Gold ETF is becoming a popular investment option nowadays. You might have heard the news that Gold ETF inflow is peaking and touching new heights every day. This is due to the rise in the gold price. Gold yellow shining metal is back in action. Gold price is increasing and showing an upward trend in 2019. In the past one-year gold price has surged by more than 25%. Gold was available at Rs.30000 per 10 gm in the Sept 2018 and today (17 Sept 2019) gold prices have grown to Rs.37960 per 10 gm. It is expected that the gold price will grow further in days to come.
There are multiple reasons for the increase in the gold price. The first reason is geopolitical stability of the US and China and trade war. The trade war between these countries is escalating tension and creating a virtual slow down type situation. Another big factor for the increase in gold price is the rise in dollar price w.r.to rupee. The rupee is becoming weak against the dollar as gold is imported from outside we need to pay a higher amount for importing.
Increase in gold demand is another important factor. According to world gold council report an increase in buying activity by central bank and gold ETF has cause impact in gold price.
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There are multiple ways to invest in gold such as physical gold, gold funds, sovereign gold bond, and Gold ETF. Out of these options, Gold ETF turns out to be a very good investment option. It is easy to buy and sell. As it is in electronic form you need not worry about physical theft. You are not required to pay additional making charges and you can buy ETF in small quantities.
5 Best Gold ETF for Investment in India 2019
SBI Gold ETF
The SBI Gold ETF is an open-ended scheme that invests in gold and gold instruments. The prime objective is to track the gold price and generate equivalent returns. The entry and exit loads for investing in this scheme are not applicable. The gold units of this scheme can be purchased or sold at exchange just like stock. The performance detail of SBI Gold ETF is given below.
HDFC Gold ETF
HDFC Gold ETF is open-ended fund scheme. This scheme gives 99.1% weightage to gold and invests in gold and gold-related instruments. This fund also tracks gold price and expected to offer similar returns. This fund has generated 24.6% returns in last one year. The performance stat of HDFC Gold ETF is given below.
AXIS Gold ETF
Axis Gold ETF is one of the best gold based ETF. Axis Gold ETF aims to generate returns that are in line with the performance of gold. The performance of gold is subject to tracking error. This fund gives 98.05% weightage to gold bar. Axis Gold ETF has generated 25.18% returns to the investor in the past one year.
Reliance ETF Gold BEES
Reliance ETF Gold BEES is an open-ended Gold Exchange Traded fund that aims to generate returns equal to the gold price. The top holding of this ETF is Gold Bar. Reliance ETF Gold BEES has generated 26.05% returns for the investor in last one year. The performance detail of Reliance ETF Gold BEES is given below.
Kotak Gold ETF
Kotak Gold ETF is next in the list. The objective of this fund is to track and generate returns equal to physical gold. The gold unit purchased here is backed by actual gold. Kotak Gold ETF has generated 26.22% returns in the past one year.
Should you invest in Gold?
Gold price are generally volatile and unpredictable. You should not invest in gold for fulfillment of your financial goal. However, to fulfill your consumption need during festival and marriage you can plan to purchase gold. As per expert recommendation Gold investment in your portfolio should be maximum 5-10%.
Remember “Gold is nonproductive asset and used as hedge against inflation”.
Looking at current trend gold price will continue to grow in days to come. If you have long term perspective you can invest small portion of your portfolio in gold.