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The elders of our families swear by investing in gold. However, many young investors hold themselves back because they doubt the purity of gold in the market. Or, they feel that storing the precious metal is a hassle. If you are hesitant to buy real gold but want to take advantage of the rising market, here is a golden opportunity for you: Gold ETFs.<\/p>\n\n\n\n
A Gold ETF is an exchange-traded fund (ETF) that tracks the domestic physical gold price. They are passive funds whose underlying assets are gold bullion. Thus, they can serve as a substitute for real gold.<\/p>\n\n\n\n
Keep reading this article to learn how gold exchange-traded funds work, their benefits, how you can invest in them.<\/p>\n\n\n\n
Think of gold ETF investments as an amalgam of stock trade and physical gold investments.<\/p>\n\n\n\n
When you invest in a gold ETF, the fund manager uses it to purchase gold at market rates on your behalf. One gram of the purchased gold corresponds to one unit of the gold ETF. Then, these units are bought and sold on the market, just like company stock.<\/p>\n\n\n\n
Let us now look at some features and benefits of gold ETFs.<\/p>\n\n\n\n
You can buy gold ETFs online at the current gold ETF prices through a DEMAT account. Then, the AMC is responsible for trading them on the stock exchange. So, you can conveniently enter and exit the gold market whenever you want. You can also invest in gold ETFs through the FoF route by investing in gold mutual funds<\/a> which in turn invest in gold ETFs.<\/p>\n\n\n\n Additional Read: <\/strong>Physical Gold Vs Digital Gold \u2013 Which is Better?<\/a><\/p>\n\n\n\n You can buy and sell gold ETFs in small quantum, depending on the amount you wish to invest.<\/p>\n\n\n\n Through gold ETFs, you can hold and trade gold easily and securely. Your ETF units are stored electronically in your DEMAT account, so you can rest assured of their safety and hold on to them for as long as you want.<\/p>\n\n\n\n Unlike gold ornaments and bars, gold ETFs do not come with make-charges. You can purchase all types of gold ETFs at standardised rates, without mark-up.<\/p>\n\n\n\n Gold ETFs are taxed similar to debt investments. You will have to pay short-term capital gains tax if you sell your gold ETFs before three years. You will have to pay long-term capital gains tax on gold ETFs older than three years.<\/p>\n\n\n\n On the bright side, you do not have to pay any VAT, wealth tax, or securities transaction tax. Thus, they are more tax-friendly than physical gold.<\/p>\n\n\n\n Additional Read: <\/strong>SGB Vs Gold Fund: Which is a Better Investment?<\/a><\/p>\n\n\n\n If you prefer investing in mutual funds online, you can also look for mutual fund units that have underlying gold ETF assets.<\/p>\n\n\n\n Gold ETFs can give you high returns and enrich your investment portfolio. So, if you want to invest in gold, consider doing so with ETFs. <\/p>\n\n\n\n Want to get started with mutual funds? Discover high-rated mutual fund schemes with Tata Capital’s Moneyfy<\/a> app and start with an SIP amount as low as 500. Download the app today!<\/p>\n\n\n\nSmall investment amount<\/strong><\/h2>\n\n\n\n
Easy to hold<\/strong><\/h2>\n\n\n\n
Cost-effective<\/strong><\/h2>\n\n\n\n
Tax-efficient<\/strong><\/h2>\n\n\n\n
How to invest in gold ETFs?<\/strong><\/h2>\n\n\n\n
In conclusion<\/strong><\/h3>\n\n\n\n