Akash Jha
In India, the days of possessing only physical gold are long gone. Although the majority of Indians still believe that physical gold in the form of ornaments, bars, etc. is the best way to invest in gold, investors are beginning to see the allure of gold ETFs. Several individuals are unaware of what a gold ETF is, but once they do, they recognize the benefits of investing in gold Exchange Traded Funds.
What are Gold ETFs?
If you desire to invest in gold stocks after opening a Demat account, you can do so through the stock market or ETFs (Exchange Traded Funds). You can invest in these through mutual funds, and they can be purchased and sold at market prices. Any mutual fund that invests in gold assets is, in essence, a gold ETF. As gold is a commodity, this is a commodity-focused fund that monitors the gold price. Gold ETFs are transacted similarly to stocks on stock markets, and their performance can be evaluated similarly to that of stocks.
In both dematerialized and paper form, exchange-traded funds represent assets such as physical gold. Investing in equities can serve as a substitute for investing in actual metal. After they are exchanged, investors are credited with the currency equivalent of the unit in lieu of actual gold.
The Advantages of Gold ETFs
Today’s investors want to diversify their financial portfolios with a combination of investments that guarantee potential returns but may be risky, such as investments in a forthcoming initial public offering (IPO). How does one mitigate risk? By purchasing an investment that never loses its luster and consistently reflects a reliable source of liquidity, one can remain stable during periods of inflation. This is where gold exchange-traded funds come into play. Here are the principal advantages of investing in gold ETFs:
- They diversify your portfolio and expose you to a range of investment sectors like manufacturing, gold mining, etc.
- Gold ETFs offer safety as you don’t have to worry about the threat of physical gold theft.
- Gold ETFs avoid the tedious storage of physical gold.
- Gold ETFs are like investing in physical gold, so they act as a hedge against inflation and give you liquidity.
- Gold ETFs are easy to invest in, guarantee gold purity, and ensure transparency when you wish to liquidate them.
Top Gold ETFs in India in 2023
Gold ETFs are “passively managed” funds that monitor the value of physical gold in accordance with the market. The funds invest your money in gold bullion, which has a purity of 99.5%. When the price of gold rises on the market, investors in gold exchange-traded funds (ETFs) stand to profit. Here are the ideal gold ETFs to invest in for 2023:
|
Gold ETFs |
Highlights |
| HDFC Gold ETF | Expense Ratio = 0.59% |
| AUM = Rs.3353.55 Cr. | |
| SBI Gold ETF | Expense Ratio = 0.64% |
| AUM = Rs.2824.08.55 Cr. | |
| ICICI Prudential Gold ETF | Expense Ratio = 0.5% |
| AUM = Rs.3332.52 Cr. | |
| Kotak Gold ETF | Expense Ratio = 0.55% |
| AUM = Rs.2580.36 Cr. | |
| Axis Gold ETF | Expense Ratio = 0.53% |
| AUM = Rs.756.85 Cr. | |
| IDBI Gold ETF | Expense Ratio = 0.35% |
| AUM = Rs.94.67 Cr. | |
| Invesco India Gold ETF | Expense Ratio = 0.55% |
| AUM = Rs.89.3 Cr. | |
| UTI Gold ETF | Expense Ratio = 1.13% |
| AUM = Rs.817.90 Cr. | |
| Aditya Birla Sun Life Gold ETF | Expense Ratio = 0.54% |
| AUM = Rs.355.56 Cr. | |
| Quantum Gold ETF | Expense Ratio = 0.78% |
| AUM = Rs.154.60 Cr. |
The Investors Who Invest in Gold ETFs
Gold ETFs may be ideal investments for investors who wish to maintain a close eye on the real-time price of gold. Then, there are those who may not wish to invest in the literal metal commodity but wish to increase their financial diversification through this investment. Investors acquire exposure to the performance of the metal on the market and to commodity prices.
Practical Investment
Investing in gold exchange-traded funds (ETFs) is a practical method to invest in gold without having to deal with the storage challenge. Additionally, if you open a Demat account today for equity investment, then you can consider of gold ETFs to mitigate risks of volatile markets, as pure gold investment acts to hedge your risk. For risk-averse investors and those seeking stability in commodity investments, gold ETFs, so to speak, kill two birds with one stone. Investing in the purest form of gold is available to conservative investors via transparent transactions. In addition, the brokerage fees associated with investing in ETFs are low. Check out upcoming IPOs when searching for gold ETF investments.
