Gold ETFs – Gold Exchange Traded Funds In India

07 Feb

Having discussed ETF – Exchange Traded Funds, its time to talk about Gold Exhange Traded Funds or Gold ETFs in short. With the increasing price and demand of gold, investment in gold ETFs has become a rising trend these days combined with downfall of Indian stock markets in the recent months.

More and more people are now interested in investing in Gold and fixed deposits as they are providing better returns than the riskier stock markets in recent times owing to the volatility in the Indian markets. As far as my memory goes, Gold prices have trebled in the last 7-8 years in India. So let us understand the functioning of gold ETFs clearly.

Reasons to invest in gold ETFs:

Easily accessible
Provides liquidity because transactions take place in terms of shares/units
Is safe and secured due to no risk of theft or loss
No worry of storage
Less expensive in comparison to physical gold

There are many ETFs which provide choice to the investors to choose the one more suitable for them. Types of gold ETFs one can look forward to are as follows:

1) Benchmark Gold BeES: Gold BeES is the first and oldest gold ETF in India. Managing house of this fund is Benchmark Asset Management Co. Pvt. Ltd. It is a non-equity ETF with the aim to produce the same effects as that of physical gold by providing returns similar to it. It is known as GOLDBEES.

2) UTI-Gold ETFs: It is an open ended ETF and the aim is to perform corresponding to the effect and production of gold. It has always been a center of attraction as it is managed by UTI Asset Management Company Ltd. It was launched in 2007 and is symbolized as GOLDSHARE.

3) Kotak Gold ETFs: To add up in the list of favorites, one more open ended scheme, Kotak Gold ETF. The objective is to maintain the tack of gold’s domestic price by investing in physical gold as closely as possible. It was launched in 2007 and is symbolized as KOTAKGOLD.

4) Reliance Gold ETFs: It has always lived up to the expectations of investors by providing high returns. It is an open ended scheme under Reliance Fund House.

5) Quantum Gold Fund: One more similar open ended scheme performing as expected by the investors is Quantum Gold Fund. It is managed by Quantum Fund House.

6) SBI Gold ETFs: SBI Gold ETFs, launched by State Bank of India, the biggest bank in the country is an open ended gold scheme and meets the expectations of its investors.

7) Religare Gold ETF: This too is good and satisfies its customers. It is managed by Religare Mutual Fund house.

8 ) HDFC Gold ETFs: An open ended scheme has recently been launched by HDFC Mutual Fund, a well-known and reputed company and is named HDFC Gold ETF. The expectations from it are high and is hoped to perform well.

9) ICICI Prudential Gold ETFs: ICICI Prudential Gold ETFs has been launched by ICICI Prudential Asset Management Company. The company has a very good impression on its customers and expects to maintain the same by the performance of its ETF.

Reason to choose gold: Even at the time of inflation, price of gold is increasing against the decreasing values of securities, stocks, etc and fall in the value of currencies.

Returns of gold: The absolute return in the last five yrs has been 170% while the return of last yr was 35%. It can be concluded that gold ETFs assure profit to a large extent as because its price is rising day by day due to its shortage.