- Date : 09/09/2022
- Read: 3 mins
Since the start of 2022, uncertain events such as war, supply chain disruptions, high inflation, rising interest rates, etc., have gripped the world. During such times, gold ETFs can be a saviour.
During times of inflation and uncertainty, gold is the best financial product you can rely on to safeguard your investment portfolio. Gold prices shot up when the Russia-Ukraine war started at the end of February 2022. It reached a high of Rs 63,086 per 10 grams on 8 March 2022. Since then, gold prices have cooled to Rs 54,983 per 10 grams (as of 5 September 2022), offering investors an opportunity to invest in gold through Gold Exchange Traded Funds (ETFs) for the long term.
Gold price performance in 2022
(Source: https://www.gold.org/goldhub/data/gold-prices)
Why should you invest in gold?
There are multiple reasons for people to invest in gold. The Russia-Ukraine war has still not ended. Because of the war, commodity prices shot up, leading to inflation. To control inflation, central banks had to increase interest rates. Gold is a safe haven during times of uncertainty, such as war. Also, historically, gold has been the best hedge against inflation. Investors may consider investing in gold through gold ETFs - one of the best ways of investing in gold.
Also Read: Gold ETFs Vs Physical Gold: Which One Is Better?
Which gold ETF is best in India?
Based on the 5-year returns, let us look at which gold ETF is best.
Table : Best gold ETFs in India
(Source: www.valueresearchonline.com)
Note: The above returns are as of 7 September 2022. The 1, 3, and 5-year returns are CAGR. The funds have been ranked based on a five-year return.
The above table shows that IDBI Gold ETF has been the best performing ETF in the last five years. It has given a five-year return of 10.00% CAGR. However, its performance is only slightly better than other gold ETFs, which have given a five-year returns in the range of 9.7% to 9.9%.
Also Read: Why Should Women Invest In ETFs?
Gold ETFs offer convenience
Gold ETF units are traded on the stock exchanges such as BSE and NSE. You can buy gold ETF units during market trading hours. The units bought will be credited to your Demat account. As the units are in electronic format, no storage cost is involved (in the form of locker rent). You don't need to worry about gold purity. You can sell the gold ETF units on the stock exchange whenever you want. The sale proceeds will be credited to your bank account/broking account.
To sum up, gold ETFs offer a lot of conveniences.
Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.
During times of inflation and uncertainty, gold is the best financial product you can rely on to safeguard your investment portfolio. Gold prices shot up when the Russia-Ukraine war started at the end of February 2022. It reached a high of Rs 63,086 per 10 grams on 8 March 2022. Since then, gold prices have cooled to Rs 54,983 per 10 grams (as of 5 September 2022), offering investors an opportunity to invest in gold through Gold Exchange Traded Funds (ETFs) for the long term.
Gold price performance in 2022
(Source: https://www.gold.org/goldhub/data/gold-prices)
Why should you invest in gold?
There are multiple reasons for people to invest in gold. The Russia-Ukraine war has still not ended. Because of the war, commodity prices shot up, leading to inflation. To control inflation, central banks had to increase interest rates. Gold is a safe haven during times of uncertainty, such as war. Also, historically, gold has been the best hedge against inflation. Investors may consider investing in gold through gold ETFs - one of the best ways of investing in gold.
Also Read: Gold ETFs Vs Physical Gold: Which One Is Better?
Which gold ETF is best in India?
Based on the 5-year returns, let us look at which gold ETF is best.
Table : Best gold ETFs in India
(Source: www.valueresearchonline.com)
Note: The above returns are as of 7 September 2022. The 1, 3, and 5-year returns are CAGR. The funds have been ranked based on a five-year return.
The above table shows that IDBI Gold ETF has been the best performing ETF in the last five years. It has given a five-year return of 10.00% CAGR. However, its performance is only slightly better than other gold ETFs, which have given a five-year returns in the range of 9.7% to 9.9%.
Also Read: Why Should Women Invest In ETFs?
Gold ETFs offer convenience
Gold ETF units are traded on the stock exchanges such as BSE and NSE. You can buy gold ETF units during market trading hours. The units bought will be credited to your Demat account. As the units are in electronic format, no storage cost is involved (in the form of locker rent). You don't need to worry about gold purity. You can sell the gold ETF units on the stock exchange whenever you want. The sale proceeds will be credited to your bank account/broking account.
To sum up, gold ETFs offer a lot of conveniences.
Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.
