Gold ETF vs Silver ETF: Where to Invest?

26 September 2022
5 min read

India is one of the fastest-growing economies in the world. It's also home to one of the largest populations of people with low incomes, making it an ideal place for ETF investments. The country is rich in natural resources and has a strong economy, which has helped make India one of the best places for ETFs to grow over time.

These funds are similar to mutual funds, but they are designed specifically for large groups of people rather than individuals alone. They allow people who aren't experts to benefit from market trends without worrying about how much they're losing or gaining every day on their investments.

Gold ETF in India

The Gold ETF is a fund that invests in the gold market. It is similar to an exchange-traded fund (ETF) but trades on an exchange instead of being held by the issuing company. This allows investors to sell the shares like they would any other security, rather than having to hope the company itself will hold onto its assets. 

The price of gold in India is determined by the spot price, which is the price of gold on the day it is bought or sold. The spot price of gold is also known as “the current” price. The other important thing you should know about gold ETFs in India is that they are traded on exchanges like NSE or BSE.

You may also want to know How to Invest in Gold ETF in India

Silver ETF in India

Silver has been used for centuries as an essential metal for jewellery and other tools. Still, it also has many industrial uses, including aerospace and electronics. Nearly 20% of all electronics require silver in some capacity—so it is often seen that investors have the interest to invest in this precious metal. 

Buying Silver ETFs in India is an excellent option if you want to invest in precious metals but don't know where to start. Here's what you need to know about buying Silver ETFs in India.

Also read, Silver ETFs - How Does it Work, Features & Taxation

Gold and Silver Funds: Pros and Cons

Gold ETFs have higher liquidity than their silver counterparts, which means they'll trade more often and enable you to make better trades on the stock market. They also tend to have lower fees because they only hold actual physical assets like gold bars or coins—no paper contracts are involved with them!

Silver ETFs charge expenses on top of management fees similar to other funds that track other commodities, such as oil or wheat futures contracts; however, they generally have lower expenses than their gold counterparts because they don't hold any physical assets.

Gold ETFs and Silver ETFs are both safe investments. They’re great for investors who want to diversify their portfolios and hedge against inflation. Here’s a comparison of the two investments:

Gold and Silver ETFs: Similarities

Both gold and silver are precious metals that have been used as currency and investments for years. The only difference between gold and silver is that one is a precious metal, while the other is an industrial metal.

Gold vs Silver ETFs: Differences

Gold mining is more expensive than silver mining, which means that gold tends to be more volatile than silver.

Gold is also scarce; only about 1/100th of all gold ever mined in the world today is still being held by humans (which means it’s not easy to find).

On the other hand, because silver can be found in nature so easily compared with gold, it doesn’t fluctuate as much as gold does when it comes to prices at different times throughout history (which means it could be a safer investment).

Criteria

Gold ETF

Silver ETF

Benefits

Many people invest their money in gold ETFs because they have a higher return rate than other forms of investment, such as stocks or bonds.


This means that when you buy an ETF, you will get an interest payment for the period between the time you buy and sell your shares; if you keep your investment for more than one year without selling it, your investment will increase significantly over time.

The most obvious benefit is that you can buy silver at a lower price than you would if you were to buy individual bars. The price difference is not huge, but it’s enough to be worth considering.


Another benefit is that you can quickly diversify your portfolio if you buy silver ETFs. With just one purchase, you could own a little bit of every type of silver on the market—and that’s not something you can do with precious physical metals.

Price

More Expensive

Cheaper

Volatility

More Volatile

Less Volatile

Liquidity

Highly Liquid

Less Liquid

Returns

Higher

Average

Gold ETF vs Silver ETF: Where Should You Invest?

Investing in silver and gold is an excellent way to diversify your portfolio, but it's essential to know the difference between gold ETFs and silver ETFs.

Gold ETFs are great for investors who want to own physical gold. They're also perfect for those who want to get exposure to the price of gold without owning any.

Silver ETFs can also be used similarly—you can simply buy shares of an exchange-traded fund (ETF) that tracks the price of silver. However, unlike gold ETFs, silver ETFs don't contain any physical silver assets.

Conclusion

So, this was a brief overview of the differences in gold vs silver ETF. Depending on the investment and risk appetite, you can decide which ETF would fit your portfolio the most.

Both investment options have their fair share of pros and cons. All you need is to time your investments ideally.

Happy Investing!

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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