Understanding Gold ETF AUM and Its Benefits

Gold ETF AUM, or assets under management, has seen significant growth in recent years, reaching a record high of $230 billion in 2020. This surge in popularity can be attributed to the rising demand for gold as a safe-haven investment.

The benefits of investing in gold ETFs are numerous. One of the primary advantages is the ability to diversify a portfolio, reducing reliance on traditional assets like stocks and bonds.

Gold ETFs also offer the convenience of fractional ownership, allowing investors to buy and sell small amounts of gold without having to purchase a full ounce. This feature makes gold more accessible to a wider range of investors.

A gold ETF is a type of investment that holds gold assets like gold bullions or futures contracts.

It's traded on a stock exchange, just like other stocks, and its price is directly linked to the gold price.

If the gold price increases by 2%, the ETF value may also increase by 2% approx.

You can buy and sell shares of the ETF on the stock exchange, just like any other stock.

The value of a gold ETF decreases if the gold price decreases.

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Investing in Gold ETF can be a lucrative option due to its ease of trading. The process is similar to trading stocks, making it a convenient choice for those already familiar with the process.

Easier trading is one of the key advantages of Gold ETFs. They can be traded during working hours, and gold prices are publicly available in the stock exchange, making the process transparent.

No entry or exit loads are associated with Gold ETFs, ensuring zero additional charges when purchasing or selling these funds. This is a significant benefit for investors who want to avoid unnecessary costs.

Tax benefits are also a significant advantage of Gold ETFs. They do not attract VAT or Securities Transaction Tax, allowing investors to save taxes on their investment.

Investing in gold ETF offers numerous benefits. One of the main advantages is the ease of trading, which is similar to buying and selling stocks. This makes the process straightforward, especially for those who are already familiar with trading stocks.

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No entry or exit loads are associated with gold ETFs, meaning you won't incur any additional charges when purchasing or selling these funds.

Tax benefits are another significant advantage of gold ETFs. Unlike physical gold, these traded funds don't attract VAT or Securities Transaction Tax, allowing you to save on taxes.

Gold prices are generally stable, which reduces the risk of market fluctuations. This makes gold ETFs a safer investment option, especially during times of economic uncertainty.

You can start investing in gold ETFs with as little as 1 unit, which represents one gram of gold. This makes it an ideal investment option for those with limited funds.

Gold ETFs can be used as collateral for secured loans, making it easier to access credit when needed. This can be a convenient option for those who require additional funds for various purposes.

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The SBI Gold ETF is managed by SBI Mutual Fund, which has a long history of managing funds.

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The fund's investment objective is to generate returns that correspond to the returns provided by the price of gold through investment in physical gold.

Launched on April 28, 2009, the SBI Gold ETF has a return since launch of 10.13%.

The fund's benchmark is the Domestic Price of Gold, which is a reliable measure of gold's value.

The SBI Gold ETF is an open-ended fund, meaning it can be bought and sold throughout the year.

Here's a summary of the fund's details:

Tax on gold ETFs is similar to that on physical gold, so be prepared to pay capital gains tax if you trade these funds and profit.

You'll be taxed on both short-term and long-term investments in gold ETFs.

For long-term investments of 36 months or longer, you'll pay a 20% capital gains tax, plus any applicable indexations.

Short-term investments, on the other hand, will attract capital gains tax according to your current tax slab.

This means you should carefully consider the tax implications before investing in gold ETFs.

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The SBI Gold ETF has an impressive AUM of Rs. 5,969.67 Cr, significantly higher than the other schemes listed.

The SBI Gold ETF has a 1-year return of 23.76%, which is comparable to the 23.85% return of the Axis Gold Fund Regular-Growth.

Here's a comparison of the AUM of the schemes:

The 5-year return of the SBI Gold ETF is 13.45%, which is slightly lower than the 13.53% return of the Axis Gold Fund Regular-Growth and the 13.42% return of the SBI Gold Fund-Growth.

The UTI Gold ETF FoF Regular - Growth has a 1-year return of 24.45%, which is the highest among the schemes listed.

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