Gold ETFs and mutual funds offer exposure to gold's long-term stability as well as greater liquidity and diversification than physical gold and individual gold stocks. There are many types of gold funds.

Gold mutual funds such as Franklin Templeton's Gold and Precious Metals Fund are actively managed by professional investors. The objective of these funds is to outperform passively managed index funds in terms of returns. To compensate, they charge relatively high expense ratios.

As with gold stocks, investors are not buying gold but rather paper that is theoretically backed by mining company debt or equity or by futures and options contracts on physical gold. Therefore, gold mutual funds and exchange-traded funds may not always track the spot price of gold, and these investments may not perform as well as physical gold.

Many investors choose Gold ETFs or gold mutual funds because they offer an easy way to benefit from gold without the hassle of owning it physically. Gold ETFs are listed on stock exchanges and can be traded throughout the day, giving investors flexibility and quick access to their money when needed. Their prices generally move in line with the value of gold. Gold mutual funds are slightly different because they are professionally managed and often invest in a mix of Gold ETFs, gold-related businesses, or mining companies. These funds are well suited for people who prefer long-term investing and want experts to manage their investments. Both options can add stability to a portfolio, especially during periods of market uncertainty or rising inflation. Before investing, it's important to compare costs, risks, and potential returns to choose the option that best aligns with your financial objectives and risk tolerance.