Gold Exchange-Traded Funds (ETFs)
The Gold ETFs offer an alternative to buying gold the old-fashioned way without having to worry about its holdings. Similar to mutual funds
it requires investors to create a Demat account and hold their gold units in a dematerialized form
Depending on the variety of funds a gold ETF’s unit may be 0.01 grams or anywhere between 0.5 and 1 grams
Accessibility:
Fund houses provide gold ETFs which are traded on markets including the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) It can be purchased by investors directly or through a stockbroker, much like shares
Credibility:
Because 24 karat actual gold is completely backed by gold ETFs there is little risk involved
If you want to invest through a brokerage company, the stock market gives it more legitimacy
Tenure:
Gold ETFs are liquid and have no set tenure however certain mutual fund companies provide investors the choice to redeem in actual gold
Although it seems like a nice alternative, it is typically impossible with a quantity of less than 100 grams Only during trading hours are the quotations available for trading
Cost:Â
There are no entrance or exit costs the brokerage fees are paid each time you make a trade. The yearly cost of owning a gold ETF or the management fee may be assessed if you invest through the fund house The cost range for all the assets is mostly between 0.35% and 1% yearly
Maintenance:
Since it’s in your Demat account there are no storage or insurance fees to pay
Taxation:
The goods and services tax does not apply to gold ETF Just any capital gains made by selling the ETFs must be taxed by investors
Upside:
ETFs that track gold can be used as collateral for loans
With gold ETFs investors are unable to obtain gold loans.
Because of their liquidity ETFs are ideal for any investor with medium- or short-term investing intentions
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