Why invest in a gold ETF?
It has various advantages such as liquidity, safety, tax benefits and is cheaper than buying physical gold. “Gold ETFs provide an excellent investment opportunity”, says financial planner Kartik Jhaveri. He adds, “They are also more convenient than physical gold since you do not have to worry about storage, purity or insurance.” How it’s better on the cost front: Buying gold: Physical gold attracts making charges of around 15-20 per cent. In gold ETFs, you have to pay an entry load of up to 2.5 per cent if you buy units during the New Fund Offer (NFO). If you buy units once the scheme is listed, then only the brokerage charges apply. This can range between 0.5 to 1 per cent of your transaction value. Recurring charges: For maintaining your jewellery, you might have to incur storage and insurance costs. Gold ETFs charge about 1 per cent every year as annual expenses. Selling gold: While selling your jewellery, you may lose up to 25-30 per cent. Gold ETFs charge a brokerage of around 0.5
