In place of buying physical gold, you could buy Gold ETFs, which offer more advantages than physical gold. They are easy to sell, they are held in electronic form and there's no question of theft. Also, there's no need to invest in a locker and it tracks gold prices...so returns are like gold. Here are 5 gold ETF's/Funds that you could consider. We recommend buying Gold ETFs, only if you want to diversify. Gold prices have slumped this year in 2017 and with it gold ETFs. So, you need to be a little cautious before investing, though you are now getting some of these ETFs at rock bottom prices.
SBI Gold ETF
SBI Gold ETF is one of the top gold ETFs in India with substantial assets under management. The fund tracks gold prices and has generated a negative return of 15 per cent in the last one year. Now remember, you are getting this exchange traded fund at a staggering 15 per cent lower than what it was exactly a year back. This is one gold ETF that is well managed and has the potential to generate returns. Excellent hedge against inflation and extremely liquid. Go for it with a long term perspective in mind.
Motilal Oswal MOSt Shares Gold ETF
MOSt Gold Shares allows investors for the very first time to directly buy gold from an asset management company. An investor can buy Gold ETFs from the stock exchange and then redeem the same for physical gold bars as lows as 10 grammes. In short, exchange your ETFs for physical gold anytime. The gold ETfs have given negative returns for investors in the last one year, but have the potential to rally should gold prices gain ground. The one year returns from the god ETF is about negative 6.1 per cent. This means in the last one year there has been destruction of capital.
IDBI Gold ETF
IDBI Gold Exchange Traded Fund is an open ended gold exchange traded scheme which tracks the price of gold in the domestic market. Each unit of IDBI Gold ETF is backed by 24 carat gold of 99.5% purity and will be held by a custodian. The Fund has generated a negative return of 15.4 per cent in the last one year, thanks to the huge decline in the prices of gold that we have seen. As mentioned earlier, should gold prices rally they have the potential to gain. The one advantage for buyers is that they are getting the ETF at prices which are much lower than they were a year back.
Kotak Gold ETF
Kotak Gold ETF is an open-ended Exchange Traded Fund, which invests in physical gold and endeavors to track the domestic spot price of gold as closely as possible. Thus it provides an option to invest in gold without taking physical delivery of gold. Each unit of the KGETF is approximately equal to 1 gram of gold. The one year returns from the ETF has been poor and in fact very bad at negative 16 per cent. The one reason that we believe that gold ETFs could be good is because prices are now low.
Axis Gold ETFs
Axis Gold ETFs will allow you gold purity of 99.5% at prevailing market prices without premium charges. An excellent hedge against inflation. The fund has generated a return of negative 18 per cent in the last one year. Again, we are recommending this ETF is because you are getting it at rock bottom prices. Buy the ETF if you believe that gold prices would rally in the next one year or so.
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