Gold ETF & its main Features : Nation Learns

By | July 15, 2020

What is Gold ETF or Exchange Traded Fund?

A Gold ETF or Exchange Traded Fund is an investment fund that is sold or purchased on a stock exchange, unlike regular mutual funds. These are commodity type mutual funds, where the investment has to do on the assets like Gold.

These Gold exchange-traded funds do work like individual stocks and traded on the stock exchange. It has used as an investment option in India for many years.

 

Features of Gold ETF:

  • Gold ETF is available to purchase in the form of paper or a dematerialized form.
  • One Gold ETF is equal to 1 gram of gold-backed by pure physical Gold.
  • The popularity of gold ETFs amongst investors has mounted above par. While Indians do investments in the form of Gold, Gold coins, Gold bars appear at a high cost.
  • As a replacement, Gold as a paper is almost equal to the actual price of the Gold, which also satisfies the investment goals equally.
  • Gold ETF is also popularly known for investments in only one type of Asset that is Gold Bullion.
  • Like trading equity stocks of companies, India acknowledges the trading of Gold ETFs on the National Stock Exchange. It signifies that Gold ETFs can be traded at suitable market prices very efficiently.
  •  Gold ETFs are enduring investments whose value is associated with the Cost of the Gold in Global and Local markets.
  • Gold ETFs are liquid funds, and the transactional fee is also low, and they can be retrieved at the stock exchange immediately. If you’re in urgent need of cash, liquidity is necessary, and ETF can help you accomplish that in a quick-term.

It is equally essential to trace the past performance of at least 3-years of the fund organization before investing in any Gold Exchange-traded fund.

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