123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

Physical Gold Vs Etfs- Which One Should You Pick?

Profile Picture
By Author: QuantumAMC
Total Articles: 75
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Let’s look at the two main ways to purchase Gold in India:

1) Physical gold via jewelry or coins
2) Gold mutual funds or ETFs

Why bother about the form of Gold you purchase?
If the purpose is consumption, for e.g., a wedding, you should buy gold physically.

But if you are looking to accumulate gold for instance for the marriage of your children or for investment purposes, you should consider buying gold ETFs.

Buying gold is a hassle
You have to check numerous things before buying gold jewelry or gold coins such as hallmark certificates for purity and physically look for an choose the right piece which suits your needs. There is then a 20%-30% making charge involved. In comparison buying gold via an ETF is as simple as buying any other mutual fund. You can even buy just 1 unit of gold whereas even the smallest piece of jewelry weighs a minimum of 4 grams.

Gold ETFs are economical and easily liquefiable
The only ...
... cost investors have to consider when buying gold ETFs is a minimal fund management fee of around 1%. ETFs can be easily sold back at prevailing market rates. In comparison, when selling physical gold in the market you stand to lose up to 25-30% of your initial investment as making charges are discounted for and typically jewelers buy back gold at 2-3% below prevailing market rates.

Tax benefits
After an ownership period of 3 years, physical gold attracts wealth tax and VAT, neither of which happens when you own ETFs.

Storage is expensive
Buyers need to find safe physical storage such as bank lockers to store their gold and this may prove expensive. But for Gold ETF, storage is taken care of by the fund. Investors hold the gold ETFs in a demat account, and don’t need to bother about its security as in the case of physical gold.

Quality Assurance of Gold ETFs
Gold ETFs are backed by gold of 99.5% purity, so investors can be assured about the quality of gold.

Do not be misled into purchasing the wrong form of Gold. Do consider your investment purpose carefully before heading out to purchase the shining metal.

Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.
Mutual fund investments are subject to market risks read all scheme related documents carefully.

More About the Author

Quantum Mutual Fund has over 14 years of experience into mutual funds and puts the needs of investors like you first. Invest in different types of schemes & start an SIP with Quantum Mutual Funds today! Quantum Mutual Fund believes in sustainable growth built with integrity & transparency and are trusted by over 50,000 active investors to achieve their wealth creation goals. Our aim is to generate sensible, risk returns for your investment horizon.

Total Views: 353Word Count: 557See All articles From Author

Add Comment

Investing / Finance Articles

1. 10 Successful Investment Quotes By Warren Buffett
Author: quotie

2. Is This A Good Time To Buy Astral ?
Author: MarketSmith India

3. Msi Stock Of The Day: Emami Trading North Towerds Its 52-week High
Author: MarketSmith India

4. Sgx Nifty Indicates Positive Opening; Dollar Index Trades Higher
Author: MarketSmith India

5. How Do I Choose Best Mutual Funds To Invest For Sip?
Author: Quantum Mutual Fund

6. Short Term Or Long Term-which Investment Strategy Is Better
Author: S Vishwa

7. How To Invest In Cryptocurrency?
Author: DynamicFRX

8. Should I Trade Btc To Gbp?
Author: Elia

9. How To Select The Best Factoring Company In New Jersey For Your Business Growth?
Author: Michel Steve

10. Sgx Nifty Indicates Muted Opening; Jubilant Foodworks And Power Finance To Report Results Today
Author: MarketSmith India

11. Different Functions Of Asset Management Companies In India
Author: Avendusgroup

12. Buy Ein Number Online
Author: EIN Number Application

13. Why Buy 1oz Gold Britannia
Author: gold britania

14. Pivot Point Trading: An Overview
Author: alexander

15. Sgx Nifty Indicates Negative Opening; Coal India To Report Results Today
Author: MarketSmith India

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: