Why should you consider investing in gold through ETFs? MintGenie explains
new fund offers (NFOs) in gold ETFs recently. Even Baroda BNP Paribas mutual fund house launched its Baroda BNP Paribas Gold ETF on November 28, 2023, thus, adding to the list of AMCs allowing prospective investors to invest in gold through exchange-traded funds (ETFs). Repeated instances in historical data consistently demonstrate that gold serves as a reliable safeguard against inflation.
Its value typically increases when the purchasing power of fiat currencies declines. This is attributed to gold being a tangible asset unaffected by the same inflationary forces that impact paper money. Many investors opt for physical gold and SGB investments, not realizing how the benefits of putting money in gold ETFs far surpass the advantages of investing in the former.
In our country, the conventional method of acquiring gold involves purchasing gold jewellery or acquiring gold coins and bullion. Investing in physical gold has maintained popularity for centuries, primarily owing to its perceived stability and value retention. Despite the various potential benefits associated with physical gold, it carries certain drawbacks that investors need to thoroughly evaluate before deciding to make a purchase.
Below are some of the primary drawbacks associated with investing in physical gold: Costs related to storage and security: Securely storing physical gold necessitates either a home safe or a bank safe deposit box, both of which come with additional expenses. These costs can erode potential returns and diminish overall profitability. Making charges: When considering gold jewellery as an investment or asset, one factor to be mindful of is the making charges.
Read more on livemint.com
