How the Fund repays in gold bars?
All the gold bought by the Fund is deposited with a custodian- usually a reputed banker- for safe keeping in their safe vaults. Once the fund units are surrendered, the Fund authorizes the banker/ custodian to release the gold bars. So this helps the investor to get back gold or retain the deposit in gold (investors choice). Since these gold units are traded in the market, anybody can sell these units easily in the market at the price prevailing on that day. One need not search for a buyer as in the case of selling physical gold. Gold Traded Mutual Fund offers all the benefits of investment in gold without its physical difficulties. The major advantages of these funds are: • Safety • Liquidity • Convertibility to physical gold This is one area that an investor can look forward to invest. However there are many more alternatives to invest. To know about investing in mutual funds visit Investing in Mutual Funds and to get an idea as to how mutual funds work visit Mutual Funds.
