Gold Exchange Traded Funds (ETFs) are simple investment products that combine the flexibility of stock investment and the simplicity of gold investments. ETFs trade on the cash market of the National Stock Exchange, like any other company stock, and can be bought and sold continuously at market prices.
Gold Etfs :
#Gold ETFs have gained a lot of importance over the last decade. Gold Exchange Traded Funds first began in Australia in 2003 when the Gold Bullion Security started. Since then many countries including India have launched Gold ETFs. The first Gold ETFs in India was initiated in February 2007. A Gold ETFs is an instrument that is based on gold price or invests in gold bullion. It is traded on major stock exchanges, and Gold ETFs track the gold bullion performance.
#Gold ETFs are passive investment instruments that are based on gold prices and invest in gold bullion. Because of its direct gold pricing, there is a complete transparency on the holdings of an ETF. Further due to its unique structure and creation mechanism, the ETFs have much lower expenses as compared to physical gold investments.
# 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 Top 3 Gold ETF’s that you could consider. We recommend buying Gold ETFs, only if you want to diversify. Gold prices which had slumped this year have recovered, though returns have been modest.
How to invest in gold ETFs :
Steps in buying Gold ETF (Through an Online Trading Account)
Step 1: Open an online trading and demat account with a stock broker
Step 2: Log in to the website of the broker’s online trading portal using your login ID and password.
Step 3: Choose the Gold ETF you want to invest in
Step 4: Place the buy order for the purchase of a specified number of Gold ETF units
Step 5: Web system debits your bank account (Fund transfer through linked savings account)
Step 6: Units are credited to your demat account on trade day + 2nd day
Gold ETF charges
Even though there are no entry or exit charges in gold ETF, there are three costs associated with them. One, is the expense ratio (for managing the fund) which is generally lower compared to other mutual funds and is around 1 percent. Second, is the broke cost that needs to be accounted for every time you buy or sell units. Third, which technically is not a charge but impacts returns is the tracking error. It arises because of the fund’s expenses and cash holdings thus not mirroring actual gold prices.
Why gold ETFs are a good investment :
Thinking about the Indian inclination for putting resources into gold, ETFs are a decent prospect if your aim is just to put resources into gold and not have the yellow metal as decoration. On the off chance that you are an ordinary financial specialist in money markets, there are a few reasons why you should consider gold trade exchanged assets nearby your normal value portfolio. Give us a chance to investigate a portion of the key components:
- Gold is a support against expansion and money changes, and is commonly viewed as a sheltered venture.
- Putting resources into gold ETFs is more helpful than putting resources into physical gold. You don’t need to stress over secure capacity or extra installments, for example, making charges or locker charges.
- You can purchase and move gold ETFs through your stockbroker at any cost, at whatever point you might want to. Wherever you live, gold ETFs will give you similar returns, dissimilar to physical gold which could have diverse costs in various states.
- You can utilize gold ETFs to broaden your portfolio and make it more grounded. Amid unstable market circumstances, broadening diminishes the dangers of exchanging, and anticipates overwhelming misfortunes.
- You can utilize your gold ETFs as insurance security for credits.
Top Gold ETFs ( As on 14th October, 2018)
|Gold ETF Name||YTD (%)||TER(%)||NAV(Rs)|
|Axis Gold Exchange Traded Fund||9.45||1.11||2782|
|IDBI Gold ETF||9.03||0.58||2943.71|
|UTI Gold Exchange Traded Scheme||8.06||1.09||2815.93|
|Canara Robeco Gold ETF||7.89||0.8||2895|
|Kotak Gold Exchange Traded Scheme||7.73||1||277.19|
|HDFC Gold Exchange Traded Fund||7.64||1.09||2885.84|
|Aditya Birla Sun Life Gold ETF||7.54||1.03||2925|
|Reliance ETF Gold BeES||7.13||1.18||2813.37|
|Quantum Gold Exchange Traded Scheme||6.63||1.03||1394.99|
|YTD is returns Year Till Date : TER is Total expense ratio|
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- How To Invest In Gold ETFS?
- Best Gold ETFS To Invest
- How To Choose Best Gold ETFS?
- Aditya Birla Sun Life Gold Fund
- SBI Gold Fund Reliance Gold Savings Fund
- Kotak Gold Fund
- ICICI Prudential Regular Gold Savings Fund
Why Should you be Investing in Gold ?
- High Demand
- Inflation Hedge
- Risk Averse
# To invest in gold ETF, you need to have a Demat account and an online trading account. To open an account, you would require a PAN Card, an address proof and an identity proof. After the account is ready, you can choose a Gold ETF and place an order. Once the trade is executed a confirmation is sent to you in your account. A small fee from the fund house and the broker is charged when one buys or sells these Gold ETFs.
# Gold Etfs Schemes :
- Birla Sun Life Gold ETF
- Goldman Sachs Gold ETF
- Religare Invesco Gold ETF
- Quantum Gold Fund
- SBI Gold ETF
- IDBI Gold ETF
- Axis Gold ETF
- Kotak Gold ETF
- ICICI Prudential Gold ETF
- UTI Gold ETF
- HDFC Gold ETF
- Can Gold ETF