Should gold ETF be a part of your investment portfolio

Byshaheen shaikh

What is a gold ETF?

Gold ETF represents gold, but not in its physical form. The investor invests in gold, online. One can buy any amount of online gold.  The price of gold is equivalent to the price of actual gold. Trading gold online is very easy and convenient, and that is why they are gaining popularity with time.

Why should we invest in gold ETF?

Gold ETFs are considered as the best gold investments. Some of its reasons are mentioned below:

  • Easy trading

One of the biggest advantages of gold ETFs is its trading process. One can trade their gold fund at any time. Unlike physical gold, this trading can be done online within a few minutes. One can trade their gold to different countries as well.

  • Easy liquidation

When we invest our money in something, we expect to get financial security when the market goes down. Gold funds ensures security because the liquidation process of this fund is very easy and fast. One can get instant cash even with short notice. The investor can redeem any amount of money to serve their financial needs.

  • Safe investment

It is considered a safe investment that has no fear of theft or robbery. There is no need for a separate locker for safekeeping the purchased gold as well. All the transactions are regulated by the Security and Exchange Board of India. Thus, gold funds are very secure investments.

  • Quick transaction

The process of transaction is very simple. Just a few clicks and you are done. Buying and selling gold online is done in an open market. So, everyone can access it.

  • Open market

Gold ETF is done in the global market, which is open for all. The gold rates in different countries, the GST charges, the trader list, and the price fluctuation can all be checked online. So, anyone can now invest in a gold fund.

  • Cost-effective

It is very cost-effective. There is no hurry to buy or sell the gold. The investor only has to pay a minimum amount as a brokerage fee yearly.

  • Tax benefits

No wealth tax or security transaction tax is charged over gold fund investments. So, people get tax benefits on gold ETFs. Apart from tax benefits, when one invests in Gold funds for a long time, they get a good return if the gold price in the market raises high at the time of redemption.

  • Collateral

If one wants to borrow a considerable amount of money from any organization, they can use gold ETF as their security collateral. Thus, they can take loans and fulfill their financial requirements.

  • Diversity in investment

Last but not the least, gold funds bring diversity into your portfolio. Investing in various types of mutual funds is always a better option. It lessens our risk of facing a massive loss in the future. That is why people are advised to invest at least 20% of their investments in gold.

 Gold is a sign of wealth and economic stability. Everyone should invest in gold so that they can survive and market crash. Thus, because of its numerous benefits, gold ETFs must be a part of our investment portfolios.