Across the globe there has always been an increasing trend to buy Gold ETFs. For example, SPDR Gold Trust and its associate companies are among the largest Gold ETFs in the world.
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What Are The Advantages of A Gold ETF Over Physical Gold
A Gold ETF is nothing but a mutual fund unit, that tracks the price of gold. What this means is that one unit of Gold ETF is equal to one gram of gold. If gold prices move up, then Gold ETFs move up.
The advantages of Gold Exchange Traded Funds over physical gold are plenty. Since the former is held in electronic form there is no question of theft. On the other hand you do not need to incur bank locker charges for them. Ancillary charge like buying costs may also be lower.
Hence, they are more advantageous, than physical gold. And after all, they track prices of gold, so ultimately you are getting the same price.
Where To Buy Gold ETFs in India?
First, you need to open a demat and a trading account with your broker. Once you have opened the same, you can buy them in the same manner as you buy shares and stocks. There are a number of them that you can buy. Here goes the list:
|Name||One Year Returns|
|SBI Gold Exchange Traded Fund||-10.20%|
|UTI Gold Exchange Traded Fund|| |
|HDFC Gold Exchange Traded Fund|| |
|Kotak Gold ETF|| |
|Axis Gold ETF|| |
|Quantum Gold ETF||-10.30%|
|Can Gold Exchange Traded Fund||-10.40%|
|IDBI Gold Exchange Traded Fund|| |
The above list is not exhaustive as there are many other funds. The returns are more or less indicative and as can be seen from the list the returns from Gold ETFs have been negative in the last one year, because gold prices itself have declined in the international markets.
Before investing in these instruments it's best to try and figure out where gold would be headed in the next few years, because Gold ETFs tend to track prices of physical gold.
At the moment it is unlikely that you would get returns from gold, as investors are increasingly preferring investment in equities.
However, gold is considered a safe haven investment and could be a good bet in times of crisis. It's not a bad idea to partially stay invested in gold. However, do not expect stupendous returns unless there is geopolitical tensions or an economic calamity around the globe.