If you're interested in purchasing gold through gold mutual funds, we can't say we're surprised. The yellow precious metal is enjoying one of its greatest breakouts of the past century.
After several attempts to make a sustained run above the $2,000-per-ounce mark over the years, it finally broke through in 2024, then sailed past the $3,000 mark earlier in 2025. More recently, it cleared the $4,000 price level.
That's roughly a doubler in less than two years' time, and nothing generates more new-investment buzz than an all-time heater.
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Today, we'll point you toward some gold mutual funds we think are worth further consideration. Each has accumulated billions of dollars' worth of assets because of their ability to allow investors to participate in the commodity's rise.
But we're also going to explain why, in several circumstances, you might want to go in another direction for your gold exposure.
Why would you invest in gold?
Gold has long been considered a defensive investment, for numerous reasons. As I've written before, gold's allure in everyday scenarios can largely be tied to two characteristics:
Low correlation to stocks: The metal historically provides low to zero correlation with stocks, which makes it a potent source of portfolio diversification. That's why financial experts frequently say you should buy gold, but to limit it to about 5% to 10% of your assets.
Hedge against inflation: This is more a "perceived" characteristic. The theory goes that because gold is priced in U.S. dollars, inflation is actually a positive for gold. That's because as the dollar itself is worth less, gold becomes more expensive compared to dollars.
But as Kiplinger contributor Dan Burrows writes, reality often doesn't match the hype: "Even gold's reputation as an inflation hedge isn't all that great. Historically, at least, gold returns have only kept up with inflation over the long haul; the metal hasn't outperformed. Over the short and medium term, gold's record as an inflation hedge is generally pretty poor."
And in extreme-case scenarios, gold's tangible nature makes it an appealing holding during periods of chaos.
Indeed, in explaining gold's current parabolic run, BofA Global Research writes that "economic uncertainty and global instability have boosted the appeal of precious metals, leading to both investors and central banks increasing gold reserves."
None of that speaks to buying gold right this second — we'll defer to the experts on that front.
Why buy gold mutual funds?
The average person buying gold for investment purposes simply doesn't need the hassle inherent to purchasing physical gold.
You have to find a dealer, transport that gold, purchase appropriate safe storage, insure it (you don't have to, but it's a good idea), then find someone to take that gold off you when you want to sell.
By the way, you may also pay a markup when you buy physical gold and get a little less than its worth when you sell, so there's financial inefficiency to deal with, too.
Gold mutual funds, on the other hand, are as easy to buy and sell as … well, other mutual funds. Open up your brokerage account, click your mouse a few times, log off, have a sandwich.
But should you buy gold mutual funds?
Let's quickly look at a trio of names in the space. Two are among the largest such mutual funds, while the third is a smaller but established and well-respected product.
Fidelity Select Gold Portfolio
- Fund category: Equity precious metals
- Assets under management: $3.6 billion
- Yield: 1.6%
- Expense ratio: 0.68%, or $68 annually for every $10,000 invested
- Sales charge: N/A
- Minimum investment: N/A
The Fidelity Select Gold Portfolio (FSAGX) invests in more than 50 gold stocks – primarily gold exploration, mining and processing companies, but also a few royalty companies that own royalty streams to various projects.
Virtually all its holdings deal primarily in gold, but several also have operations involving silver, copper, platinum, diamonds and other commodities.
FSAGX is predominantly international in nature, with nearly 80% of its assets allocated in Canadian firms, including top-10 holdings Agnico Eagle Mines (AEM), Franco-Nevada (FNV) and Wheaton Precious Metals (WPM).
American firms make up less than 10% of assets, and most of that is concentrated in Colorado-based Newmont (NEM). None of this is abnormal — many gold mining funds are built similarly.
It's hard to beat Fidelity mutual funds on price, and that's certainly the case with FSAGX, on several fronts. Not only are its annual fees low, but it has no required investment minimum, and unlike many of its peers, it has no front-end sales charge.
Fidelity Select Gold currently garners a Bronze Medalist rating, Morningstar's forward-looking assessment system. But it's worth noting that its historical returns have been middling compared to the category, and it's under relatively new management, with Boris Shepov taking the reins in late 2024.
