World Gold fund v/s Gold ETF

[mayurkotlikar]

Hi,

I am planning to add some diversification to my existing MF portfolio and looking for gold as one option.

There are 2 options available:
1. Invest in the stock of companies that are involved in mining gold, example DSP ML World Gold fund
2. Invest via Gold ETF.

Can gurus share and advice which ones to chose for?
I will like to go SIP way, 1000 Rs per month for a few years to have some staggered exposure.

 

[mayurkotlikar]

No takers for this.

At least point me to some good link as i Googled a lot and could not conclude

 

[vasa1]

Hi,

I am planning to add some diversification to my existing MF portfolio and looking for gold as one option.

There are 2 options available:
1. Invest in the stock of companies that are involved in mining gold, example DSP ML World Gold fund
2. Invest via Gold ETF.

Can gurus share and advice which ones to chose for?
I will like to go SIP way, 1000 Rs per month for a few years to have some staggered exposure.

Okay, since no one else is answering (Test match fever), I'll try.

If you have an account with a stock broker and a demat account, you can consider the gold ETF route.

The current price of a unit of most gold ETFs (1 gram) is more than Rs. 1000. Goldbees was 1230 or so today.

So if you still want to go for a gold ETF, you are left with the Quantum gold ETF which is for 1/2 gram and costs about Rs. 600 currently.

With a budget of Rs. 1000 you can comfortably get at least one unit of the Quantum gold ETF per month.

If you have read the offer document of DSP-ML (Now DSP-Blackrock or something like that), they will claim that investing in gold mining companies has a higher scope for returns than pure gold.

Please note that this fund has "debt mutual fund" character and will be taxed accordingly.

 

[justsayraj]

Looking at the current price, Gold ETF is better option.

Around $750, you can invest in Gold ETF. Current price is at $772.
Analysts global wide expect the gold price to reach $1450 in 3 to 4 years time.
But, I would book profits partially every 20 to 25% rise.
Do not withdraw, if you make 10 or 20% losses. Price will go up again.

Wait for the price to go below 750 and buy Gold ETF.

It does not matter which Gold ETF you buy, price is almost same.

If you are planning by SIP way, regularly keep buying. Depending on with whom you have demat account, look at their charges. If you buy for 1000 or 1500 Rs, you may be paying delivery charge for each transaction and may not look interesting to you. Do your investigation on this part.

Happy Investing.

Raj

 

[orderflow13]

open an account in mcx, ncdex via broker, take position in mini gold or gold as per ur risk n rollover ur position ( or u can take position in far month contract ) for mini gold ( 100 gm. ) they will charge margin 7 k sumthing keep 25 k in account for volatility .... thats what i do ( as i take positions in nifty derivatives i found only this option to hedge , marging for regular gold of 1 kg is 50k)
if ur more conservative bit then etf is good.
Regards
Alex

 

[AW10]

Performance of Gold fund depends on bigger trend of equity market. When mkt is bullish, and gold is in uptrend, the gold fund will give u better return. But when market is bearish (like current situation), though the price of gold had gone up, but the share price of gold producer still fell hence gold funds still gave -ive return.

So, in current situation, gold ETF is better then gold funds as their performance is directly related to price of gold.

Happy Trading/ Investing.

 

[mayurkotlikar]

Thanks.

What is better, buying via ETF or Gold coins?
I have a Bank locker, so safety is not a problem

 

[vasa1]

Thanks.

What is better, buying via ETF or Gold coins?
I have a Bank locker, so safety is not a problem

Please search Traderji for this information. I had asked a similar question sometime ago.

There were reports / rumours that, at least in phoren, some of the ETFs were not above board and hence the real thing maybe better.

Some of the seniors here have described how to buy actual gold, whether coins or what, I'm not clear.

 

[AW10]

Think about liquidity, when u want to exit and book profit.
IMHO, ETF is better as you can sell the holding at anytime .. but not sure how will u sell physical gold and book profit...(I am sure, atleast that will require u to physically handle it i.e. take it from locker and go somewhere to sell.... )..

Keep it simple..

Happy Investing.

 

[rm420]

Hi!
In my view, Gold- ETF is definitely a better option than physical gold:
1) easy to buy especially in small amounts e.g. Rs 1000/2000etc
2) as said above- easy & safe to liquidate
3) as common indian mind-setup goes, ppl rarely sell off gold once purchased to make profits. its treated as a life long asset.
on a lighter note ur wife will never allow u to do so.
so i believe physical gold should be bought as per ur need & not for investment

rm420