Invest with IDBI Gold Exchange Traded Fund (ETF)
It is raining gold funds and gold ETFs these days because the gold has returned almost around 31% last year and hence everyone is going behind gold these days, even though the price has reached an all time high now. Here’s yet another Gold ETF and this time it is from IDBI Mutual Fund, namely IDBI Gold Exchange Traded Fund.
IDBI Gold ETF
The IDBI Gold Exchange Traded Fund (ETF) is an open ended gold exchange traded scheme which are brought and sold via stock exchanges via any stock trading platforms. Only during the NFO you can buy these via a regular paper application and after it reopens you can only buy via your demat account. Hence demat account is mandatory to buy such gold ETFs in India and the same applies for this fund as well.
NFO: The IDBI Gold ETF NFO is open from October 19, 2011 and closes on November 17, 2011. It reopens for regular buying and selling via demat account from November 17, 2011. You can get the application of this fund from the select IDBI Bank Branches. The price of the unit during NFO is Rs. 100 per unit. The minimum application that you can buy during this time is Rs. 10,000 and in multiples of Rs. 1. There is no entry or exit load applicable for this gold ETF fund since buying and selling happens via online trading.
Investment and Asset Allocation
The IDBI Gold Exchange Fund will invests 95-100% in gold and 0-5% in money market and debt funds. The primary objective of this fund is to get capital appreciation by investing primarily in physical gold in India. The benchmark being domestic price of the gold in India. You can only buy and sell the units of this fund via demat account and hence it is mandatory.
Advantages of IDBI Gold ETF
- Purity of gold is guaranteed at 99.5%
- Most liquid form of gold that you can own
- Virtual gold and hence safety is 100% guaranteed
- Low cost to own gold and safe keeping unlike physical gold
- No wealth tax involved unlike jewellery or physical gold
- Most tax efficient form of gold
- Transparent pricing and no hidden charges when buying and selling
Gold Loan against ETF
There is also an option of getting loan against ETF from select gold financing companies and hence you can opt for it if you need cash urgently rather than selling them for the same. This is also an upcoming option which is making gold ETFs the most best way to own gold.
The above advantages not only is applicable for IDBI Gold ETF Fund but also is the same for any other gold ETFs available in India at the moment and hence they are the best way to buy gold if you are looking at it only in the perspective of investment. So if you are looking to buy gold then go for any of the existing ETFs or the above mentioned IDBI Gold ETF.
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