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A gold ETF fund is a kind of exchange-traded fund which acts as an option for real gold. However, it is cumbersome and not safe to invest in physical gold. This is where gold exchange-traded funds can help you remain invested in gold while you can do away with the hassle of owning physical gold. The net Asset Under Management (AUM) under 11 active schemes of gold ETFs increased from ₹4,385 crores in November 2018 to ₹22,736crores in Mar 31 2023 Such rapid growth in gold exchange-traded fund folios shows the growing affinity of retail and high-net-worth individuals towards this digital asset. If you are interested in investing in this kind of ETF fund, read on to learn everything about it to make an informed decision.
Are Gold mutual funds and ETFs different?
Since every unit of these funds generally stands for 1g of 24 K pure gold, they are quite suitable for long-term investments, particularly if you wish to trade systematically or invest a large amount. Gold exchange-traded funds differ from gold mutual funds in a few ways. For instance, you don't need a Demat account to invest in a gold mutual fund because it invests in the gold ETFs of the asset management company. However, you require the account to purchase and sell gold-traded funds. You can invest via a systematic investment plan (SIP) in a gold mutual fund but cannot do that in a gold ETF fund.
What Are the Advantages of Investing in Gold ETF Funds?
Easy to trade: Gold ETF funds are bought and sold similarly to any other equity ETF. It makes the whole process easy, more so if you trade stocks via an ETF You can easily liquidate them and trade them during working hours. Prices of gold ETF shares are available publicly on the stock exchange. Therefore, the whole process becomes transparent, and as an investor, you can easily track changes, even hourly. Investing in physical gold makes you liable to pay GST, However, GST credit is offset on investments in Gold ETFs. So, in this way, too, you can enjoy tax savings by investing in these funds. The fluctuations in equity markets can be lowered by investing in gold. Gold exchange-traded funds are suitable for all kinds of investors since they are available in variable denominations. You can begin investing with as less as 1 unit of ETF fund.
Best Gold ETF Funds in QAMC
Quantum Mutual Fund offers several mutual fund schemes in India that invest in equities, Gold, bonds, multiple asset. The company allows investors to start an SIP in any of its schemes with an amount as low as ₹500, besides offering an option to hold the units in the Demat mode.
Quantum Gold Fund ETF has a physical gold backing of 24Karat pure Gold, sourced from London Bullion Market Association accredited refiners. Each unit of Quantum Gold Fund ETF represents 1/100th of 1 gram of gold offering a low cost and convenient way to invest in Gold.
Who Should Invest in Gold ETF Funds?
Investing in gold ETF funds is a good idea if you wish to reflect and track the actual price of physical gold in real-time. These funds are also a good investment avenue if you don't wish to possess the real commodity. These exchange-traded funds can give you enough opportunities to enjoy real gold's market exposure. Nevertheless, it is best to allocate upto 20% of your overall investment portfolio to Gold ETF funds. That way, you can maintain stable returns by building a sturdy investment outline.
Know More About Gold ETF Fund?
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The difference between physical gold & Gold ETFs
Watch Mr. Chirag Mehta, Sr. Fund Manager - Alternative Investments, explains the difference between investing in physical gold and gold ETF
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Mr. Chirag Mehta Explains Benefits of Investing in Gold ETFs
Mr. Chirag Mehta explains the benefits of investing if Gold ETFs over physical Gold. Switch from the traditional gold buying methods to the easy, smart and viable investment avenues - Gold ETFs
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More Reasons to Buy Gold This Festive Season
Gold is a traditional and safe investment option that can be used as a hedge against inflation and currency fluctuations.
Product Labelling
| Name of the Scheme | This product is suitable for Investors who are seeking* | Risk-o-meter of Scheme |
|---|---|---|
|
Quantum Gold Fund An Open Ended Scheme Replicating/Tracking Gold |
• Long term returns • Investments in physical gold |
Investors understand that their principal will be at High Risk. |
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.
Mutual fund investments are subject to market risks read all scheme related documents carefully.
Frequently Asked Questions on Gold ETF Funds
Quantum Gold Fund is an Exchange Traded Fund also known as ETF.
A Gold ETF is fund that has gold as the underlying security. So, the value of the ETF is derived from the value of underlying gold. Gold ETF would be a passive investment; so, when gold prices move up, the ETF appreciates and when gold prices move down, the ETF price comes down. As Gold ETFs track gold prices, the only differentiating factor would be the costs borne by the Fund House.
Quantum Gold Fund – QGF is an open-ended Scheme Replicating / Tracking Gold, will invest in Physical Gold. It seeks to offer investors an innovative and cost-efficient way to invest in gold. Each unit of the QGF will be approximately equal to price of 1/100th of 1 gram of Gold. Through the lower cost of operations and the availability of units having smaller denominations, QGF would provide investors an excellent means of asset allocation.
The Investment Objective of the Scheme is to generate returns that are in line with the performance of gold and gold related instruments subject to tracking errors. However, investments in gold related instruments will be made if and when SEBI permits mutual funds to invest, in gold related instruments. The Scheme is designed to provide returns that before expenses, closely correspond to the returns provided by gold.
Systematic Investment Plan, Systematic Transfer Plan and Systematic Withdrawal Plan are not available under QGF.
Investors can avail of these facilities by investing in the Quantum Gold Savings Fund. Click here to read about Quantum Gold Savings fund.
Investors do have the option of regularly buying units from the listed exchanges and accumulating their QGF holdings.
What is the Minimum amount I need to invest or redeem in the Quantum Gold Fund? (Retail investors and large investors/AP)
The minimum amount of investment will change according to the category you fall under i.e., Retail Investor and Large Investor or Authorised Participants (AP).
Retail Investors- On the Exchange: Each unit of the QGF will be approximately equal to price of 1/100th of 1 gram of Gold. On NSE, the units can be purchased /sold in minimum lot of 1 unit and in multiples thereof.
Large Investors/AP:
To read more on minimum amount for Large investors/AP please read the SID of QGF or please Click here.
Ms. Ghazal Jain is managing the scheme. Ms. Ghazal Jain has over 4.7 years of experience in the field of Finance and Alternative investments including Gold, Asset Allocation, Personal Finance, and Investment allocation.
She has been managing this fund since June 2, 2020 .Ghazal has completed her MBA in Finance from the School of Business Management (SBM), NMIMS, Mumbai. She joined the Quantum Asset Management Company in January 2019.
Prior to joining Quantum, she was associated with Fox Education LLP and Bahubali Electronics Pvt Ltd.
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