Why Investors Consider Gold in Portfolio Diversification
1. Introduction
When markets swing wildly and headlines turn alarming, one age-old asset has quietly stood its ground for centuries - gold.
Gold is used for diversification because its movement doesn't directly correlate to how stocks or bonds behave. Thus, if one asset dips, another may stabilize, thus minimizing the hit to your total portfolio. This is why we use gold to offer our diversified portfolios. How much? What kind? This document clarifies these important aspects of gold investing in simple terms. We’ll also show you a more intelligent way to own gold - on a gram, not just rupee- basis.
2. Key Terms
Before we dive in, here are the 5 terms you will see throughout this article:
3. Why Do Investors Include Gold?
Gold moves differently from stocks
Equities are pulled higher by company profit, the economy and animal spirits, while gold takes direction from global demand, currency swings and political developments, meaning they are prone to move opposite each other at the most difficult times.
💡 Simple Example
In 2020, when global equity markets fell sharply during the pandemic, gold prices rose significantly. Investors holding both experienced less damage to their overall portfolio than those holding only stocks.
Gold as a potential inflation buffer
If there’s an increase in inflation, the money that you have decreases the ability to buy goods and services. The idea of gold as a fixed physical asset having value in periods of inflation is a commonly explored concept, but there is no certainty - many global trends and factors can impact gold. Gold can be seen as one protective layer but certainly not an entire one.
Gold's role in asset allocation
In the financial planning world, the recommendation is to have a small portion of a portfolio - ranging from perhaps 5-15% - parked in gold alongside equity and debt. It isn't meant to replace those two components; it's an alternative asset class-a 'third leg of the stool,' as the parlance goes - wh3ose journey is less predictable.
4. Fixed Rupee SIP vs. Buy Gold and Silver in Grams | Shagun by AxisGram-Linked SIP - Which Feels Right?
Most people invest in gold through a fixed monthly rupee SIP. But there is now a more goal-oriented approach: investing by grams.
Please note: The gram-based illustration is for ease of understanding the investment approach.
⭐ Shagun Gram-Linked Approach
Investor C uses Shagun by Axis MF and sets a target of exactly 1g per month. Six business days before their SIP date, the system references the live gold spot price, calculates the exact rupee debit, and allots units accordingly. After 12 months, they own exactly 12 grams - with absolute clarity. In a high-price month, the debit rises slightly. In a low-price month, it falls. But the gram count stays on track.
5. How Shagun Works - 5 Simple Steps
Axis Shagun operates through the following mutual fund schemes:
• Axis Gold Fund
• Axis Silver Fund of Fund
Investments under Shagun SIP are made into these underlying mutual fund schemes, and units are allotted as per applicable NAV.
1. Choose Your Asset - Select gold or silver .
2. Set Your Gram Target - Decide your monthly quantity in grams (e.g. 1g gold or 10g silver). Focusing on weight, not rupees.
3. Pick Your SIP Date - Choose a monthly date that works best for your financial planning.
4. Smart Price Check (T-6) - 6 days before your date, the system references the live spot price to calculate the correct rupee debit. You can also set optional caps or floors to manage debits.
5. Automatic Wealth Growth - The computed amount is debited on T-6. Units are allotted and held securely as mutual fund units per SEBI rules. Sit back and watch your grams grow.
6. Planning a 30-Gram Goal - Three Investor Approaches
Suppose you want to accumulate 30 grams of gold for a family milestone - a wedding, a festival, or a gift - over 30 months.
7. Who May Consider Gold Diversification?
8. Important Risks to Know
• Gold price fluctuates and can plummet over many months.
• Gold is not perfectly related to inflation.
• Gold funds have tracking error - the return you receive might be slightly different than the actual price of gold.
• Gold doesn’t pay any interest or dividends.
• History of gold doesn’t tell you anything about the future price of gold.
9. Common Questions
Q: Why is gold used for diversification?
Because of how it usually moves inversely to the stock and bond markets, particularly under stressful market conditions, so that volatility of the whole portfolio is diminished.
Q. How are units allotted under Shagun SIP?
The SIP instalment amount is calculated based on the reference gold/silver price (T-6 days prior to SIP date). Once the amount is debited, units are allotted in the selected underlying scheme (Axis Gold Fund / Axis Silver Fund) at the applicable Net Asset Value (NAV), in accordance with SEBI regulations.
Number of units allotted = Invested amount ÷ Applicable NAVThe units are credited to the investor’s folio and reflect in account statements like any mutual fund investment.
Q: What makes Axis Shagun different from a regular Gold SIP?
Axis Shagun lets you set a gram target (e.g. 1g/month) instead of a fixed rupee amount. The rupee debit adjusts automatically based on live gold prices (T-6), so you always accumulate exactly the grams you planned.
Q: How much gold should be in my portfolio?
The amount of gold to hold depends upon your financial objective, tolerance to risk and current portfolio in hand. You should also consult SEBI registered Investment Adviser for specific recommendations.
Investors are requested to note that Axis Asset Management Company Limited has temporarily restricted certain subscription transactions in Axis Gold ETF and Axis Gold Fund with effect from June 8, 2026.
For Axis Gold ETF, subscription transactions by large investors for an amount exceeding ₹25 crores directly with Axis Mutual Fund shall not be accepted. However, transactions by Market Makers / Authorized Participants shall continue.
For Axis Gold Fund, no lumpsum subscriptions or switch-ins aggregating to above ₹10 lakhs per PAN per month shall be accepted post the cut-off time (3:00 PM) on June 11, 2026. Transactions exceeding the specified limit may be rejected.
The above restrictions are temporary and shall remain in effect until further notice.
*Note: Investors will be bearing the recurring expenses of the scheme in addition to the expenses of underlying schemes in which Fund of Funds scheme makes investment.
Axis MF/AMC is not guaranteeing any returns on investments.
The units allotted may not correspond to the exact grams due to price fluctuation and other charges.
Please click below for more information:
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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