SBI GETS Review: Gold Investment in SBI

Let us today review the SBI Gold Exchange Traded Scheme (GETS). SBI GETS is the Gold ETF which primarily invest in physical gold and its 1 unit (NAV) tracks the price of 1 gram of gold in real time. Thus, the price of 1 unit of SBI GETS will be that of 1 gram of gold on that day.

The main purpose behind launching this scheme is to attract the investors who want to invest their money in gold. So Why SBI GETS and not the physical gold?

Well, this is because the physical gold has 3 main disadvantages.

- Safety & Security Issue
- Purity Issues
- Wealth Tax

If you want to invest in physical gold means in gold coins and bars than the above 3 will be the main concerns about the physical gold. But the advantage of SBI GETS is that, it’s the Paper Gold also known as Demat Gold.

The paper gold does not have any purity or safety issues. And more over, it does not attract any wealth tax. While owning a physical gold above certain limit attracts the wealth tax.

The Capital Allocation on SBI GETS is as follows.

- Gold and Gold Bullion – 90-100%
- Money Market Instruments – 0-10%

SBI Gold ETF Versus Other Fund House ETFs

What is the difference between the SBI GETS and the gold ETFs offered by other fund houses? Kotak, Benchmark and Reliance also offer the same kind of ETFs than what is the difference? Well, there is not a dime of difference between them. All the gold ETFs work on the same fundamentals.

I have invested in Reliance Gold ETF. Should I Exit from it and shift to SBI GETS?

Many people ask me this question. Well, if you have already invested in one ETF than there is no need to shift to another ETF. This is because ETFs don’t function like Equity funds where they have to chase the benchmark and the peers. Here the Gold ETF has to provide you the value that gold offers you.

When you invest your money in Gold ETF, the fund manager will invest that money in physical gold and gold bullion market. That’s all. So the NAV will fluctuate according to the price of gold in the world market. That’s all.

But well, if you have never invested in Paper Gold than SBI GETS can be a good fund to start investing in Gold.