Last month i.e. in November, Indians invested about Rs 1,482 crore in Gold ETFs. Probably this happened due to volatility in the equity market. Earlier, there was investment of Rs 1,961 crore in Gold ETF in October and Rs 1,233 crore in September.
The confidence of Indian investors in Gold ETF is continuously increasing, in such a situation, if you are also planning to invest in it, then here we are telling you about Gold ETF…
ETFs are based on rising and falling gold prices The facility of buying gold like shares is called Gold ETF. Exchange traded funds are based on the rising and falling prices of gold. This is a mutual fund scheme. In this, gold is purchased in units. By selling it, you do not get gold but an amount equal to the market price at that time.
This is one of the cheapest ways to invest in gold. It is purchased in units. Demat account is required for ETF. Gold ETFs can be bought and sold on BSE and NSE like shares.
5 benefits of investing in gold ETF
- You can buy gold even in small quantities: Through ETF, gold is bought in units, where one unit is of one gram. This makes it easier to buy gold in small quantities or through SIP (Systematic Investment Plan). Whereas physical gold is usually sold at the price of tola (10 grams). Many times it is not possible to buy gold in small quantities when buying from a jeweler.
- 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 can offer physical gold at different prices. Gold purchased through Gold ETFs is guaranteed to have 99.5% purity, which is the highest level of purity. The price of the gold you buy will be based on its purity.
- The cost of jewelery making is not covered: There is a brokerage of 1% or less for buying gold ETFs, plus a 1% annual charge for managing the portfolio. This is nothing compared to the 8 to 30% making charges that jewelers and banks have to pay, even if you buy coins or bars.
- Gold remains safe: Electronic gold is held in a demat account, in which only annual demat charges have to be paid. Also there is no fear of theft. Apart from the danger of theft in physical gold, one also has to spend on its security.
- Ease of Doing Business: Gold ETFs can be bought and sold instantly without any hassle. Gold ETF can also be used as security for taking loan.
These gold ETF funds gave good returns
| Fund Name | 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% |
Source: Grow, 9 December 2024
Graphics Source: VaskarAssets
