and equity is recommended for investors, as each category has its own set of benefits and risks.

Statistics:

  • 3 months: Gold mutual funds returned 12.66%, while large-cap equity funds returned 11.24%.
  • 1 year: Gold mutual funds returned 31.46%, while large-cap equity funds returned 7.56%.
  • 3 years: Gold mutual funds returned 22.41% (CAGR), while large-cap equity funds returned 17.51% (CAGR).
  • 5 years: Large-cap equity funds returned 21.19% (CAGR), while gold mutual funds returned 14.44% (CAGR).
  • 10 years: Both gold mutual funds and large-cap equity funds returned around 12% (CAGR).

Sources:

1. "Gold mutual funds outperformed large-cap equity funds across most time frames: Data" by Mithilesh Jha, IE Online Media Services Pvt. Ltd.

2. Data provided by various gold mutual funds and large-cap equity funds.