In Indian families, gold has always been considered a true companion in bad times and the safest means of investment. But in the rapidly changing times, investment methods are also changing. Now sensible investors are preferring to invest money in Gold ETFs digitally instead of going to a goldsmith’s shop and buying physical gold i.e. jewelery or coins. The reason for this is also very clear. In this, neither does one have to bear any huge loss in making charge, nor is there any fear of keeping it in the safe or it being stolen. The biggest thing is that this method has come a long way in terms of earning also. If we look at the latest data of mutual funds revealed recently, it shows that some of the major gold ETFs of the country have given excellent annual compounded returns (CAGR) of up to 34% to investors in the last three years.
What is this mathematics of digital gold?
Gold ETF is actually a type of mutual fund product, which is directly listed in the stock exchange. Like shares of any common company, you can easily buy or sell it through your demat account. This is directly related to the actual prices of gold prevailing in the domestic market. That means, as the price of gold goes up in the market, the value of the gold ETF purchased by you also starts increasing at the same pace. If seen from the common man’s point of view, it provides the facility of immediate withdrawal of money (liquidity) when needed. Besides, the tracking difference is also very less.
UTI fund proved to be the biggest Alexander
If we talk about funds with Assets Under Management (AUM) of more than Rs 1500 crore, then UTI Gold ETF has had the best performance. According to the data till July 2, this fund has given an annual return of 34.0% to its investors in the last three years. Surprisingly, its benchmark had given returns of only 1.7% during the same period. That means this fund has beaten its benchmark by a huge margin of 32.2%. Even in one year performance, UTI Gold ETF holds the first position with an excellent return of 45.6%, while its benchmark could grow only 10.1%.
Top five earning names
- UTI Gold ETF: This fund has given returns of 34.0% in three years and 45.6% in one year. Its total fund size is Rs 4,382.2 crore.
- ICICI Pru Gold ETF: This fund, which has given a profit of 33.7% in three years, is the largest fund in the country in terms of size with a huge corpus of Rs 27,578.2 crore. It has given 45.3% returns in one year.
- Mirae Asset Gold ETF: This fund has given 33.6% profit in three years. Its performance has been slightly better than others during short-term (1 to 3 months) downturns. During this period its decline was limited to -8.6% to -2.5%.
- Aditya Birla SL Gold ETF: It has given returns of 33.6% in three years. At the same time, in the period of one year, it has given a huge profit of 45.4% to the investors.
- Kotak Gold ETF: With 33.6% profit in three years and 45.2% profit in one year, it is also included in the top 5 list. Its total fund size is Rs 14,891.9 crore.
What is special for the common investor?
If you also want to include the shine of gold in your portfolio, then this is the time for digital investment. Compared to physical gold, ETF gives you complete guarantee of purity. You neither have to bear the huge expense of a bank locker to keep the gold safe, nor do you have to face any kind of deduction in the name of making charges while selling it. This ‘digital gold’ listed in the stock market has become a very strong option to beat inflation in today’s times.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
