Asian Share Market, Asian Stock Market

Gold ETF: Easy to manage; Solid Return

Investing in Gold has become hot favorite option now days. In ancient India, gold coins were used as currency. Gold is also considered as Universal economy indicator. The economy or the prosperity of a nation can be identified from the amount of gold the country possesses.

Since gold prices are volatile, but unlike stock market you don’t have to keep track of price movements minute by minute. Last year in domestic market gold prices have risen up to 18%. Gold is hedge against the dollar and inflation. In last one year equity and debt have given 11% and 10% return where as gold ETF has given 36% return.

Gold ETF

Gold ETF is Gold Exchange Traded Funds are mutual funds. Gold ETF are traded in stock exchange just like other stocks. In Gold ETF, each unit is approximately equal to price of 1 gm. You will have to a demat account before trading in gold. Gold ETF is classified under mutual fund and is taxed as per debt mutual fund taxation rules. ETF investors do not have to pay wealth tax. To name few business houses have launched ETFs are BenchMark Mutual fund, UTI mutual fund, Kotak Mutual fund, Reliance mutual fund. You invest in gold ETF mutual amount for bulk of amount or through SIP (systematic investment plan)

Benefits in investing in Gold ETF

• You can invest in gold ETF to accumulate gold as your children marriage plan.
• It is impossible to buy gold every month as a part of your investment plan in gold. Gold ETF provides you systematic planning to invest every month in gold.
• In gold ETF, you do not have go for the process to ensure the purity of gold. There are banks that offer certified gold, but they do charge around 15% for the coin you buy from bank.
• You can have a diversification in your investment portfolio.
• You can sell gold ETF either partly or fully just after 3 days from the purchase date.  You don’t have to bear any kind of wastage charges or labor charges when you go out to sell physical gold.
• Gold ETF ensures that the custody and quality of gold is consistent, and in line with international best practices.

Unlike physical gold, you don’t have worry about the security of the gold. All transactions happen in electronic mode, so there is no risk in case of unforeseen circumstances.

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