Synopsis
What are Gold ETFs?
Gold ETFs, or exchange-traded funds, are investment vehicles that allow investors to gain exposure to the price of gold without the need to physically purchase or store gold. These funds are traded on stock exchanges, similar to stocks, and their value is determined by the performance of the gold market.
Advantages of Gold ETFs over Physical Gold
- Zero storage costs
- No worries about purity
- No making charges
- No risk of theft
Gold ETFs offer several advantages over physical gold, including zero storage costs, no worries about purity, and no making charges. Additionally, investors can track gold prices at a low cost and gain exposure to the yellow metal as an asset class.
Investing in Gold: Returns and Portfolio Diversification
Gold has provided strong returns over the past decade, with an average annualized return of 12.26% over the past 10 years. Investors can diversify their portfolios by allocating a small percentage to gold, which can act as a hedge against inflation and market volatility.
How to Invest in Gold
Investors can invest in gold through various channels, including gold ETFs, mutual funds, and exchange-traded funds (ETFs). Gold ETFs are a popular choice for investors who want to gain exposure to the price of gold without the need to physically purchase or store gold.
Popular Gold ETFs
- SPOT Gold ETF
- Sonata Gold ETF
- Edelweiss Gold ETF
How Many Gold ETFs Are There?
There are currently 20 gold ETFs available in India, managing assets worth Rs 58,887 crore. These funds have attracted over 7 million investor folios.
Investment Tips
Investors should stagger their purchases of gold, buying on dips or through systematic investment plans (SIPs). Those who already hold gold in their portfolios can consider rebalancing their allocation to maintain a 10% gold allocation.
Conclusion
Investing in gold through gold ETFs can be a great way to gain exposure to the price of gold without the need to physically purchase or store gold.
