What is the best way to buy gold or silver
1. Thru GOLD ETF as a stock or 2. Through bank as an investment or 3. Physically though gold dealer?
The leading Exchange of India is NSE or National Stock Exchange. There are six different Gold based ETF`s available for trading as well as investments on the NSE. Below, we list them one by one:
Benchmark Gold BeES:
UTI-Gold Exchange Traded Fund:
Kotak GOLD ETF:
Reliance Gold Exchange Traded Fund:
Quantum Gold Fund:
SBI GETS or SBI Gold Exchange Traded Scheme:
Load Structure of SBI GETS : Entry Load: Up to Rs. 25 Lakhs – 2.50 %, From Rs. 25 Lakhs to Rs. 50 Lakhs-1.50%, From Rs. 50 Lakhs to Rs. 1 Crore – 1.00 %, Rs. 1 Crore above – Nil.
Now this is where I would recommend that investors should NOT opt for subscription during NFO period. The reason – the entry load is heavy – 2.5%. Instead, wait for this SBI GETS ETF to list on the NSE Exchange, and then you can buy the units through your broker and have the following advantages:
1) You will pay a brokerage (maximum 1%) to your broker, instead of the heavy 2.5% entry load during the NFO
2) You will not have to meet the minimum 5000 Rs. requirement during the NFO.
So, the choice is yours.
The capital Allocation will be as follows: Gold and gold bullion – 90 – 100 %, Debt & Money Market Instruments – 0 – 10%
So oevrall, the investors looking for investing in Gold that too specifically in Gold based ETF now have a wide variety and choice. The interesting thing is that the returns on all these various Gold based ETF`s have been almost similar. The only thing an investor should be careful about is the expense ratio or fund management charges. Though the are ETF, so the only thing an investor needs to pay is the brokerage, but sometimes the ETF may also levy a fund management fee from the investors.
Basically, ETF`s are good – any ETF is good, as long as it can track the underlying prices correctly
First Rule in Precious Metal Investing
"IF YOU DON’T HOLD IT, YOU DON’T OWN IT"
Gold ETF is an IOU of the company to pay you in gold, all you get is a paper contract (entirely worthless paper)
The question is how many gold do they have? Will you take their word for it when they say they have 2000 tonnes of it (which is the annual production of gold). Don’t be gullible to think they have enough gold to back up their paper promises, they haven’t been audited and there are no means on how to audit them. And same with banks, if they have your gold they can use it as collateral when they default, and send you a mail that they’re sorry they sold it without your consent. So go out there and buy PHYSICAL GOLD NOW!
Final Quote:
"What is the Golden Rule? He who has GOLD, RULES!"
First Rule in Precious Metal Investing
"IF YOU DON’T HOLD IT, YOU DON’T OWN IT"
Gold ETF is an IOU of the company to pay you in gold, all you get is a paper contract (entirely worthless paper)
The question is how many gold do they have? Will you take their word for it when they say they have 2000 tonnes of it (which is the annual production of gold). Don’t be gullible to think they have enough gold to back up their paper promises, they haven’t been audited and there are no means on how to audit them. And same with banks, if they have your gold they can use it as collateral when they default, and send you a mail that they’re sorry they sold it without your consent. So go out there and buy PHYSICAL GOLD NOW!
Final Quote:
"What is the Golden Rule? He who has GOLD, RULES!"
References :