Know the secret behind earning profits from gold without owning it.
Today, gold has become a good investment option, more than just a piece of jewelry. Gold is one of the assets that can yield significantly more profit than stocks, bonds, or real estate. However, many people who consider gold as an investment still traditionally invest in the yellow metal. Instead of buying gold as jewelry or coins, various investment options are available today. One of them is gold ETFs.
Gold ETF funds are traded in the stock market in a similar way to stocks. People buy and sell gold ETF funds in the stock market every day. The price of the ETF is also determined according to the domestic price of physical gold. Gold ETFs invest 99.5 percent of their money in gold. Therefore, the value of the ETF will also change according to the price of gold in the domestic market.
Similar to the stock market, you need to invest in gold ETFs through a trading account and a demat account. You can open these with brokers approved by SEBI. After this, you can buy gold ETFs offered by any fund house. The ETF will be credited to your demat account immediately after purchase. You can also sell gold ETFs with the help of brokers in the same way.
Advantages of gold ETFs
One of the main advantages of gold ETFs is that you get rid of the hassle of storing physical gold. Another special feature is transparency. It can also be converted into cash quickly. Moreover, it is beneficial to have supervision by regulatory agencies like SEBI.
The disadvantage of gold ETFs is that there is no SIP option compared to mutual funds. Another disadvantage is that brokers may charge some fees while buying and selling gold ETFs. Gold ETFs are best suited only for long-term to medium-term investors.
