Investment in Paper Gold


Are you upset with the hike in the price of gold? Worried about how to buy gold ornaments or investment your money? Are you worried about the decline in the stock market? Here is a good option to investment your funds.

India is the largest consumer of gold. The yellow metal has always been a fascination for us. Indians naturally have a craze to possess more and more gold. The gold accumulated by families goes unaccounted. Now investments in gold has taken a new form which is free from the risk of holding physical gold.

One of the latest trends of investments include Gold Exchange Traded Funds. These are Exchange Traded Funds based on the price of gold. ETF was first introduced in Australian Stock Exchange in the year 2003. The concept was first approved in India in the year 2007.

Gold Exchange Traded Funds in India


Presently there are seven Gold Exchange Traded Funds registered with Bombay Stock Exchange/ National Stock Exchange.
  • Gold Bees
  • Reliance Gold
  • Kotak Gold
  • Q Gold Half
  • Religare Gold
  • SBI GETS
  • UTI Goldshare
Here investment is done in units. Each unit is one gram gold of 24 carat. So the price of each unit will be the price of one gram of gold. Gold and stock market conditions are always inversely proportional. So investors who own the fund can sell the units at a better price when GETF is traded at a higher price and buy equity shares of reputed companies with strong fundamentals. Again when the market prices for the company improves it can be sold and again GETF can be purchased if it is at a lower price.

Systematic Investment Plans (SIP) is also available. By making use of this facility one can invest very small amounts regularly so that the whole amount accumulates to give a reasonable amount. By doing so, the buying price can also be averaged.

Advantages

  • Investments can be done with smaller amounts like Rs.2000/-
  • The general trends in the stock market will not affect this fund.
  • The price depends on the gold price in the international market.
  • There is less risk in investing in GETS than equity shares.
  • It is less volatile.
  • It can be used for online stock trading.

In the present scenario where physical gold prices are too hot and the share markets are tumbling, Gold ETF is a better option for investment.


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Comments

Author: Jayanta Datta Choudhury20 May 2010 Member Level: Gold   Points : 2

Online investment in gold through enlisted etfs in indian stock exchange is becoming popular option day by day.It is safer invesment option rather than physical purchae and storing of gold.

The most popular etf enlisted mentioned in this article are enlisted in BSE.

There are also some more etf enlisted in NSE.

These are:

Uti gold exchange traded fund.

Sbi gold exchange traded fund.

Reliance gold etf

Kotak gold etf.

The online equity invester can keep the mentioned etfs in their watch list of their security service providers and can observe the price movement of etf linked with market gold prices.

In falling market of physical gold they can purchase and accumulate gold regularly through enlisted etfs.

In rising market of gold they can sell full or part of the fund holding in port folio during any ceremonial requirements.





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