Which is better – Gold ETF or gold savings fund to invest?
Dibyajyoti Ganguly, Kolkata
Both the options have advantages depending on the convenience that an investor seeks. For instance, one can invest in paper gold through gold exchange traded fund (ETF), wherein one can buy the gold units from the stock exchange for which a demat account is necessary to buy and sell the units on the stock exchange. The gold savings funds are convenient to those investors who do not have a demat account as these funds are passively managed funds of fund that invests in the open-ended gold ETF of a particular fund house, which in turn invests in physical gold with 99.5 per cent purity. The performance of the two types will differ because of the varying investment mandate that both the type of funds have. For instance, the gold ETF can invest only in gold, whereas the gold savings funds can leverage with cash and cash equivalent holdings that can be favourable for short-term returns.
