Gold vs Gold ETF: Maximise your returns, become rich - Check which is a better investment option for you?
Gold ETF gives an additional 4.5 to 5 per cent additional returns that an investor loses during the physical gold transaction during buy and sell.
Gold or Gold ETF (Exchange Traded Fund) are the preferred choices for most investors while putting money in the yellow metal. However, gold investors are always confused between the two when it comes to returns. As per the investment experts, Gold ETF is better than physical gold as it enhances an investor's returns by around 4.5 to 5 per cent, which they lose during physical gold transaction to the goldsmith or the banks.
Kartik Jhaveri, Director, Wealth Management at Transcent Consultants explained that investors end up paying two to three per cent extra in physical gold transactions. "In physical gold transaction, an investor has to pay around 2.5 to 3 per cent extra from the spot market price to the goldsmith while buying and the same he or she has to pay to the goldsmith again while selling the physical gold. Today, gold bars and biscuits are available in banks also and they also charge above the spot price, which is more higher than the goldsmith. So, while investing in physical gold, an investor loses around 4.5 per cent to 5 per cent of the net transaction he or she does in buy and sell of the physical gold," he told Zee Business Online.
Jhaveri added that in Gold ETF, the prices are transparent and one can sell or buy it by clicking a single button on one's computer. He went on to add that when an investor invests in physical gold, he or she needs to pay for secured storage of the gold either in the locker at their banks or take the risk by keeping it at their home locker.
Elaborating upon the benefits of investment in Gold ETF, SEBI registered investment expert Jitendra Solanki said, "Both Gold and Gold ETF give same return to an investor while a Gold ET investment is safe, easy to buy and sell, transparent and full freedom in pricing as one can buy or sell one's fund on one's bid price."