We will discuss here gold exchange traded funds or Gold ETF
It is a popular investment in gold
This is also known as GETF
We discuss what you need to keep in mind while investing in it
We also discuss the features of gold ETF and its role in your investment portfolio
This discussion is an addition to our previous discussions on gold investments
Refer to our presentations on Sovereign Gold Bonds (SGB) and Gold Mutual Funds or Gold Funds
Please check out the links in the description section
Please also check out the playlist on gold whose links are provided in the description section
Gold ETF as the name suggests is an exchange traded fund or ETF
Like all ETF it also has an underlying which is gold bullion
This is similar to equity ETF where an equity index is tracked
In debt ETFs there is an underlying of bond index like the CPSE index for bonds
Like regular mutual funds, you can buy units
1 unit of gold ETF is equivalent to 1 gram gold of 99.5% purity
Like all ETFs, gold ETFs is listed on stock exchanges
They can be bought and sold during market hours
There is also no entry or exit load
There is a brokerage charge of 0.5-1.0%
When investing in gold through gold ETFs you need not bother about gold prices
The fund house is taking care of it
Gold ETFs work out better than physical gold such as coins and biscuits
You don't have to bother about security of storage, purity and loss of value during sale
Gold ETFs also give you the benefits you get from investing in gold
As we know, gold works well when there is economic and political uncertainty and high inflation
Do check out our video on this topic
When equity and debt investments don't perform well, gold investments tend to do well
In such times, gold helps provide a basic overall return from the portfolio of investments
Remember, gold investments shouldn't be more than 10% of your overall investments
This includes all investments such as gold ETFs, Sovereign Gold Bonds and Gold Mutual Funds
This is paperless investment and can be termed as e-gold
There are some differences gold ETFs have with gold mutual funds and Sovereign Gold Bonds
There is no facility for Systematic Investment Plan (SIP) like gold mutual funds or gold funds
In case you want to do regular investments in gold ETF, you need to make the effort yourself
Unlike a regular mutual fund option, you don't get dividends in gold ETF
Gold funds often invest in gold mining and gold trading companies and thus they can provide dividends
On the other hand, Sovereign Gold Bond provides you with an annual coupon payment
Gold ETFs are offered by leading fund houses
You can get access to gold ETFs through fund house websites and investment portals and apps
Gold ETF can act as a collateral for a loan
Like other mutual funds, gold ETFs allow small investors gain from gold even with a small investment
To start with gold ETFs, you need demat and online trading account
You need ID proof, address proof and PAN