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 Funds are listed in the Stock Exchange. These kind of gold funds in India, invest in instruments representing Physical Gold. These funds can be bought or sold only through the stock exchange platform. 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 fund managed by a Fund Manager. Under this plan the money collected is used to buy units of Gold ETF.
The main objective of gold funds in India is to allow investor to invest in gold but do not have a demat account
The minimum investment is INR 5,000 for onetime investors. There is an option to enrol for SIP and STP with a minimum commitment of six instalments of 1,000 each. So you can invest in a disciplined manner the way you are comfortable investing in equity for years. You are also not forced to buy one or half gram of gold. You can own fractions
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?