Gold ETF investment – Goldbees or R* gold shares?

POSTED BY VG ON May 11, 2014 11:17 pm COMMENTS (6)

Hi,

I am looking to invest into Gold ETF and having difficulty choosing between Goldbees (Goldman sachs gold etf) and Reliance R* gold shares. Reason for investment is diversification from equity and bcoz i feel there are chances of decent return over long term.

Initially I was more favored towards Goldbees since its been in existence for long and has the highest liquidity. However on comparing the returns on Valuresearch, I find that R* has performed much better than Goldbees (i.e. R* returns are more closer to actual gold returns). This is also reflected in the charts – R* has tracked gold price much more closely as compared to Goldbees.I also noted that their expense ratios are nearly same.

So does anyone know what’s the reason for this difference between performances of the 2 ETFs?  Could it be because these funds are also allowed to invest upto 10% in Money mkt, and here Goldbees may be investing more than R*, thereby increasing its tracking error?

6 replies on this article “Gold ETF investment – Goldbees or R* gold shares?”

  1. Vaibhav says:
    May 15, 2014 at 10:47 pm

    Ashal,

    Haha…am not saying any such thing! As I mentioned originally, am investing in gold for diversifying my portfolio and expecting ‘decent’ returns along with diversification. But I definitely don’t expect it to beat equity – I suppose you would agree on this, so no need to refer any data 🙂
    I plan to invest a modest amount in gold via ETF, see how it performs as a diversifying agent and if needed increase/reduce my gold investment.

    Having clarified that, would be great if u can offer some suggestion on my original query 🙂

    Reply
  2. ashalanshu says:
    May 15, 2014 at 11:31 am

    Dear Vaibhav, you are saying that Gold is a super duper return kind asset. I want to confirm that thing before answering. How about checking in USD for Gold data in past?

    Thanks

    Ashal

    Reply
  3. Vaibhav says:
    May 14, 2014 at 5:55 pm

    Hi Ashal,

    Sorry I do not have any source which gives indian gold returns over such long periods.

    But may I ask how this data would help in answering my original query?
    I feel the gold returns info provided by Valueresearch should suffice in comparing the ETF’s performance with actual gold performance over last few yrs – is it not so?

    Reply
  4. ashalanshu says:
    May 14, 2014 at 11:41 am

    Dear Vaibhav, please read my query above. I’m asking for physical gold return over long periods say 25-30-35Y.

    Thanks

    Ashal

    Reply
  5. Vaibhav says:
    May 13, 2014 at 11:03 pm

    Hi Ashal,

    Well I am referring the % returns indicated against ‘Domestic price of Gold’ at below link:

    http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6060&utm_source=direct-click&utm_medium=funds&utm_term=r*+gold&utm_content=R*Shares+Gold+ETF&utm_campaign=search

    Reply
  6. ashalanshu says:
    May 12, 2014 at 4:08 am

    Dear Vaibhav, what’s the actual return of Gold in real long term?

    Thanks

    Ashal

    Reply

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