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Investing in Gold ETF’s and its Benefits
Gold ETFs; A Pure and Secure Investment
Have you ever thought to invest in gold but did not want it in physical form due to storage hustles? Wanted to buy gold without paying a premium or making charges? And never wanted to worry about the purity of gold and expect tax benefits too? Then, your choice should be gold ETFs that represent 99.5% pure physical gold bars. Let us check further details of the Gold ETF.
What is Gold ETF:
A Gold ETF is an Exchange-Traded Fund that tracks the domestic physical gold price. It is a passive investment instrument based on the domestic gold price and invests in gold bullion. Gold ETFs are listed in NSE and BSE like a stock of any company, making transactions like purchasing and redeeming convenient and simpler.
Benefits of Investing in Gold ETFs:
Security:
The units are held safe and secure in the Demat account, eliminating all the hustles of possessing physical gold like storage and fear of theft. This sense of security leads to peace of mind.
High Purity:
Units bought through a gold ETF are backed by high purity physical gold. Thus, when we invest in the gold through a gold ETF, we are entitled to receive gold with higher purity, and there is no making charge or premium paid. Thus, purchasing Gold ETFs means buying high purity gold in an electronic form.
Transparency:
As the gold ETFs are listed and traded in stock exchanges, their prices are transparent, and we can buy or sell the units of Gold ETFs at our convenience, and there are no exit or entry loads for the transactions in Gold ETFs.
Tax-efficiency:
The returns generated from the Gold ETFs are considered long-term capital gains. STCG (below 36 months) is taxed as per the income slab, and LTCG (above 36 months) is taxed at 20.8% with indexation benefit.
Hedging Tool:
Gold is considered a safe haven in the investment world. When the markets turn volatile globally, many investors route their money to gold, resulting in increased prices of gold. So, hedging some portion of the equity investments with gold can be an added advantage for your portfolio.
The three-year CAGR of Gold ETFs in India ranges from 17% to 19%, and the standard deviation ranges from 14% to 20%; based on these two factors (Return and standard deviation), the Top 5 Gold ETFs we recommend are as below:
|
Name |
AUM (Cr) |
Std. Deviation |
1-year Return |
3 - Year Return |
5 - Year Return |
|
Kotak Gold ETF |
₹ 23,221.00 |
14.80% |
10.89% |
18.59% |
12.03% |
|
Axis Gold ETF |
₹ 6,519.00 |
14.39% |
10.37% |
18.35% |
11.80% |
|
Nippon India ETF Gold BEES |
₹ 67,981.00 |
15.33% |
10.72% |
18.08% |
11.50% |
|
HDFC Gold ETF |
₹ 30,868.00 |
15.10% |
10.66% |
18.04% |
11.58% |
|
ICICI Prudential Gold ETF |
₹ 25,230.00 |
14.94% |
10.58% |
18.02% |
10.47% |
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DISCLAIMER |
This report is only for the information of our customers. Recommendations, opinions, or suggestions are given with the understanding that readers acting on this information assume all risks involved. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. ATS and/or its group companies do not as assume any responsibility or liability resulting from the use of such information.