Want to invest in Gold ETF. Whats the process?
Hey Sachin,
Investing in a Gold ETF is a great idea. Each unit you own is equal to 1 gram of high-purity gold. So, it gives you exposure to the gold market without owning physical metal. They trade just like stocks, and you can find them listed on NSE and BSE.
Follow these steps to invest in a Gold ETF:
- Open a Demat and trading account with a SEBI-registered broker. This is essential since ETFs are bought and sold on the stock exchange.
- Choose a Gold ETF scheme by comparing options from different AMCs. I usually check expense ratio, tracking error, and past performance before deciding.
- Place a buy order through my trading platform by searching the ETF symbol and entering the quantity.
- Check the settlement once units reflect in my Demat account. I can sell them anytime during market hours, just like regular shares.
These are some facts I keep in mind while investing, as should you:
- SIP is not directly available in ETFs, though some brokers offer alternatives.
- There are brokerage charges and transaction fees.
- Tracking error may slightly impact returns compared to gold’s actual price.
For me, Gold ETFs work well as a medium to long-term option to hedge against inflation.