Historically, gold has been used as a currency and a symbol of wealth and status. As per World Gold Council data, India is one of the largest markets for gold. A three-year old study by the council even highlighted how Indian households are largest hoarders of the precious metal globally.
For many individuals, gold plays an important role in their investment portfolio as this asset can serve as a hedge against currency risk and inflation. Owning physical gold has been a common way to include the metal as an investment instrument, be it in the form of jewellery, coins or bars. But with these also come additional worries – additional costs like making charges and ensuring safe storage of gold.
There are multiple avenues now available for investors looking to buy gold. These alternatives do away with the disadvantages of owning the metal in its physical form.
- Digital gold
Digital gold is a new investment instrument that allows investors to buy gold in virtual form, without having to worry about its storage. Investors have the options to buy fractions of the metal and accumulate over time to exchange it for physical gold.
- Gold ETFs
Gold Exchange Traded Funds (ETFs) are instruments traded on the stock exchange, with gold as their underlying asset. A brokerage fee and minor fund management charges are applicable here, and you can sell them anytime you wish at the prevailing market prices.
- Sovereign Gold Bonds (SGBs)
Issued by the Reserve Bank of India (RBI) on behalf of the Government of India, Sovereign Gold Bonds (SGBs) are securities that come with a lock-in period of eight years, with each unit denominating a gram of gold. These are offered multiple times in a year, and you can choose to invest in a maximum of 4 kg gold per annum.
- Gold mutual funds
Gold mutual funds are funds that invest in Gold ETFs. You have the option to invest a lump sum amount or opt for an SIP to invest in gold mutual funds.
Invest in gold with the help of online platforms
If you are looking to diversify your portfolio by investing in gold-backed instruments, explore your options through a financial expert or an advisory online platform that offers investment options in the form of SGBs, gold ETFs and gold mutual funds.