The SPDR Gold Shares (GLD) is often considered the best gold ETF due to its large assets under management, liquidity, and tracking accuracy.
Gold ETFs are generally cheaper than Gold Mutual Funds. They typically have lower expense ratios (0.5% to 1%) due to passive management. Gold Mutual Funds, which may include active management and additional costs, tend to have higher expense ratios (1% to 2%) and may charge exit loads.
“Investors should consider Gold ETFs as a strategic component in their portfolio, especially as a hedge against market volatility and inflation. Gold typically performs well during economic downturns and geopolitical tensions, as seen with current global conflicts, making it a valuable diversifier.
iShares Gold Trust ETF GLD is more expensive with a Total Expense Ratio (TER) of 0.4%, versus 0.25% for IAU. GLD is up 1.86% year-to-date (YTD) with -$122M in YTD flows. IAU performs better with 2.93% YTD performance, and +$50M in YTD flows.
Because GLD is a paper asset that is backed up by gold, it does involve some degree of counterparty risk. These risks could entail such issues as accounting problems, or liquidity issues.
Factors such as asset under management (AUM), performance over the last years, and expense ratios are crucial when selecting gold ETFs in India. These Top 5 Gold ETFs in India provide solid returns while offering liquidity, making them excellent choices for those looking to diversify with gold.
However, investors should consider that there are risks to investing in gold ETFs. One issue is that gold ETFs are subject to market volatility and may not provide immediate returns — so it's important to make any investing decision based on your unique investment goals and strategy.
SBI ETF Gold is one of the best gold ETFs in India. Being an open ended gold commodity scheme, the ETF is managed and launched by SBI Mutual Fund House. This product is perfect for those who are looking for long term capital gain and investment in gold, gold based securities and gold bullion.
If you're looking to invest in gold and silver, it's not too late. Yes, gold may be approaching an all-time high, but it still has plenty of room left to run. With the potential for years of recovery ahead of us, just like post-2008, there's still a lot of growth left for the gold price.
Though sovereign gold bonds are among the safest avenues to invest in gold in India, some risk is still there. The sovereign default risk exists due to the fact that sovereign gold bonds (SGBs) are not backed by physical gold but instead by a derivative of gold issued by the Indian government through the RBI.
Experts highlight that Gold ETFs offer greater liquidity, lower costs, and better security compared to physical gold. With minimal expense ratios and high returns, Gold ETFs are recommended for balanced portfolio diversification and as a hedge against inflation.
In general, though, financial experts often recommend putting between 5 and 20% of your portfolio into gold or other precious metals, though some suggest an even greater allocation.
Gold is better as a short to medium-term investment, as long-term returns on the yellow metal are often as low as 10 percent per annum. Do not make too heavy or long-term investments in gold. Allotting 5 percent to 10 percent of your investment portfolio to gold ETFs is a wise idea.
For us, the best type of gold to buy is physical gold bullion. The precious metal has been loved for centuries as a safe haven in which to grow and store wealth and physical bullion best reflects these qualities today.
Historically, the stock market has delivered higher returns than gold. This growth potential makes stocks a favored choice for long-term investors seeking capital appreciation. While stocks can be volatile in the short term, they offer substantial gains over extended periods.
Gold ETFs eliminate the need for storage, insurance, and finding a buyer—tasks associated with physical gold—they do come with certain drawbacks. These include exposure to counterparty risk, annual management fees, and the potential for the fund to fail in accurately tracking gold prices.
Gold Schemes (Saving Instruments)
It is one of the best way to buy gold. There are a ton of gold schemes in the market, which the jewellers mainly float. These schemes work like a SIP where you deposit a certain sum of money every month at a jeweller. The scheme can be for 11 months, 2 years, etc.
BeES has better liquidity as units can be traded on stock exchanges during market hours. Investors can buy or sell units instantly using their demat and trading account at prevailing market price. Gold BeES is India's oldest and largest gold ETF.