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GOLD EXCHANGE TRADED FUNDS (GETF):

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In India, Mutual Fund Schemes based on Gold or Gold related instruments were introduced in 2006. Gold Exchange Traded Fund Schemes are permitted to invest primarily in:

(a) Gold;

(b) Gold related instruments. 

Gold related instrument means any instrument having gold as underlying assets as specified by the SEBI. The Net Asset Value of this mutual fund is based on the domestic price of Gold or its related instruments. 

Example: SBI Gold ETF, UTI Gold ETF, Kotak Gold ETF & Reliance Gold ETF  In other words, it is a listed securities backed by allocated gold held in the custody of a Bank for and on behalf of Investors. This fund allows investors to invest their funds in the bullion market without taking physical delivery of Gold. 

Features:

(i) Cheapest form of pure physical gold with no premium.

(ii) No issues wastage like physical gold in the form of Jewellery.

(iii) No tax on it like VAT & Wealth Tax.

(iv) No Storage or insurance cost.

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