Is gold savings fund better than investing in physical gold? Is gold savings safe to invest?Asked
Characteristics of Gold savings fund:
Investing gold savings funds are better option than investing in physical gold. Physical gold is best for immediate personal use not for investment. Some of the advantages of investing in gold savings fund rather than investing in physical gold are:
So, based on your personal investment style, strategy and goals, include them in your investment portfolio. However, if you think you lack skill to invest in gold yourself, then Gold Savings Funds are better way to invest in gold.
Investing I gold asset class is safe because:
Few examples of Gold savings fund are:
Gold savings funds are the funds that invest money in Gold ETFs (Gold Exchange Traded Fund) which then invests directly into gold. Gold ETFs track gold prices daily and help us to get returns by investment in physical gold.
Certainly gold savings funds are better than physical gold if you are considering gold as an investment avenue. Following points state the advantages of gold savings funds over physical gold:
Examples of Gold savings funds include: Reliance Gold Savings Funds, ICICI Prudential Gold Savings Funds
Click here to know more about gold savings funds.
Gold savings funds are mutual funds that invest in gold Exchange Traded Funds (ETFs) instead of regular ETFs. These funds do not directly invest in gold and hence are different from gold ETFs.
The following points should be considered before investing in a gold savings fund:
Gold is considered to be the most common form of investment in India. One can invest in gold in the following forms:
· Gold ETFs
· Sovereign Gold bonds(SGBs)
· Physical form such gold coins, gold bars or jewelry
Gold exchange-traded products are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and New York. It tracks the prices of gold . Like most commodities, the price of gold is driven by supply and demand, including speculative demand. However, unlike most other commodities, saving and disposal play larger roles in affecting its price than its consumption. So a lot of speculation goes into determining the price of gold and ETFs of gold depend mainly on the derivatives of gold(underlying commodity for determining price is gold).
Entry Load: It is nil in most of the gold savings fund.
Exit Load: It's applicable depending on the duration the amount is redeemed(almost in the range of 1-2% of NAV)
Typically a commission of 0.4% is charged for trading in gold ETFs and an annual storage fee is charged.
Rather than saving the gold in the form of physical assets it's better to invest in a good savings fund, because in long term it can give you more returns as compared to the physical savings.
Comparison of the two forms of savings:
In addition to this short term and long term capital gain tax are similar in both cases.
So as you've seen it's better to invest in gold savings fund, rather than saving in physical form of gold.