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?