Gold ETF: Gold ETFs are rising amid the dangers of the new variant of the corona virus, Omicron. In November 2021, an investment of Rs 683 crore has come in Gold ETF. Investors’ trend towards gold ETFs has increased amid rising concerns about the ‘correction’ in gold prices and the new variant of the corona virus, Omicron. This information has been received from the data of Association of Mutual Funds in India (Amfi).
What do experts say
There was a net investment of Rs 303 crore in Gold ETF in October, while it was Rs 446 crore in September. Last month, an investment of Rs 24 crore came in Gold ETF. Preeti Rathi Gupta, Founder, LXME said, “There was a significant investment in Gold ETFs in November. Concerns about the economy have increased with the new variant of COVID-19. Investors are turning to the traditional method of saving as a hedge against market volatility.
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Himanshu Srivastava, Associate Director-Manager Research, Morningstar India, said, “Amidst the ‘correction’ in gold prices in November and concerns over Omicron, the attractiveness of gold as a safe investment has increased. The investment figure in Gold ETFs has reached Rs 4,500 crore this year. In July this year alone, there was a withdrawal of Rs 61.5 crore from the Gold ETF.
What Gold ETF?
The best way to invest in Paper Gold is by buying Gold ETFs. It is an open ended mutual fund, which is based on the falling and rising prices of gold. ETFs are very cost-effective. One gold ETF unit means 1 gram of gold. That too completely pure. It gives the flexibility of investing in stocks as well as investing in gold. Gold ETFs can be bought and sold on BSE and NSE just like stocks.
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Advantages of Gold ETFs
Gold ETF units can be bought like stocks. Purchasing charge is less on it as compared to physical gold. 100% purity is guaranteed. It has the facility of investment through SIP. At the same time, it has a track record of giving good returns in the long run. Investing in Gold ETFs is less volatile than investing in the stock market. It has high liquidity i.e. you can buy and sell it whenever you want. You can also start Gold ETF with 1 gram i.e. 1 Gold ETF. In terms of tax, physical is cheaper than gold. Long term capital gains are to be paid on Gold ETFs. Gold ETFs can also be used as security for taking loans.
How to Invest in Gold ETFs?
Gold ETFs can be bought online through a demat account. It is necessary to buy at least one unit for investment. Each unit is of 1 gram. Buying gold ETFs is similar to stocks. One can buy Gold ETF from existing trading account only. The units of Gold ETF are deposited in the demat account. Gold ETFs are sold through the trading account itself.
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