Gold ETF is a financial instrument like a mutual fund whose value depends on the price of gold. As the price of gold rises, the price of the ETF is also expected to rise by the same amount.
Similarly, a fall in the price of gold will also be reflected by a drop in the price of the ETF. However, unlike a mutual fund, the units of gold ETF have to be purchased or sold on the stock market.
Merits of investing in Gold ETFs :
Gold ETFs have the advantages such as lack of making charges, impurity risk, resale hassles, absence of wealth tax and long-term capital gains tax.
According to financial experts, investors can invest a small part of their portfolio in this fund for the purpose of diversification and hedging.
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