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Gold has crossed the level of Rs 80,000 per 10 grams and reached an all-time high of Rs 80,142. According to IBJA, so far this year, the price of gold has increased by Rs 3,980 in just 22 days. On December 31, gold was at Rs 76,162, which has now reached Rs 80,142 per 10 grams.
According to experts, it may see a rise in the coming days and it may go up to 85 thousand by June this year. If you are also planning to invest in gold, then investing in Gold Exchange Traded Funds i.e. Gold ETFs can be a good option. It has given returns of up to 25% in the last 1 year. In such a situation, here we are telling you about Gold ETF…
ETFs are based on rising and falling gold prices Exchange traded funds are based on the rising and falling prices of gold. One gold ETF unit means 1 gram of gold. That too completely pure. Gold ETFs can be bought and sold on BSE and NSE like shares. However, you do not get gold in this. Whenever you want to exit, you will get money equal to the price of gold at that time.
5 benefits of investing in gold ETF
- You can buy gold even in small quantities: Through ETF, gold is bought in units, where one unit is of one gram. This makes it easier to buy gold in small quantities or through SIP (Systematic Investment Plan). Whereas physical gold is usually sold at the price of tola (10 grams). Many times it is not possible to buy gold in small quantities when buying from a jeweler.
- Get pure gold: The pricing of Gold ETFs is transparent and uniform. It follows the London Bullion Market Association, the global authority on precious metals. Different sellers/jewelers can offer physical gold at different prices. Gold purchased through Gold ETFs is guaranteed to have 99.5% purity, which is the highest level of purity. The price of the gold you buy will be based on its purity.
- The cost of jewelery making is not covered: There is a brokerage of 1% or less for buying gold ETFs, plus a 1% annual charge for managing the portfolio. This is nothing compared to the 8 to 30% making charges that jewelers and banks have to pay, even if you buy coins or bars.
- Gold remains safe: Electronic gold is held in a demat account, in which only annual demat charges have to be paid. Also there is no fear of theft. Apart from the danger of theft in physical gold, one also has to spend on its security.
- Ease of Doing Business: Gold ETFs can be bought and sold instantly without any hassle. Gold ETF can also be used as security for taking loan.
These gold ETF funds gave good returns
| Fund Name | Returns in last 1 year | Returns in last 3 years | Returns in last 5 years |
| ICICI Prudential Gold ETF | 32.13% | 62.06% | 93.64% |
| Axis Gold ETF | 28.34% | 64.51% | 96.52% |
| Birla Sun Life Gold ETF | 27.10% | 60.94% | 95.02% |
| Nippon Gold ETF | 27.02% | 60.06% | 88.33% |
| SBI Gold ETF | 27.00% | 60.89% | 92.70% |
Source: Grow, 22 January 2025
How can one invest in it? To buy gold ETF, you have to open a demat account through your broker. In this, you can buy units of Gold ETF available on NSE and the equivalent amount will be deducted from the bank account linked to your Demat account. Gold ETFs are deposited into your account two days after the order is placed in your demat account. Gold ETF is sold through trading account only.
Limited investment in gold is beneficial According to experts, even if you like to invest in gold, you should still make limited investments in it. Only 10 to 15% of the total portfolio should be invested in gold. Investing in gold can provide stability to your portfolio during a crisis, but in the long run it can reduce your portfolio returns.
