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POSTED BY ON November 25, 2010 1:58 pm COMMENTS (2)
I see there are few Gold based ETF funds in market.Most of them are based on 1gram value of gold.My question is what should be the selection criteria for which ETF to pick? Does it make any difference at all?If so how? as gold prices are same across india or am i missing something?
the only difference is the charges they apply.Here there wont be fund management charge as its passive managed fund..
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@prabeesh
I guess you need to check following things:
1. gram value of gold for each ETF units. some are offering each unit as one gram and some as half gram of gold. you can select based on your convenience.
2. AMC charges which varies between 1-1.5%. lower is the better one.
3. volume of company’s ETF traded in NSE. Its good to have one with greater liquidity.
Jagadees
Even passively managed funds incur FMC. In gold ETFs at present, the FMC is 1-1.5% per year plus include the buying and selling transaction costs, plus capital gains tax (gold funds are taxed differently than equity funds in which LTCG is zero).
The cost of gold ETF is related to the international gold price combined with rupee-dollar/pound conversion.
Also go through this post.
http://www.subramoney.com/2010/07/gold-etf-and-gold-mutual-funds-must-you-invest/
As happens, every asset class has its own pros and cons & “All that glitters is not gold”.
Ramesh