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IT'S no secret that Indians are the largest consumers of gold. Festivals, weddings see huge gold purchases irrespective of prices.
But the options today are far more now than there were a few years back. It's no wonder then, that Alok Govil, a retired Army Colonel, wants to buy gold this year, but differently.
An avid reader and active Internet surfer, Govil doesn’t believe in leaving his investments to chance. He has a well-diversified portfolio of stocks, mutual funds and fixed deposits.
Govil has also put money in physical gold (trinkets for his wife and daughters). Now, he wants to invest in a gold ETF.
Before taking the plunge, he wants to know:
1. If gold ETFs score over physical gold?
2. If it is better to buy gold bars and coins from a jeweller or a bank?
wealth answers his queries.
What are gold ETFs?
- A mutual fund scheme that invests in gold, which is held in paper or dematerialized form, just like stocks.
- Returns on gold ETFs are more or less same as that of physical gold.
- Investors get units for their holding in the gold ETF.
- Gold ETFs are listed and traded on the stock exchange.
- At present, there are six gold ETFs in India—Benchmark, Kotak, UTI, Reliance, Quantum and SBI mutual funds.
Read: Should I buy physical gold or opt for funds?
Photograph: Ian Walton/Getty Images
