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It is good to have gold as a part of your investment portfolio. You can invest in gold through Gold ETFs or Gold Funds. Gold Funds are good if you want to invest for a longer term without too much trade. Gold ETFs are good if you want to regularly buy and sell gold and plan to hold for a longer term.
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We Indians love to buy gold either as jewellery or for investment purposes. It is good to have some gold in the investment portfolio, as it is a hedge against inflation. Moreover, gold is generally negatively correlated to equity investments which means when the equity markets are down, gold performs well. So it helps to balance the portfolio.
Nowadays there are many ways to buy gold. You do not need to buy physical gold and worry about how to store it and how to keep it safe. You can buy Gold via Gold ETFs or Gold funds. We are comparing Gold ETFs and Gold funds here to help you decide your investment choice.
Here’s a snapshot of the performance of some Gold ETFs and Gold Funds as on 9 December 2013.
Here is a comparison of expenses for Gold Funds and Gold ETFs –
To summarize, it depends on your investment need. If you want to have a fund for long term investment with regular SIPs, Gold funds are the way to go. If you want to trade in gold regularly and already have a demat account, Gold ETFs should be your choice and Gold ETFs also perform better in the longer term. You should keep an eye on the expenses.
Vidya Kumar
GettingYouRich.com
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