Is Gold ETF a preferred mode of investment for women?

Women looking to invest in gold may consider Gold ETFs as these are passive investment instruments based on gold prices. Chintan Haria, Head – Product Development and Strategy, ICICI Prudential AMC, says, “For portfolio purposes, a women investor can consider taking exposure to gold through one of the following gold investment vehicles – gold ETFs, gold fund/fund of funds or sovereign gold bonds.”

Compared to physical gold investments, they are less expensive and offer an investor the flexibility to purchase as low as one unit of gold. Furthermore, as the purchase will be in electronic form, the investor will not have to worry about the storage and security of the gold. Hence, “the investor is saved from the hassle of storage and security and the worry of gold purity,” adds Haria.

If you are looking to build a well-rounded portfolio or simply seeking to accumulate gold units, according to experts Gold ETFs emerge as a convenient and cost-efficient option to take exposure to the yellow metal as Gold is a safe haven is an asset. “It has the potential to hold value even during the most turbulent times which acts as a good hedge and can help in protecting your portfolio against inflation and global risks,” explains Haria.

Advantages of Investing in Gold ETFs
Gold should be looked at from an asset allocation point of view, as experts say the yellow metal acts as a hedge against volatility in financial assets. Haria says, “The general principle is that one can allocate around 10 per cent to 15 per cent of a portfolio towards gold.” However, the optimal allocation in one’s portfolio can be decided in consultation with a financial advisor.

For women investors without a Demat account, Haria explains, they can consider investing in the Gold Fund of Funds. “If one is planning to meet any future requirement of gold, say a wedding, then such an investor can consider doing a SIP for as low as Rs 1,000 every month in Gold Fund of Funds,” he adds. Note that, this will enable you as the investor to collect gold units over a period of time.

It goes without saying, when compared to physical gold, Gold ETFs offer some distinct advantages. To begin with, women investors, need not worry about storage and theft as it is held in Demat form, the cost of acquisition is low given the absence of making charges and other related expenses.

Haria points out, “There is absolute flexibility when it comes to buying and selling as gold ETFs are listed on the exchanges. One can carry out a transaction at any point in time of the trading hours.”

Also, there is no lock-in period when it comes to investing in Gold ETFs. Therefore, women investors will not have to wait to accumulate substantial sums of money to invest in God’s ETFs or Fund of Funds. You can start investing at as low as Rs 1000.

from The Financial Express https://ift.tt/CqnvuEV