9 Things you need to know about gold ETFs


If you want to invest in gold through mutual funds, gold ETFs are the ideal route. Exchange-traded funds track the underlying asset, which in the case of gold ETF is the price of physical gold.

Here are some of its features to keep in mind about Gold ETFs:

1. Gold ETFs are just one of the various ways of investing in gold, like purchasing raw gold bars or gold jewelry, buying e-gold, buying gold bonds issued by RBI, etc. Here the benefit is it can be connected to your Demat account. 

2. You can buy or sell your gold ETF mutual funds on the stock exchange by your trading account, just like shares. During the trading hours, you can trade it at low transaction costs. It gets credited or debited to your Demat account. It has no lock-in period.

3. Gold ETF SIP investment can be the source of your next passive income, given its low management fees and transparent returns.

4. You can use your gold ETF as your collateral security if you need to get a loan approved. This increases your secured loan eligibility.

5. Gold ETFs are regulated by SEBI. Therefore, you can be assured that every unit of your gold ETF is backed by equivalent physical gold kept with the gold custodian.

6. Investing in physical gold is not secure. Therefore, investing in gold ETF SIP is like owning gold without the costs and challenges of owning physical gold. As for the value, gold ETFs are in accordance with the price of gold globally.

7. Investing in gold ETF mutual funds online brings no storage hassle, and safety is also ensured against theft or robbery. In case you buy gold bars, coins, or jewelry, there is always the concern of its safety and storage. But gold ETFs are a dematerialized form of yellow metal and thus safe from all the trouble. 

8. Securities Transaction Tax (STT) is not applicable on gold ETFs. As gold ETFs fall in the category of non-equity products, you are saved from paying STT.  

9. During the economic and political fall, gold ETFs do not face the pressure of value reduction like other assets. It is observed that gold prices seem to increase during the global uncertainty period. It is a good hedge.


With the Tata Capital Moneyfy App, you can find out the leading gold ETFs that are performing well. You will find various useful information on mutual funds in a user-friendly manner. Once you start investing through the Tata Capital Moneyfy App platform, you can enjoy the benefits of gold trading through the SIP route.