The reasons for opting e-gold over
Gold ETF are good enough, to choose between the two. Investors can invest in
gold through ETFs as well through e-gold of national spot exchange.There are
some minor differences in ETF and e-gold.
1.Fund managers track gold prices
through Net Asset Value (NAV).NAV of Gold ETF is net of liabilities so NAV and
returns of different ETFs are different.
2.While in NSEL e-gold investors
directly tracks gold prices.
3.NAV of ETFs are inclusive of
custodian charges.while NSEL do not charge any holding charges.
4.In e-gold ,investors are directly
holding the gold units ,,,while in Gold ETFs gold is actually owned by mutual
fund AMCs.
5.Physical delivery in small denominations
is possible in e-gold.while in gold ETFs physical delivery depends on
sole discretion of ETFs.
6.ETFs may offer delivery for
investors holding Gold of higher amount.
7.We can invest in gold ETF only up
to 3:30 PM IST as market get closed.while spot market is open till midnight and
we can invest in e-gold series till 11:30 PM.Suppose if gold ETF closed
with NAV of 2300 (Time : 3:30 pm) and get closed at e-gold at 2330(At 11:30
pm).Then there is a difference of Rs.30 per gram in both the prices.Gold ETF
will try to cover up this difference on opening itself.Investors will not get
opportunity to get the price in between.
8.In both cases,buy-sell
intraday/delivery brokerages are payable which are in general in the range of
0.3 to 1%.
9.E-gold will be taxed like a
Physical gold while Gold ETFs are taxed as Non equity mutual fund
From above, we can observe that
E-gold has got edge over Gold ETF.
So, it is recommended to to
invest in gold via E-gold.
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