Investing in Gold: Investors are very fond of Gold Exchange Traded Fund (Gold ETF). According to the data released by the Association of Mutual Funds in India (MFII), it has invested Rs 1,328 crore in the April-June quarter of 2021. In the same quarter last year, the investment figure in gold ETFs stood at Rs 2,040 crore. According to experts, investment in this may increase in the coming days.
16,225 Crores AUM
According to MFII data, investment of Rs 1,779 crore came in gold ETF in the first 3 months of 2021. The investment figure in the subsequent 3 months stood at Rs 1,328 crore. The Assets Under Management (AUM) of the Gold ETF rose to Rs 16,225 crore at the end of June, 2021 despite reduced investment inflows. The AUM stood at Rs 10,857 crore by the end of June 2020.
See Here: Trending Songs
Investing in Gold Can Give Benefits
Anuj Gupta, Vice President (Commodity & Currency), IIFL Securities says that after July, the demand for gold in the bullion market will increase from August. With this, it can go up to 55 thousand again by the end of the year. That is why investors need not panic about this fall. According to the website of the jewelery organization Indian Bullion and Jewelers Association, gold is currently at 48,273 in the bullion market. On MCX, it closed at Rs 48,058 per 10 grams on Saturday.
Limited Investment in Gold Beneficial
Harshvardhan Rungta, Certified Financial Planner, Rungta Securities says that even if you love investing in gold, you should only invest in it with a limited amount. According to experts, only 10 to 15% of the total portfolio should be invested in gold. Investing in gold can give stability to your portfolio during a crisis, but it can reduce your portfolio’s returns in the long run.
What is Gold ETF?
It is an open ended mutual fund, which is based on the fluctuating prices of gold. ETFs are very cost effective. One gold ETF unit means 1 gram of gold. That too completely pure. It gives the flexibility of investing in stocks as well as investing in gold. Gold ETFs can be bought and sold on BSE and NSE just like stocks. However, you do not get gold in this. When you want to exit from it, then you will get money equal to the price of gold at that time.
Read Here: Latest Sports News
There are Many Benefits of Investing in Gold ETFs
- You can Also Buy Gold in Small Quantities: Through ETFs, you buy gold in units, where one unit is of one gram. This makes it easy to buy gold in small amounts or through SIP (Systematic Investment Plan). Whereas physical gold is usually sold at the rate 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 price of Gold ETF is transparent and uniform. It follows the London Bullion Market Association, the global authority for precious metals. Whereas, physical gold can be offered by different sellers/jewellers at different prices. Gold purchased with Gold ETFs is guaranteed to have 99.5% purity, which is the highest level of purity. The price of the gold you take will be based on this purity.
- No Jewelery Making Expenses: There is a brokerage of 0.5% or less for buying gold ETFs, along with a 1% annual charge for managing the portfolio. This is nothing compared to the 8 to 30 per cent making charges that the jeweler and the bank have to pay, whether 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. At the same time, apart from the risk of theft in physical gold, there is also an expenditure on its security.
- Ease of Business: Gold ETFs can be bought and sold instantly without any hassle. This gives the ETF a high liquidity. Gold ETFs can also be used as security for taking loans.
How Can You invest in It?
To buy gold ETFs, you need 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 get deposited in your account two days after placing the order in your demat account. Gold ETFs are sold through the trading account itself.
