Through centuries Indians have loved, treasured and invested in gold. They have been buying gold jewellery, coins and bars. In India, the metal has often been associated with social prestige as well. Financial advisors argue that one should invest a part of his/her portfolio in gold which offers a steadily appreciating value as well as a hedge against inflation.
Gold ETFs offer the advantage of taking the benefits of investing in gold without undertaking the hassles of handling the precious metal. One has to remember that a gold mutual fund is different from a gold ETF. But there is a small difference as well. Gold ETFs directly invest in gold while gold mutual funds invest in shares. One needs a demat account to invest in these ETFs.
Gold ETF August inflow the highest
Data from Association of Mutual Funds in India (AMFI) revealed that as much as Rs 6,134 crore have flowed into gold ETFs in 2024 so far. Inflow into gold ETF reached Rs 1,611 crore in August – the highest figure – after the government slashed import duty on the precious metal. Moreover, the assets rose by 8.5%, which was the highest among all passive funds.
AMFI data showed that net AUM (assets under management) in gold ETFs stood at Rs 37,390 crore in August 2024, which was at Rs 34,355 crore in June.
No need to lose sleep
“Gold ETFs are a brilliant substitute for physical gold. Unlike gold jewellery or coins and bars, you don’t have to lose sleep over storing them safely,” Prasunjit Mukherjee, investment strategist and CEO Plexus Management Services told News9live.
Investment strategist and director Wishlist Capital, Nilanjan Dey, said that Gold ETFs have emerged as the most preferred instrument for the modern investor to include gold in his/her portfolio.
SBI, HDFC, Kotak, Axis, Aditya Birla Sun Life, Nippon, ICICI Prudential, Invesco all offer gold ETFs. Experts say these ETFs are inexpensive, convenient and completely liquid which can be sold off easily to get cash.
No making charges in ETF
There is another big gain by investing in ETFs compared to gold jewellery. If you want to extract the value of jewellery and sell them, you will not get anything for the making charge component of the value of the jewellery, which can be as high as 30%.
Gold ETFs (exchange-traded fund) are becoming popular since they allow one to buy and sell gold in electronic form on a stock exchange. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
