Pros and Cons of Investing in Gold ETF in India

Gold ETF are also known as Gold Exchange Traded Funds. There are certain advantages and disadvantages of investing in Gold ETFs in India. In this article I will explain you those pros and cons about investing in Gold ETF in India.

There are several advantages of investing in Gold ETF rather than Physical Gold. The one commonest advantage is you don’t have to fear about the security of the gold if it is a Demat Gold (Gold ETF). Another advantage is that the demat gold is the weightless while the physical gold is of heavy weight. And the third advantage is that the gold etf don’t attract the wealth tax because you actually don’t own the gold in the physical form.

Now, this is very important. The physical gold will attract the wealth tax above the certain limit. But the demat gold will not attract the wealth tax at all. This is the main advantage of owning a gold in the paper form.

Ok. So now let us discuss the disadvantages of the Gold ETF fund. Well, the only disadvantage of gold etf is that the fund management fee. The fund house can chare up to maximum 1% as a fund management fee. So this means that every year, 1% Gold will be eroded from your total wealth. This is the only thing that I don’t like about the Gold ETFs.

But well, if you want to accumulate gold for your daughter’s wedding in future than the gold etfs are the best way to accumulate the small amount of gold regularly over the time.