Four years for gold (ETFs) to get past the Rs 4,000-crore mark in (AUM)

gold funds, its much younger sibling, which invests in gold ETFs, have grown at frenetic pace and have accumulated net assets of over Rs 1,800 crore in just six months. The category itself came into existence only in the early part of 2011.

Gold funds have emerged as a favoured investment choice for those taking exposure to the yellow metal largely due to the convenience it offers . While investors must have a demat account to invest in gold ETFs, there is no such requirement for gold funds. Moreover, investors can do a SIP (systematic investment plan) with gold funds.

"It has become a huge hit with retail investors. Gold funds are acting as a catalyst for gold ETFs," says Lakshmi Iyer, head, fixed income and products, Kotak Mahindra MF. "The trend shows that investors have warmed up to gold funds," says Dhruva Raj Chatterji, senior research analyst , Morningstar India, an investment research firm.