Gold Exchange Traded Fund – Invest In Gold Starting From Rs 10
Gold has been a traditional store of value and a hedge against economic uncertainties. In India, where gold holds cultural and economic significance, investing in Gold Exchange Traded Funds (ETFs) has become an increasingly popular option. ETFs offer a convenient way for investors to gain exposure to the price movements of gold without the need for physical possession.
Best 5 Gold ETF Investment
Overview of Gold Exchange Traded Fund in India
Several mutual fund companies in India offer gold exchange traded fund, allowing investors to buy units that represent physical gold in an electronic form. Here, we will explore five prominent Gold ETFs and their performance over the last one, five, and ten years.
1. LIC Mutual Fund Gold ETF
LIC Mutual Fund gold exchange traded fund has demonstrated robust performance, recording an annual return of 21.00 percent in the last year, 13.19 percent in the last five years, and 6.93 percent in the last decade. This consistency in returns makes it an attractive option for investors seeking long-term growth.
2. Aditya Birla Sun Life Gold ETF
With an annualized return of 19.74 percent in the last year, 12.97 percent in the last five years, and 6.15 percent in the last decade, Aditya Birla Sun Life gold exchange traded fund provides investors with a competitive choice. Its performance over the years reflects its ability to generate steady returns.
3. SBI Gold ETF
SBI gold exchange traded fund has also delivered commendable results, with an annual return of 20.20 percent in the last year, 13.00 percent in the last five years, and 6.66 percent in the last ten years. The State Bank of India’s reputation adds a layer of trust for investors considering this ETF.
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4. Axis Gold ETF
Axis gold exchange traded fund, boasting an annualized return of 20.17 percent in the last year, 13.08 percent in the last five years, and 6.42 percent in the last decade, is another strong contender. Its consistent performance positions it as a reliable option for those looking to invest in gold.
5. HDFC Gold ETF
HDFC gold exchange traded fund has recorded an annual return of 19.77 percent in the last year, 12.75 percent in the last five years, and 6.64 percent in the last ten years. The HDFC brand’s credibility in the financial sector adds to the appeal of this ETF.
Factors to Consider When Investing in Gold ETFs
While the historical performance of these gold exchange traded fund is crucial, several other factors should be considered before making an investment decision.
a. Expense Ratio
Investors should assess the expense ratio associated with each ETF. A lower expense ratio indicates a more cost-effective investment, allowing a higher portion of returns to flow to the investor.
Liquidity is a vital aspect of ETF investments. Higher liquidity ensures that investors can easily buy or sell units at market prices, minimizing the impact cost.
c. Tracking Error
Tracking error measures the deviation of an ETF’s performance from its benchmark index. A lower tracking error indicates that the ETF effectively mirrors the price movements of gold.
d. Market Conditions
The price of gold is influenced by various factors such as interest rates, inflation, and geopolitical events. Investors should stay informed about these market conditions to make informed decisions.
Diversifying your investment portfolio is a fundamental principle of risk management. While gold exchange traded fund provide exposure to the precious metal, investors should ensure that their overall portfolio is well-diversified across various asset classes.
Investing in gold exchange traded fund in India is an accessible way for individuals to participate in the potential growth of gold prices. The historical performance of LIC Mutual Fund Gold ETF, Aditya Birla Sun Life Gold ETF, SBI Gold ETF, Axis Gold ETF, and HDFC Gold ETF showcases their ability to deliver consistent returns over different time periods.
Before making investment decisions, it is crucial for investors to consider factors such as expense ratio, liquidity, tracking error, market conditions, and the need for portfolio diversification. By carefully evaluating these factors, investors can make informed choices that align with their financial goals and risk tolerance.
In conclusion, while investing in gold with as little as Rs 0 may not be possible, starting with a small amount and gradually increasing your investment in gold exchange traded fund can be a prudent strategy for long-term wealth accumulation.