Gold has been a precious currency for centuries, and its popularity as a hedge against inflation, currency fluctuations, and other economic troubles has only grown recently. Owning gold was once an exclusive opportunity reserved for kings, but now everyone can invest in it through gold funds. Investing in a gold fund can be an excellent way to protect and grow your wealth, and the gold fund available on ndovu’s platform is one of the best options in 2024.
Why Invest in a Gold Fund?
There are two primary ways to invest in gold: directly, by buying and storing physical gold, such as bullion or coins, and indirectly, by purchasing gold-related securities or funds. While purchasing physical gold can be challenging to obtain and store, investing in gold funds is more accessible and has several benefits, including:
- Hedge against inflation: Gold tends to hold its value and preserve purchasing power over the long haul, making it an intelligent way to fight inflation. Although its value may fluctuate in the short term, it’s relatively impervious to market swings in the long run, making it an excellent counterbalance to more volatile assets like stocks.
- Diversification: Gold funds have a low correlation to stocks and bonds, meaning they are less affected by economic events that might affect other investments. Additionally, gold funds have a negative correlation to the US dollar, so when the dollar loses value, the value of gold funds strengthens, and vice versa.
Read more about diversification and why it’s essential for your investment portfolio.
- Strong performance: The price of gold has been on the incline since November 2022, and the Gold Fund has gained approximately 14.65% in returns globally over the past year. Analysts and experts worldwide expect gold to hit record highs in 2023, with gains of up to 20% by the end of the year, making now an excellent time to invest.
Potential Risks of Investing in Gold Funds
As with any investment, there are potential risks to investing in gold funds, including:
- Price volatility: The price of gold can be volatile and may fluctuate significantly over short periods, making it difficult to predict its value and making it a risky investment.
- Inflation risk: While gold is an effective hedge against inflation, there is no guarantee that the price will increase along with the inflation rate.
- Political risk: Political events, such as wars, national elections, and changes in government policies, can affect gold prices.
- Storage and insurance costs: If you buy gold physically, you will need to store it safely and insure it against loss or damage, which can add to the overall cost of your investment.
How to Invest in Ndovu’s Gold Fund
Investing money can sometimes be intimidating, especially for beginners. With many investment opportunities out there you need to consider several things to decide which kind of product to invest your money in, including:
- Your Investment Goals. Before investing, consider your short- and long-term goals. Is your priority higher returns or preserving your capital? Answering these questions can help you pick the product that best suits your needs.
- Your Risk Appetite. Fixed Return Products, like all investments, carry some level of risk, so it is important to analyze how comfortable you are with the risk levels of different Return Products to inform your investment strategy.
What Are Exchange-traded Funds?
Through ndovu – it is easier for first-time investors to access a broader range of investment options previously only available to select investors. Through our secure online investment platform, we offer an easy and affordable way to invest in gold through our gold exchange-traded fund (ETF).
What is an ETF? Simply put, an ETF is an investment fund that allows you to buy a large set of individual stocks, bonds, or a single unit commodity in one purchase. Investors can invest indirectly in gold with Gold ETFs, as the price of the ETF is directly linked to the cost of physical gold. Investors can buy and sell shares of the ETF on the stock exchange just like they would with any other stock.
In Kenya, a gold ETF was introduced 2017 to the Nairobi Stock Exchange (NSE). So why invest in gold through Ndovu and not through the NSE? Let’s look at the reasons;
- Affordability and accessibility. The NSE requires investors to purchase at least 100 units to invest in their gold ETF. If gold trades at Ksh 1200 per ounce, one must fork out at least Ksh 120,000 to invest. However, at Ndovu, with as little as $50, you can invest in the gold fund, making it accessible to a broader range of investors.
- Competitive returns. If you invested in Ndovu’s Gold Fund in 2023, you would have earned 11.7% interest on the dollar at the end of the year. However, past performance is not a guide for future returns.
Sign up on ndovu today and take advantage of this golden opportunity to protect and grow your wealth. Consider the potential risks before investing, and speak with a financial expert if you need more guidance.
Disclosure: Ndovu is a regulated Robo-advisory platform operated by Ndovu Wealth Limited (‘NWL’). NWL is a Fund Manager licensed by the Capital Markets Authority (Kenya).
The information provided on this platform and the products and services offered are intended solely for persons in regions and jurisdictions where such distribution and utilization are in accordance with local laws and regulations. Ndovu does not promote its services in regions where it lacks the necessary licenses; It is exclusively available to persons residing in countries where it holds a valid license or has regulated partners. Ndovu does not extend its services to citizens of the United States, Canada, Japan, and other restricted territories.
Disclaimer: All ETF products are subject to risk, including country/regional, liquidity, and currency risks. Market prices of securities within the ETF may rise and fall, sometimes rapidly and unpredictably.
While ETFs provide diversification through exposure to a basket of securities, they do not eliminate the risk of loss. Diversification does not ensure a profit or protect against a loss. These are non-cis products and are registered by the SEC.
