Do you ignore buying gold ETFs, simply because you do not understand the word "ETF". There is absolutely no difference between buying a gold ETF and an equity share. You buy them from the stock markets, just like you buy shares.
Why you need to buy gold ETFs?
You need to buy gold ETFs for a number of reasons. The first is that when share prices fall, gold rallies and if gold rallies, so do gold ETFs, which track gold prices. If there is an economic crisis or political tensions, equity shares will come crashing down, while gold will gain, providing you a hedge. After the Lehman Brothers crisis gold prices multiplied 3 times in 5 years. The other good thing about Gold ETFs, is that you can sell whenever you want and they are very liquid.
Since you are holding gold in electronic form, there is no question of theft and no storage costs. Here are 7 best Gold ETFs to invest in.
UTI Gold ETF
UTI Gold ETF has given returns of almost 18.5 per cent in the last one year. This is better than most investments, including bank deposits.
UTI Gold ETF tracks gold prices. So, when gold prices climb the price of UTI Gold ETF will climb. As mentioned earlier, if share prices crash, gold will rally, so it good to buy Gold ETFs.
You can buy the same from the NSE and BSE, just like you buy shares. Or talk to your broker, who will help.
SBI ETF Gold
This Gold ETF has given slightly lower returns than UTI Gold ETF. The returns are slightly lower at 18.3 per cent, in the last one year since Sept 18, 2015.
If you buy gold coins and gold biscuits, you are always worried of theft.
Since Gold ETFs are in the electronic form, you should buy them, as there is no worry of theft.
These are much better than buying physical gold.
GS Gold BeES
GS Gold BeES is the biggest gold ETF in the country.
The fund has given the best returns after UTI Gold ETF of 18.4 per cent in the last one year.
If you are looking at long term investments in gold, this would be an ideal fund to invest in.
Gold ETFs are taxed in the same way as physical gold.
Long term capital gains applies after 3 years and short term capital gains below that.
IDBI Gold Exchange Traded Fund
This fund has given returns of 18.4 per cent in the last one year and remains the best performer. The returns on each ETF differ only marginally, as they all track gold prices. You can buy this ETF either from the NSE or the BSE.
You can hold these ETFs, for however long you wish, just like shares. They are all open ended schemes where you can buy and sell freely.
R Shares Gold ETF
This was earlier called Reliance gold ETF. This is the second largest Gold ETF, in terms of assets under management. The fund has generated a returns of 17.6 per cent, which is not really the best when compared to peers.
It tracks Gold and you can sell the Gold ETF anytime, as there is good demand and supply.
Kotak Gold ETF
This is one more Exchange Traded Fund that tracks gold prices. This again tracks the physical prices of gold. The last one year returns of this fund is 18.2 per cent, which compares well with some other peers.
Again, this is an open ended fund and you can buy and sell very easily. The Gold ETFs like others is listed on the exchanges, where you can buy and sell them whenever you want.
HDFC Gold Exchange Traded Fund
This fund has given returns of 17.9 per cent, which is lower than most of its peers. The assets under management is close to Rs 700 crores.
Gold ETFs are risky like most other investments. Investors should exercise caution. Greynium Information Technologies, its subsidiaries, associates and author do not accept culpability for losses and/or damages arising based on information in this article.