What are gold mutual funds?

Gold mutual funds are funds that pursue capital gains by investing in equity of companies that are engaged primarily in the mining, processing and distribution of precious metals. Gold mutual funds typically invest in foreign and domestic companies.

Gold mutual funds are managed by professional companies that research the merits of investing in particular companies and monitor clients' portfolios regularly. Gold funds are typically assigned to a company's precious metals category and are considered a riskier investment than traditional, diversified funds. Gold mutual funds are one of three basic choices for investors interested in gold; the other two are individual equities and gold bullion investments.