Last month, in November, Indians invested around Rs. 1,482 crore had been invested. This is probably due to the volatility in the equity market. Earlier in October, gold ETFs traded at Rs. 1,961 crore and in September Rs. 1,233 crore was invested.
The trust of Indian investors in gold ETFs is constantly increasing, in such a situation if you are also thinking of investing in them, here we are telling you about gold ETFs…
ETFs are based on rising and falling gold prices A facility that buys gold like shares is called a gold ETF. Exchange Traded Funds are based on rising and falling gold prices. This is a mutual fund scheme. In this, gold is bought in units. By selling it you get not gold but the amount equal to the market price at that time.
This is a cheap way to invest in gold. It is bought in units. A demat account is required for ETFs. Gold ETFs can be bought and sold like shares on BSE and NSE.
5 Benefits of Investing in Gold ETFs
- You can also buy gold in small quantities: ETFs buy gold in units, where one unit is one gram. This makes it easy to buy gold in small quantities or through SIP (Systematic Investment Plan). While physical gold is usually sold at a tola (10 grams). Many times it is not possible to buy small quantity of gold while buying from a jeweller.
- Get Pure Gold: Gold ETF pricing is transparent and uniform. It follows the London Bullion Market Association, the global authority on precious metals. Different sellers/jewelers may offer physical gold at different prices. Gold purchased through Gold ETFs is guaranteed to be 99.5% pure, the highest level of purity. The price of the gold you buy will depend on its purity.
- There is no cost to make jewellery: Buying gold ETFs incurs a brokerage charge of 1% or less and a 1% annual charge for managing the portfolio. Even if you buy coins or bars, this is nothing compared to the 8 to 30% making charges that jewelers and banks pay.
- Gold is safe: Electronic gold is held in a demat account, paying only annual demat charges. Also there is no fear of theft. In addition to the risk of theft, physical gold also comes with security costs.
- Ease of Trading: Gold ETFs can be bought and sold instantly without any hassle. Gold ETFs can also be used as security for taking loans.
These gold ETF funds gave good returns
| Name of Fund | Returns in last 1 year | Returns in last 3 years | Returns in last 5 years |
| Nippon Gold ETF | 23% | 53% | 91% |
| SBI Gold ETF | 22% | 55% | 93% |
| Axis Gold ETF | 22% | 55% | 93% |
| ICICI Prudential Gold ETF | 22% | 56% | 89% |
| Birla Sun Life Gold ETF | 17% | 55% | 94% |
Reference: Grow, 9 December 2024
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
