Gold ETF means Gold Exchange Traded Fund . In simple terms , it is a mutual fund for gold , like the mutual fund which invests in shares on your behalf. This mutual fund- i.e Gold ETF – buy gold and safe keep it on your behalf.When you want to sell , you can sell it on the recognised stock exchange . If you want to get the gold in physical form, you can also get it .
In India , on the date , there are ten GOLD ETF listed on National Stock Exchange which is the only stock exchange where Gold ETF are traded right now. All the usual big players of mutual fund industry are also managing Gold ETF. Here is the list of listed Gold ETF as on 07/01/2011
How can you buy or sell?
Purchase of Gold ETF are as simple as buying mutual fund units or shares. You can buy online from these fund managers or many online broking firms like icicidirect and all major online broking firms. So basically you need
- Demat account
- account with a broker who is a member of NSE to buy a Gold ETF.
Some of the popular brokerage firms like ICICI Direct, HDFC Securities, KOTAK Securities , India Infoline, Geojit, IndiaBulls, Sharekhan gives both the aforesaid facilities. So just open account with them , and you can easily buy or seel from your home.
When you buy the units of GOLD ETF , the bought units are credited to your demat account. Each unit represents roughly one gram. Therefore, if you have bought 100 units , it means you will get credit for 100 units of GIOLD ETF which represents 100 grams of gold.
Yes, you can c0onvert the bought units to actual gold at any point of time. So, in aforesaid example , if you want to concert 100 units, you can get 10 grms from the fund which manages your GoldETF.