Good decision… to invest in Gold ETFs rather than physical gold, but make it BEST n BEST by making selection from the suggested list of top ranked, leading, & reliable Gold ETF Funds in India.
People in India, are mostly preferred to invest money in Gold. Here investors think that money, which they put in purchasing of such glittering metal – GOLD, shines forever and give them stable, shining returns. Even in recent past, gold has proven to be a strong supporter against inflation also in equity market downturns. No wonder that gold has been much better than equity or other investments…still there are some risk like you need safe storage to keep gold coins or jewelries safe. And most importantly, you might be victim of fraud at time of purchasing physical gold. Are you ready to bear such risks? No, so why not try Gold ETFs also known as paper gold? Investing in gold ETF gives the advantage of liquidity and marketability, which are a drawback of owning physical gold. Being liquid, gold ETF can be traded in any time during market hours and being marketable, it can be traded for any amount in it just like a common stock. It also provides short selling and buying on margin benefits. Moreover owning gold ETF is cheaper compared to the physical gold, as it has no cost of carry means the cost of hoarding physical gold.
Now if you make your mind for investing in Gold ETFs, then just go through the article to go for the Best Gold ETF Funds in India.
Introduction to Exchange-Traded Funds
Gold exchange-traded fund (ETF) was launched in 1993. Ever since, ETFs have continued to grow in popularity and gather assets at a quick pace. To understand ETFs, simply think of them as mutual funds that trade like stocks. And of course, trading like a stock is the main aspects that make ETFs so popular, mostly with professional investors as well as individual investors who are active traders. Gold ETFs invest in physical gold of 99.5 per cent purity, among which 90-100 per cent in physical gold sourced from the RBI approved banks and 0-10 per cent in debt instruments. That’s why Gold ETF returns are generally in line with the values of physical gold.
ETFs can be bought on margin and sold short as well as they also let you to control risk by trading futures and option just like a stock. ETFs can be more tax-efficient in comparison of mutual funds as most of the tax on capital gains is paid on sale and totally up to the investor. Key advantage for investing in an index ETF is that you can sell and buy at real-time prices instead of waiting for the closing of the day to determine the price.
Gold ETFs can be bought and sold in a stock exchange just like NSE or BSE or regular stocks. If you are interested to invest in Gold ETFs, you require a Demat account and a trading account through a stock broker. Another best thing is that investor can invest in Gold ETF very easily online, by having an online trading account with any broker. Trading in Gold ETF is really easy – as simple as trading in a stock; one can buy at any time, and sell at any time with access to an online trading account.
The World’s first Gold ETF was launched in Australia in March 2003 and in United States, the first Gold ETF was launched in 2004. But actually, the idea was originated in India way back in 2002. Now, there are hundreds of ETFs available, and they cover all major index and sector of the equities market. You have choice among international ETFs, regional ETFs as well as country-specific ETFs. Even, specialized ETFs cover particular industries like technology, biotech, energy and market niches (REITs, gold). For India, here we put a list for the best ones:
SBI Gold ETF
SBI Gold ETF is one of the top gold ETFs in India having large assets under management. This is considered as an excellent hedge against inflation and exceptionally liquid.
Birla Sun Life Gold ETF
An open-ended gold exchange traded fund, Birla Sun Life Gold ETF is the eleventh gold ETF to enter the ETF space in India. The fund will invest in gold with 99.5 per cent purity sourced from London Bullion Market approved refineries.
Motilal Oswal MOSt Shares Gold ETF
MOSt Gold Shares lets investors for the very first time to buy gold straightforwardly from an asset management company. Here for converting gold ETFs to physical gold, other ETFs lets investors to convert only a minimum of 1 kg of physical gold, excluding Motilal Oswal's. This lets investors to redeem units for as lows as 10 grammes.
Axis Gold ETF
Axis Gold ETF has objective to seek to provide returns that closely correspond to returns provided by price of gold through investment in physical Gold (also Gold related securities as allowed by Regulators from time to time). Having this, investors can get 99.5% purity at current market prices without premium charges. But in reality, the performance of the scheme may differ from the domestic prices of Gold owing to expenses and or other related factors.
GS Gold BeES ETFs
Like shares, GS Gold BeES ETFs can be traded throughout the day and issued in the Demat form. It has a total expense ratio of a maximum of 1% yearly. For trade in GS Gold BeES, an investor wants to have a trading account and a Demat account, wherein transactions can be settled only in a Demat form on a T+2 basis.
Quantum Gold Fund ETF
Quantum Gold Fund ETF product is suitable for investors who are looking for long term returns by investing in physical gold. Here the minimum amount of investment will change according to the category like Retail Investor, Large Investor or Authorised Participants (AP). For Retail Investors- On the Exchange: Approx. the same to price of ½ gram of Gold quoted on the NSE. On NSE, the units can be purchased /sold in least lot of 1 unit and in multiples thereof.
HDFC Gold Exchange Traded Fund
In HDFC Gold Exchange Traded Fund, investment is mainly in Gold bullion of 0.995 fine qualities. Also, the Units of HGETF in excluding Creation Unit Size cannot be openly redeemed with the Fund. These Units can be redeemed (sold) on a constant basis on the NSE and BSE during the trading hours on all trading days. Here units of HGETF can be subscribed (in lots of 1 Unit) in the trading hours on all trading days on the NSE and BSE, on which the Units are listed. Redemption Proceeds might be completed within 10 working days. Current Expense Ratio for HGETF is 1%.
IDBI Gold ETF
IDBI Gold Exchange Traded Fund is one more option to open ended gold exchange traded scheme. This one tracks the price of gold in the domestic market. Every small unit of IDBI Gold ETF is backed by 24 carat gold of 99.5% purity also it will be held by a custodian.
Kotak Gold ETF
Kotak Gold ETF is an open-ended Exchange Traded Fund, which invests in physical gold and activities to track the domestic spot price of gold as directly as possible. Thus, it would be best option to invest in gold without taking physical delivery of gold. Like most others, one single unit of the KGETF is about equal to 1 gram of gold.
You Might Also Like :
- Best Muhurat and Days to Buy Gold in 2013
- Shubh Muhurat to Buy Gold in 2014 According to Hindu Calender
- Chocolate type gold bars are best for small investment and Payment
- Unipay2u India Review : Is it a Scam?
- TVS Bharat Keyboard with Indian Rupee Symbol launched
- Pro Cleanse Gold Review: What are the side effects?