Are Gold ETFs the right investment for you

Are Gold ETFs the right investment for you

As India is a deeply religious country with a very old culture and set of traditions, we have been using gold ornaments since ancient times as a part of our culture. Due to this, we have a lot of investment in gold. Mostly this investment is in the form of jewellery and coins. In fact itd be difficult to find someone in India who hasn’t so far looked up things like today gold rate in Hisar or wherever they may live before going on to buy the gold.

Nowadays there are some extraordinary advantages to investing in Gold ETFs. This portfolio is a new way to invest in gold. It was started by SEBI (Securities and Exchange Board of India) in 2007. This investment scheme can be bought from any broker or distributor who provides the NSE platform.

What is it?

Gold ETF is an exchange-traded fund, which can be bought and sold in small quantities. These are the most liquid and easily accessible forms of investment, making them perfect for starting investors.

Advantages:

  • It can be bought and sold in small quantities and it is the most affordable way to invest in gold / 
  • Gold ETFs are ideal for investors who have a limited sum to invest at one time. These investors can buy gold in the smallest quantity of 1gm. Gold ETFs provide a better alternative to physical gold, as they are easier and safer to store, without the risk of theft or damage.
  • No additional costs such as insurance or security costs are involved in investing in gold ETFs. However, it is important to remember that there is a management fee involved in investing in Gold ETFs, which does not exist with physical gold.
  • Gold ETFs are open-ended funds and you can buy more units during a dip in price and sell units during a rally in prices which helps you benefit from volatility in the prices of gold. On the other hand, if you are buying physical gold, you have to buy or sell only when prices are favourable to you. However, both these ways require that you be constantly aware of metrics such as today gold rate in Bhagalpur or Kanpur so that you don’t miss out on any opportunities. Click here to learn more.
  • You can buy at international rates without any markup from any dealer or financial institution. Another major advantage of ETFs over physical gold is that it is very cost-effective. If you want to sell physical gold, you have to pay a premium to the dealer – even then it can be hard to find a buyer for your jewellery.
  • ETFs are excellent and convenient for long term holding. ETFs are backed by actual physical gold bullion, which is stored in vaults by the fund sponsor. However, unlike physical gold, ETF gold does not suffer from problems of theft and transport, which can be a problem for larger quantities of physical gold. ETF gold can also be sold on the stock market at any time just like shares.
  • Buying ETF is extremely convenient. Trading takes place on a stock exchange which is open during regular business hours. You buy and sell shares of the ETF like you would any other stock, through a brokerage account or directly from the company that sponsors the fund.
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