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Any investor wants their portfolio to be as robust and strong as possible. Very often commodities or assets play a very important role in investments with a tremendous amount of benefits for investors to reap. Precious metals such as gold or silver add a lot of weightage to one’s portfolio and stake in the market. It is often known to yield high returns and is the bridge between a typical portfolio of stocks and bonds. Gold investment can take many different forms; right from possessing jewellery, to bullion coins or bars there are ample of investment options an investor can look at. Banks and other financial companies and institutions have realised how important gold is as an investment option and in turn offer many different schemes, plans and deals for customers. Not only does gold carry emotional value to it, but it is also an indication of wealth, prestige and social status in the society. Possessing jewellery is often an indication of one’s wealth and is used as a means of pleasure. It was traditionally viewed as a means of investment but other avenues such as bullion bars, bullion coins, certificates and most popularly ETF’s (Exchange Traded Funds) have replaced this traditional method. Various companies and banks such as Religare Online (Religare GOLD ETF), HDFC Mutual Fund ( HDFC Gold Exchange Traded Fund) Motilal Oswal AMC (MOSt Shares Gold ETF) , DSP BlackRock Mutual Fund (DSPBR World Gold Fund), Kotak Securities (Kotak Gold ETF), and jewellers such as Tanishq, Tribhovandas Bhimji Zaveri, GRT Jewellers, etc. offer attractive deals for customers. Gold ETF’s are securities which can be either open ended or closed and are backed up by physical gold. These are very similar to investing in mutual funds; the only difference being that it is invested in gold. The gold can be accessed electronically and have been proven to not only safer but also easier options to buy gold. Gold; in fact is extremely lucrative at times of uncertainty in the market and usually is not exposed to the high volatility of the financial market. It actually is a stabiliser between bonds and stocks so that one’s portfolio is protected. India is one of the few countries where the private demand for gold is the highest. ETF’s are beneficial in many different ways for investors. They not only are tax efficient but they also have lower management cost than conventional mutual funds. They can also be traded during the market hours and can also be sold margined or short. It provides investors with opportunities to accumulate gold over a long period of time. Moreover, gold ETF’s can be sold at transparent prices in the market across India and there is no sales tax, VAT, wealth tax or securities transaction tax involved for ETF’s. There is no worry about the storage space for gold ETF’s as they are held in the format of a trading or Demat account. You thus have the benefit of liquidity and marketability. Gold ETF have dominated the Indian mutual fund industry for many years and at times of uncertainty will be a favourite option amongst investors in the country. These companies also offer a number of gold schemes where investors can also earn interest on the gold which is lying idle with them. These schemes are usually offered for 3-7 years and most often designated branches of a bank offer them.
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