In India Gold is considered as a traditional method of asset. It is considered as the real money because gold price will always follow the inflation rates.
Usually people in India used to buy gold in the form of jewellery, coins and bars. But, with the introduction of Gold ETF [ Exchange Traded Funds ] in 2007, investors are provided with a smart means to invest in gold.
Gold ETFs will invest in gold bullions. They are passively managed and are endeavour to track with the international gold price. These open-ended funds are listed on both the BSE and NSE. They can be traded (bought and sold) in units similar to stocks. Apart from mutual funds here we need to have a trading account and a demat account to be able to invest in Gold ETF funds.
Summary
Gold ETFs have made life simpler for the investors as there is transparency in pricing, purity, provide efficient resale and hassle free storage. We can say that the future of paper gold in India looks excellent. Here we don't have to pay any making charge, annual locker fees, wear and tear losses for jewellery and also no fear of theft.
Hence Gold ETF is the best alternative to physical Gold. As per financial experts one can have a maximum of 10% of his overall portfolio in gold ETF.
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