Gold mutual funds are investment vehicles that allow investors to pool their money together in order to invest in gold. Gold mutual funds typically invest in gold mining companies, but can also invest in other companies that are involved in the gold industry, such as jewelers and refiners.
Gold mutual funds operate much like other types of mutual funds. Investors pool their money together and the fund is then used to purchase shares of gold mining companies or other companies involved in the gold industry. The fund’s managers will then attempt to grow the fund through a combination of dividends, share price appreciation, and new capital inflows.