Gold, Silver Funds Soar 212% in a Year: What Investors Need to Know

• Gold and silver funds, particularly silver ETFs, have delivered exceptional returns of up to 212% in the last year, significantly outperforming equity funds.
• Precious metals have transitioned from a niche investment to a major source of portfolio returns, driven by safe-haven demand, geopolitical uncertainty, and industrial demand for silver.
• Experts recommend a strict asset allocation approach, capping precious metal exposure at 5-10% of the overall portfolio for diversification and as a hedge against inflation and volatility.
• Investors should exercise caution at current record-high prices, considering systematic investment over lump-sum, and potentially booking partial profits if exposure exceeds target levels.
• Indian retail investors have limited direct options for global commodity exposure, primarily through LRS or fund-of-funds structures that invest in commodity-linked companies, with tax implications similar to debt funds.

Why It Matters: Precious metal funds delivered massive returns, but investors should maintain limited, strategic exposure due to high valuations.