Akshaya Tritiya 2024: Why investing in Gold ETFs is a good option

In recent times, many investors have turned to gold as a means of protecting against inflation and geopolitical uncertainties. Gold as a commodity is often advised by financial gurus or professionals as they help lower the risks in their investment recommendations.

Buying of gold on Akshaya Tritiya is considered one of the sacred days to invest in the yellow metal. Some say this means prosperity that never leaves. In the past, gold was often bought physically; today, there are modern investing ways such as Gold ETFs (Exchange-Traded Funds). However, buying Gold ETFs on Akshaya Tritiya is good because one participates in the age-old culture of buying gold and still engaging in new methods of investing.

From 2003 to 2023, there was a continuous rise in gold prices. This increase in the value of gold started from ₹5,600 per carat and in 2023 stands at ₹65,330 which presents an impressive CAGR of 13.07%. This can be compared with the historical yield rates of an index fund. As per today’s market, it is quoting at ₹71,109 with a YTD change reflecting gains amounting to 12%.

If you had started investing ₹10,000 every month in gold back in 2004 by now your investment in value would have appreciated to about ₹1.15 crore. From the Akshay Tritiya of 2023, gold has given a return of 18.78% till Akshay Tritiya of 2024. Those who invested in gold during last year’s Akshaya Tritiya have profited exceedingly in just twelve months.

Why is the Gold ETF a good option?

Instrument wise the Gold ETF offers a more efficient and accessible way to invest in gold. Hence, their high liquidity, ease of management and cost-effectiveness make it possible for many investors to consider them when looking for financial instruments to use in investing.

• No physical holding

Unlike physical gold, you don't have to worry about theft, damage, or secure storage with Gold ETFs. They are held electronically in a demat account, similar to stocks.

• Lower fees

Gold ETFs generally have lower expense ratios compared to gold mutual funds. It also avoids making charges associated with buying physical gold.

• Fractional investment

You can buy and sell ETFs in small units, allowing you to invest even with a smaller amount compared to buying a whole gold bar.

• Easy to trade

Gold ETFs trade on stock exchanges just like shares, offering high liquidity. You can easily buy and sell them whenever you want.

• Real-time tracking

Gold ETF prices directly reflect the underlying gold price, providing transparency and allowing you to monitor your investment easily.

• Diversification

Gold ETFs can add diversification to your portfolio, potentially reducing overall risk.

• Hedge against inflation

Gold is often seen as a hedge against inflation, as its price can rise with inflation.

Following are the top five Gold ETFs (AUM-wise) with historical Returns

Returns are in %

For anyone who would want to invest in gold without stress or risks and high yields, then investing in Gold ETFs seems unbeatable compared to buying the actual precious metal.