Gold ETFs
Gold Exchange Traded Funds (gold ETFs) are funds which primarily invest in gold and can be bought and sold on the exchange. Gold ETFs are essentially open-ended mutual fund schemes which are based on ever-fluctuating gold prices. Gold ETFs have proved to be worthier than physical gold, since gold ETFs not only ensure your investment in the yellow metal, but also provide the flexibility, liquidity and tax efficiency that come with stock investments.
Comparison of GOLD ETFs vs GOLD BARS vs JEWELLERY
As compared to physical gold which is idle wealth, gold ETF is a form of investment which provides returns and can be used to meet short-term as well as long-term financial goals. Gold ETFs come with no risk and are not required to be stored. Understand the benefits and cost of investing in Gold ETFs viz-a-viz Gold Bars or Gold Jewelry.
Transaction Charges | Jewellery | Gold Bars | Gold ETFs |
---|---|---|---|
Purchase | Making charges of 15-20 % | 10-20 % mark up charges by banks | Brokerage of 0.5% or even less |
Sell | 10-20 % is lost due to purity issues1 | Banks do not take it back, so premium paid at time of purchase is written off | Brokerage of 0.5% or even less |
Maintenance | Insurance charges and locker charges (if you put in locker) | Insurance charges and locker charges (if you put in locker) | 1.00% |
Tax Implications | Long term capital gain, but after 3 years, plus wealth tax | Long term capital gain, but after 3 years, plus wealth tax | Long term capital tax |
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