About Gold exchange-traded funds:
- These are commodity-based exchange-traded funds with an underlying asset as gold.
- These are passive investment instruments that are based on gold prices and invest in gold bullion.
- Gold ETFs are units representing physical gold, which may be in paper or dematerialised form.
- One unit of this und is equal to 1 gram of gold and is backed by physical gold of very high purity.
- They are listed and traded on the National Stock Exchange of India (NSE) and Bombay Stock Exchange Ltd. (BSE).
- There is complete transparency on the holdings of a Gold ETF due to its direct gold pricing.
What is an Exchange Traded Fund (ETF)?
- It is a collection of investments such as equities or bonds.
- It is a basket of securities that trades on an exchange just like a stock does.
- It can contain all types of investments, including stocks, commodities, or bonds.
- They have cheaper fees than other types of funds.
- These funds have much lower expenses as compared to physical gold investments.
