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Invest in Indian Gold with SBI Gold ETF

Updated on July 3, 2011
indian gold etf is one of the best ways to invest your money
indian gold etf is one of the best ways to invest your money

Gold is often the most popular choice when people are planning to invest their money. Speaking of gold investment,Indiaturns out to be the largest country in this world when it comes to buying gold outputs and this happens each year. To tell the truth, this particular country alone demands 25% of the total gold stocks in the world annually. This may happen due to various reasons, one of which is probably because Indian people always consider gold as the ultimate symbol that represents well being as well as power. Putting such a high appreciation to gold, Indian people even use their gold jewelry sets quite often as an exchange or a warranty when they think they need a loan.

There are also quite a few types when it comes to investing money in Indian gold ETF. One quite popular option is the SBI gold ETF. This one is the latest addition investors will be able to find in the gold market in the country. SBI stands for State Bank ofIndiaand thus the SBI gold ETF is the ETF of the Indian bank.

The SBI gold ETF was first incepted in the country on March 30th in the year 2009. Even though it may have quite a high expense ratio at around two and a half percent, this does not necessarily make the SBI gold ETF a bad choice for investors. It is also worth the price of1 gram of gold.

As a matter of fact, it is often the case that the SBI gold ETF has a higher value compared to the other gold ETF types. One reason that may have made this possible is that the SBI gold ETF has the lowest degree when it comes to error in tracking. In addition to that, this particular Indian gold ETF type often proves to deliver solid returns most of the time.

By investing in the SBI gold ETF, investors are attempting to find areas with the potential of mirroring appreciation of the price of the gold commodity. At the same time, the investors are also attempting to minimize the overall negative effect that may possibly show up due to some unexpected declines.

However, in order to reach that goal, investors may need to invest a major portion of their asset, probably about 90% of it. They need to invest in gold bullion and related products. Also, they may also need to put some portions of their asset into money market instruments besides debt. This should not reach 10% of their portfolio, though, under most circumstances.

This is of utmost importance so that the investors can see the funds experiencing sharp increases. In addition to that, this also helps mitigate existing short term volatility, if any. This results in a more stable ETF compared to similar investment options.

After all being said, it can be concluded that the SBI gold ETF is the best bet for most investors as there is a better potential for the price of gold to go up. Better yet, not only the gold price will go up, the risk and volatility are also minimized quite significantly. As a result, the investors’ portfolio will be better balanced and diversified for quite a long term.


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    • paramarora profile image

      Param Arora 3 years ago from New Delhi

      Good Information