Gold Fund

Gold Mutual Fund

A mutual fund or other investment company that invests predominantly or exclusively in securities related to gold. For example, it may invest in futures contracts or options in gold itself or in stock in gold mining companies. See also: Precious Metals Fund.

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Precious Metals/Gold Fund

A mutual fund or other investment company that invests predominantly or exclusively in securities related to gold or other precious metals. For example, it may invest in futures contracts or options in silver and platinum.

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gold fund

An investment company with all or a major part of its assets in gold or gold-related securities. A gold fund's price, which is closely related to the value of gold, frequently moves opposite the prices of other securities and stock market indexes.

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Gold fund. Gold funds are mutual funds or exchange traded funds (ETFs) that purchase shares in gold mining companies, companies that process and distribute gold, and sometimes the gold itself.

Investors purchase gold funds as a hedge against inflation and international instability -- both economic and political. Since the performance of gold as an asset class is not correlated to the performance of stocks, bonds, and cash, by adding such a fund to your portfolio you can help protect it against systematic risk.

Gold funds tend to be extremely volatile, so fund managers try to minimize risk by investing in a diversified portfolio, often purchasing shares in companies that operate in different regions of the world.