I am interested in knowing about gold etfs. How do they work? Do they give good returns?
Gold Exchange Traded Funds (ETFs) let you invest in gold without physically owning or storing it. Instead, you buy digital units that represent real gold.
Each unit usually equals one gram of 99.5% pure gold, and its price moves in line with the live market rate. You can buy and sell these units on the stock exchange, just like shares, through your demat account. It gives you the benefit of gold ownership without worrying about purity, safety, or storage.
Here’s how Gold ETFs work in practice:
- Buying Units: When you invest, you purchase ETF units through a broker or trading platform.
- Market-Linked Prices: The value of your ETF units fluctuates based on gold’s market price.
- Easy Liquidity: You can sell your units anytime during market hours. It ensures quick access to funds.
- Transparency and Security: The holdings and value are tracked daily, so you always know what you own.
What I really like about Gold ETFs is how they make gold investment modern and transparent. There’s no making charge, no storage hassle, and you can start with as little as one gram.
If you are looking to diversify your portfolio or hedge against inflation, you can prefer Gold ETFs. It offers the stability of gold and the convenience of stock trading.
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