Since time immemorial gold has retained its shine over the other kind of investments you can make. In ancient times and today too owning gold is a sign of prosperity. According to World Gold Council, India is largest consumer of Gold. Keeping this obsession in mind to invest in the yellow metal there are many schemes in the market that you buy gold in forms other that physical gold.
The two kinds of gold funds in India you can invest in are as follows –
ETF or Exchange Traded Fundsare listed in the Stock Exchange. This kind of gold fundinIndia invests the money collected from individuals willing to invest in stocks that own and hold Gold. These finds can be bought or sold only through platform of stock exchange. You cannot purchase them directly from the mutual fund. When investing in Gold ETFs, you need to have a demat account with a broker registered either with the BSE or the NSE.
Gold Mutual Funds –
Gold Mutual Funds are a popular kind of gold funds in India. This is an organised fun managed by a Fund Manager. Under this plan the money collected is placed in mining business for long term benefits.
The main objective under these gold funds in India is to invest in gold producing companies or Gold Bullion.Your money is basically invested in companies that deal in mining, distribution or processing of gold and also other precious metals like silver, platinum etc.
These funds invest around 35% in securities of companies that are engaged either directly or indirectly in business of mining, processing, fabricating, distributing or otherwise investing in Gold, Silver and other natural resources.
Benefits of investing in Gold funds in India –
• Gold funds can be bought or sold easily on any day in open markets. This makes it convenient to use.
• This is the best way to invest in gold without buying physical gold. You hold the shares for gold directly with the mutual fund company.
• Gold funds in India give you the advantage of getting your investments managed by professionals
• You run less stock market risk as their investment is unrelated with stock market index
• It is a cost effective way of investing in gold bullion market as no making charges would be applicable
• You can enjoy better tax implications as compared to physical gold. This is because they are classified as long term investments after a period of 1 year as compared to the 3 years period of physical gold.
• Also, you can save yourself from any wealth tax
What gold funds can you invest in India?