Gold ETFs brought more shine to yellow metal, digitally? Find out how

The gold ETFs (exchange traded funds) have boosted investments in digital gold by creating more advantages when compared to purchases made in its physical form. These ETFs can be bought and sold like shares in open market, and are preserved in demat accounts without incurring additional costs that accompany physical gold jewellery in the form of making or wastage charges.

Hyderabad: In recent times, the gold ETFs (exchange traded funds) have boosted investments in digital gold by creating more advantages to investors when compared to physical metal. Gold in its physical form has proved its capacity to withstand any economic crisis over the centuries. Now, in its digital form, the yellow metal is emerging even stronger by offering greater opportunities for all sections of people to invest with confidence.

For every auspicious occasion or festival, people buy gold. It has got greater significance for its ornamental value and as a worthy investment. The whole world believes in gold as the only investment instrument that can withstand inflation. Gone are the days only the wealthy can afford to invest in the precious metal. Nowadays, firms are offering opportunities to make smaller investments in gold. Under this, the gold exchange traded funds (gold ETFs) are getting good patronage. Find out what benefits await you in this.

The general belief is that gold investment is safe and secure enough to overcome socio-economic and political uncertainties regardless how badly they may affect a country's economy in a particular period of time. A look at history would reveal how the yellow metal remained stable and gave assured returns by withstanding every crisis.

Over decades, gold has got recognised for its value as a symbol of wealth as well as a reliable investment. Another attractive feature is its easy liquidity. We can easily get a loan anywhere by using gold as security. Because of these multi-farious reasons, people are increasingly investing in gold - by directly purchasing it on the one hand and also by opting for digital gold bonds or ETFs.

Those looking for diversity in investment portfolio should first look towards gold investments. Equities may yield good returns over long term investments. But it is no advisable for investors to choose only one type of investment. The risk factor will be less only when there is diversity in investments, which will also ensure higher returns. In times of market collapse, bonds will provide a safety net. When markets are buoyant, equities provide higher profits.

Past experience reveals how all sorts of investments have showed adverse results in times of recession. However, gold is an exception to this. In the 2008 Global Recession, shares, hedge funds, realty, commodities and all investments reacted adversely. However, only gold withstood this impact during the most difficult period from December 2007 to February 2009. This is the reason why gold must be included in one's investment portfolio for the sake of stability.

Indian investors have the opportunity to opt for a wide variety of gold plans. They can look at the gold ETFs for systematic and long term investments. Gold ETF units reflect gold rates in Indian markets. When these ETFs are bought, it means gold is held in digital form in the demat accounts. For every gold ETF unit, there will be physical gold as backup. We can buy and sell these gold ETF units just like shares in the open market.

In the gold ETFs provided by mutual funds, expenditure ratio will be lower. There will be no risk of making or wastage charges. Without buying gold directly, one can enjoy benefits of security and returns. Systematic investment plans (SIPs) also offer gold investments. Such plans provide assured average returns without the risk of price fluctuations.