What is Gold ETF?

Gold exchange-traded funds are a type of open-ended mutual fund scheme that invest money pooled from investors in standard gold bullion. Investors who wish to own gold but not in physical form can easily invest in such schemes to diversify their portfolios, hedge the risk of inflation and get exposure and access to the gold market online.

Why invest in gold funds?

• Safety: You no longer have to rent a locker or worry about the safety of your gold investments with ETFs.


• High Purity: Physical gold usually has a purity ranging from 18-22 carats, but gold ETFs buy gold of higher purity.


• Anti-Theft: Physical gold can be stolen, whereas gold ETFs store your gold in electronic format, making it an anti-theft investment.


• Liquidity: ETFs are more liquid compared to gold jewelry. You can easily sell an ETF compared to physical gold.

How do gold investment work?

Since these investments are based on the fluctuating rates of gold, they are less volatile when compared to equities. Though it doesn’t involve making charges unlike physical gold, you have to pay the brokerage charges and the fund management charges if you invest in gold ETF. Investment in Gold ETF is beneficial if you are planning to invest high amount for a medium term or indulge in regular trade. This type of investment comes with the dual benefit of stock trading as well as lower volatility on investments. This is an ideal investment for people who have a sound knowledge about gold trading.