Gold exchange-traded funds (ETFs) are instruments traded on the stock exchange that closely track the performance of gold. They invest in gold by purchasing bullion or futures contracts.
Gold ETFs are a great investment option as they allow investors to diversify their portfolios. Gold is also considered a safe-haven asset.
With Gold ETFs, an investor can invest in gold without having to physically own it. This makes the investment safer than physical gold.
Since Gold ETFs are traded on the stock exchange, investors can easily buy and sell these assets. It is less time-consuming and easier to liquidate than physical gold.
Compared to physical gold or gold mutual funds, the cost of investing in Gold ETFs is less. Investors do not have to pay entry or exit loads or making & storage charges.
Although Gold ETFs are subject to capital gains taxes, they are exempt from Value-Added Tax (VAT) and Securities Transaction Tax.
Gold ETFs can be a great way to diversify your portfolio and invest in an alternative asset. However, one must always analyse the associated risks and financial goals before investing.
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