What is Gold ETF & Its 5 Benefits? 


You may come across a variety of investments in the stock market. One of them is the gold etfs. Considering the value of gold in the historical & even today, you can invest in the gold in a physical or electronic format.

Which is better: Physical gold or the other gold forms?

1. Gold ETFs can offer investors a way to gain exposure to the metal without having to buy physical gold or deal with the associated risks and costs.

2. Another important Gold ETFs can provide liquidity to the gold market, making it easier for investors to buy and sell shares.

3.The gold etfs are important in the stock market because they allow investors to gain exposure to gold without having to own the metal itself.

4. You can also say that the gold ETFs have been responsible for helping to increase prices of gold over the years. 

Lets Understand what is Gold ETFs?

Gold ETFs, or you can say that exchange traded funds, these are funds which invest in physical gold or gold-related assets. These are designated to track  the price of gold that provide the investor a clear view about the gold’s market or live price of the gold entity. 

You can buy or sell shares on the stock exchange, similarly you can also trade gold etfs in the stock market. This also provides investors an easy & quick way to invest in gold rather than its physical form of gold which comes with extra charges and trouble of storing it safely.

Here are the 5 Benefits of Investing in Gold ETFs

Benefit #1: Diversification

Gold ETFs provide investors with the opportunity to diversify their portfolios by exposing them to the market for gold. The investment in gold could help in reducing the risks of an investment portfolio since it typically is not in a positive relationship with other investments like bonds and stocks. 

The addition of Gold ETFs in the portfolio may help lower the risk of the portfolio, and also offer protection against the risk of the market’s declines.

Benefit #2: Liquidity

One of the major benefits that comes with Gold ETFs is the liquidity they offer. They can be purchased and sold at the stock exchanges at any time during the trading hours and provide buyers with instant access to their money. 

This can be a huge advantage over physical gold that can be expensive and difficult to purchase and sell.

Benefit #3: Cost-effectiveness

Gold ETFs can be a more efficient  option  in terms of capital to put money into gold. Contrary to physical gold, that often needs the storage of a warehouse and insurance 

The Gold ETFs are low in charges for management and there are without hidden fees. This is a desirable alternative for those who wish to gain exposure to the market for gold without the costs associated with owning physical gold.

Benefit #4: Tax Efficiency

Gold ETFs can be tax-efficient investments. They’re treated the same way as securities and therefore not subject to capital gains tax upon sale. The tax rate for ETFs is less than that of physical gold. 

The Gold ETFs are an appealing investment choice that can help investors lower their tax burden.

Benefit #5: Simplicity

Gold ETFs are simple to comprehend and easy to start your investments. They trade through stock exchanges just as stocks. You are able to  purchase and sell gold etfs through an account with a brokerage platform. 

They are therefore accessible to an array of investors from novice to experts in trading.

Quick Steps to invest in Gold ETFs 

You can invest in gold etfs, by following the steps mentioned below:

No.1 Select a trusted stock broker such as Kotak Securities and open a 3 in 1 account. I.e  a savings account, a demat account, and a trading account.

No.2: After account opening process through the Kotak Securities app (KST) or other demat app you research for gold etfs, and choose the investment which fits in your risk tolerance

No.3  Add funds on your trading account, and then place an order for the gold etfs. You can check all your investments and transactions on your demat account.


In the following article about the gold etfs, you can learn about the advantages and discover how the gold etfs is better than physical gold investments. 

Apart from the ease of investment you can also increase your financial portfolio through gold investments which can be in the form of bonds, ETFs or investing in mutual funds that consist of gold instruments in the following funds. 

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