SGBs, digital gold, ETFs- Ways you can add gold to your portfolio

Mon Jan 20 2025

Investing in gold

Gold has been a trusted investment option as it helps safeguard against inflation and economic uncertainties. Systematic investment helps build wealth over time and diversifies the portfolios. Here are some investing choices.

Gold ETFs & mutual funds

Gold ETFs: These exchange-traded funds represent physical gold and are traded on stock exchanges. They offer transparency, liquidity and lower costs compared to physical gold. Gold funds: These funds invest in gold ETFs or related securities and allow investors to contribute systematically via SIPs (systematic investment plans).

Sovereign gold bonds

Issued by the government of India, SGBs provide an efficient way to invest in gold. They offer 2.5% annual interest, along with the potential of gold price appreciation. Investors can purchase SGBs in periodic tranches.

Digital gold

Digital platforms like mobile wallets and banking apps allow investors to buy gold in small amounts. These prove to be a very easy and convenient way of investing in gold starting with a minimum investment of Rs.1.

Gold saving schemes

Many jewellers offer gold saving schemes, wherein investors make monthly deposits, redeemable as gold jewellery at maturity. These schemes are best suited for individuals planning future gold purchases, especially for weddings or other such events.

Points to note

• It is important to choose the investment method based on financial goals, be it for returns, safety or consumption.
• It is prudent to allocate a portion of the portfolio, say, 5-10%, to gold to balance risks.
• One should evaluate charges like storage fee, fund management fee and making charges for jewellery.

Content courtesy Centre for Investment Education and Learning (CIEL).

Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.

Source: https://economictimes.indiatimes.com/