GOLD EXCHANGE TRADED FUND (GOLD ETF)
Gold Exchange Traded Funds (GOLD ETF)
In Indian culture, purchasing gold is not only considered auspicious but also a secure investment avenue. Traditionally, gold is acquired in the form of jewelry or gold bullion. However, gold jewelry tends to lose value during resale due to making charges, while managing, storing, and ensuring the security of large quantities of gold bullion can pose challenges.
Now, there is a simpler way to invest in gold – the Gold Exchange Traded Fund (ETF). Gold ETFs are open-ended Mutual Funds that invest in Standard Gold Bullion of 99.5% purity. Instead of physically buying gold bullion, you can purchase units of Gold ETFs, which are equivalent to owning the real thing. These units are held in your demat account, earning Gold ETFs the moniker of ‘Paper Gold’. Additionally, units of Gold ETFs are listed on the stock exchange and their value fluctuates in line with trends in the spot market for physical gold.
What Makes Gold Investment Worthwhile?
In India, gold is a unique asset that has consistently outperformed the international market trends for almost a decade, delivering impressive returns on investment. Its ability to withstand market fluctuations sets it apart from other investment options. With its long-term wealth-building potential and resilience to market shifts, gold becomes an essential component of your investment portfolio.
Investing in Gold ETFs is a simple process with Kotak Securities.
Open a Kotak Securities online NRI demat & trading account, and then log in to place an order for the desired number of units of Kotak Gold ETF units at www.kotaksecurities.com. The cost of the ETF units is automatically debited from your account and the specified number of Gold ETF units is credited to your NRI demat account. You can also place orders for Gold ETFs at your nearest Kotak Securities branch or through a Kotak Securities dealer.
What are the benefits?
Security:
No more worries about theft of physical gold. Your gold purchases are safely stored away in your NRI demat account
Liquidity:
You can buy or sell Gold ETFs at a moment’s notice on the Kotak Securities website or through your Kotak dealer. Perfect for emergencies, when you do not have the luxury to hunt for a buyer for your physical gold.
Quality control:
There’s no 100% guarantee of the purity of the gold that you buy at your local jeweler. However, with Gold ETFs this becomes a non-issue as Gold ETFs invest in 99.5% pure gold only.
Cheaper:
Physical gold comes with making charges that can’t be recovered, the cost to securely store it and also the cost to insure it. These factors limit the amount of physical gold you can own. With Gold ETFs, the costs of buying and selling are much lower and there is no cost of storage or security involved.
Diversify your portfolio:
As mentioned earlier, gold brings stability and assured returns to a portfolio. Use it to hedge your risks on the equities and mutual funds in your portfolio.
Save on Wealth Tax:
Physical gold attracts the tax man in the form of Wealth Tax. You will not have this problem with Gold ETFs.
