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Glossary
Gold ETF is an exchange-traded fund that tracks domestic gold prices, with each unit typically representing one gram of physical gold held in vaults.
Gold ETF lets you invest in gold through your demat account without buying jewellery or storing bars at home.
Gold ETFs track price via physical backing with minimal tracking error. Expense ratios lower than gold mutual funds. No making charges unlike jewellery. LTCG rules apply based on holding period like other capital assets.
Buy 10 units of a gold ETF at ₹6,200 per gram (₹62,000 total). If gold rises 8% in a year, holding value becomes roughly ₹66,960 before costs.
ETF avoids storage theft risk and making charges. Physical gold suits cultural needs; ETF suits investment allocation.
No periodic interest. Returns come purely from gold price appreciation. Contrast with Sovereign Gold Bonds offering 2.5% annual interest.
Some brokers support systematic gold ETF purchase. Gold savings funds offer SIP without demat as an alternative.