Learn more about FSAGX at the Fidelity provider site.
OCM Gold Fund Investor Shares
- Fund category: Equity precious metals
- Assets under management: $173.3 million
- Yield: 1.0%
- Expense ratio: 2.38%
- Sales charge: 4.5% maximum, reduced on a tiered scale based on size of initial investment
- Minimum investment: $1,000
OCM Gold Fund Investor Shares (OCMGX) is a much smaller gold mutual fund with a focus on mining companies that's similar to FSAGX. Its 50 holdings are largely gold producer stocks such as Agnico, Alamos Gold (AGI) and Lundin Gold (LUGDF).
However, it does have some exposure to pure-play exploration-and-development stocks, a few silver "primaries" (silver is their primary metal, but they also deal in gold) and a high-single-digit weighting to cash.
OCMGX might have a fraction of the Fidelity fund's assets, but it's an accomplished product. Its performance over the trailing 10- and 15-year periods is within the top 3% of its peers. And it earns a Silver Medalist rating for its strong management team and investment process. The minimum investment, at just $1,000, is extremely reasonable for a mutual fund, too.
Its major drawback is costs. "Despite its strengths, its fee remains a consideration, as it is priced within the most expensive quintile among peers," Morningstar says. On top of that, it has a maximum sales charge of 4.5% — that's 4.5% of your investment that's immediately taken out to pay OCM.
We typically don't highlight funds with sales charges, but as far as gold mutual funds are concerned, there aren't many options that don't feature sales charges for everyday retail investors.
Learn more about OCMGX at the OCM provider site.
First Eagle Gold Fund A Shares
- Fund category: Equity precious metals
- Assets under management: $4.9 billion
- Yield: 2.7%
- Expense ratio: 1.16%
- Sales charge: 5% maximum, reduced on a tiered scale based on size of initial investment
- Minimum investment: $2,500
First Eagle Gold Fund A Shares (SGGDX) is the largest gold-specific mutual fund by assets, amassing almost $5 billion in AUM over its 30-plus years of trading.
The majority of SGGDX's portfolio looks just like the other two funds, with more than 75% of assets invested in a tight portfolio of 22 miners such as Wheaton, Agnico Eagle and Kinross Gold (KGC).
Where SGGDX stands apart is its modest 11% and 8% allocations to gold and silver bullion, respectively. (The remainder is in cash.) That means you're getting at least a little direct access to the price of gold … though that's also being somewhat muddied with the direct exposure to silver.
Performance has been mixed, with First Eagle's fund outperforming its category over certain periods but underperforming over others.
But looking forward, Morningstar awards SGGDX a Gold Medalist rating, lauding its low volatility exposure and high yield exposure, and also expressing optimism about leadership remaining intact amid a majority investment from Genstar Capital.
Learn more about SGGDX at the First Eagle provider site.
Why you might want to consider gold ETFs instead
You likely noticed that all three gold mutual funds above are built around gold mining stocks.
That's not necessarily bad, per se – it's just one type of gold exposure. Specifically, you're not just investing in the price of gold itself, but also these companies' ability to make money off the price of gold.
Because there's an additional layer of speculation and uncertainty there, gold miners tend to trade in a more exaggerated fashion than gold – that is, if gold rises, gold miners often rise further, and vice versa.
To wit? As I write this, the price of gold is up nearly 60% year to date. FSAGX has delivered a total return (price plus dividends) of 122%.
But mutual funds largely limit you to this kind of exposure; it's rare for mutual funds to, say, actually hold bullion (let alone provide only that kind of exposure) or trade in gold futures. Moreover, gold mutual funds tend to be fairly expensive and often require retail investors to pay onerous sales charges that immediately impact performance.
If you have the option of investing in exchange-traded funds (ETFs), gold ETFs can be an ideal choice.
Not only do the market's best gold ETFs represent a much wider array of strategies, but they also never have sales charges, expenses are generally lower than gold mutual funds, and the investment "minimum" is just one share (or less if your brokerage offers fractional shares).
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