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GOLD EXCHANGE TRADED FUNDS (ETF's)

GOLD EXCHANGE TRADED FUNDS (ETF's)

Gold ETFs are exchange traded funds that are meant to track closely the price of physical gold. So gold ETF lets you own gold in your Dmat account. Each unit of the ETF lets the investor own 1gm of gold without physically owning it.



Gold is an important instrument of investment for return as well as diversification and security.



Indica Investments keeps regular track of Gold Exchange Traded Funds which invest primarily in gold and are listed on the stock exchanges and their movement is linked with that of the movement of price of gold.



The fund can be converted into physical gold at any time thereby ensuring easy liquidity.

It is a good hedge against equities. There is no wealth tax.

It is suitable for individuals who want to store physical gold for marriage of their children.

Thus investing in a gold ETF provides the benefit of liquidity and marketability which are a limitation of owning physical gold. Gold ETF is liquid because you can trade in it at any time during market hours. Gold ETF is marketable because you can trade any amount in it just like a normal stock including short selling and buying on margin. Owning gold ETF also is cheaper than owning physical gold because it has no cost of carry (the cost of storing physical gold).