1. Is a Gold ETF or Gold Mutual Fund better for investment? I noticed that many gold funds invest in their AMC’s gold in ETFs. Considering expense ratios, which option is more cost-effective? Can you recommend the best gold ETF or gold fund - Dev Kumar, Delhi
Gold ETFs and Gold Funds are both offered by Mutual Fund companies, each with distinct advantages. To invest in Gold ETF, one needs to have a demat account, while for Gold Fund, that is not needed. Gold ETFs allow investors to take positions during the intra-day price movements of gold (assuming ETF tracks the prices with reasonable volumes). Gold mutual funds are open-ended investments, based on the units provided by the gold ETF. Gold funds offer SIP options at scheme level. For Gold ETFs, SIP availability would largely depend on the exchange member or service provider.
Gold ETFs have lower expense ratios as compared to Gold funds.
Rather than saying Gold ETFs are better based solely on expense ratios, investors should decide between Gold ETFs or Gold funds after considering all features and their personal investment needs.
2. I have held my Ola shares since listing, but they are now showing a 47% loss. What should I do? Is there any recovery potential if I hold for the long term? – Vivek Mohan, Bengaluru
Ola has been facing regulatory challenges in recent months. Furthermore, its net loss widened by 50% to Rs 564 crore in the October-December quarter from Rs 376 crore a year earlier, primarily due to intensified competition and after-sales service challenges. Despite these issues, the company maintains the No. 1 position in market share at approximately 30%, though this represents a significant decline from around 50% last year.
On the positive side, Ola is aggressively expanding its store network from 800 to 4,000 locations and plans to introduce four new motorcycles and a third-generation scooter. While the near-term outlook remains muted, the stock may recover in the medium-term based on broad market revival, particularly if the company succeeds in reducing losses and maintaining market share. For long-term electric vehicle exposure, however, consider established players like TVS Motor and Bajaj Auto, which offer wide distribution networks and proven customer service capabilities backed by strong cash flow.
3. I have Rs 100,000 to invest during the current market dip. Would you recommend small-cap or mid-cap shares at this time? – Seema Kaushal, Pune
The current market faces uncertainty, with US policy decisions impacting global stock prices. While the unexpected pause on reciprocal tariffs by the US is positive for the stock market, the global economy continues to face challenges. Fortunately, the impact on India is forecast to be limited compared to other countries. Nevertheless, investors should remain cautious despite the relative strengths of the domestic economy.
Our recommendation is to adopt an accumulation strategy primarily focused on large-cap companies, supplemented by quality mid-caps. We suggest emphasizing pure-play domestic themes that are less vulnerable to external factors, such as banks, consumer goods (FMCG & Durables), hospitals, transportation, infrastructure, cement, etc. These sectors are likely to show stronger recovery when market conditions stabilize.
