Why Gold?
1. Store of Value
2. A Safe Haven
3. Hedge against Inflation
4. An effective portfolio diversifier
5. The purchasing power of gold has remained stable over a long time period.
6. During the times of financial crisis, economic downturns, national crisis, emergencies and wars etc., Gold has been a safe refuge.
7. The official Gold holdings globally further strengthens the point.
What is an Exchange-Traded Fund?
Exchange Traded Funds or ETFs are the Mutual Fund schemes, whose underlying asset can be a commodity, an index or basket of assets, which can be traded on the stock exchange like normal securities.
Gold Exchange Traded Fund (Gold ETF) – Features
• It is an Open-Ended Fund, which would invest in gold and track the spot price of gold.
• Thus, it may be considered as a means of investing in gold without taking actual delivery of gold.
• Units can be bought/sold like any other stock on National Stock Exchange.
• Minimum Amount of Investment : 1 Unit
• One unit of Gold ETF will represent approximately One gram of Gold
• Entry & Exit Load: Nil
Gold ETF - Advantages
• Cost of Investing is much lower
• Offer greater transparency to the investor
• Offer small denominations to invest in
• Tax Efficiency- Long Term Capital Gains after 1 Yr
• No Wealth Tax
• No concerns about the physical security, theft and purity
