Gold Funds Vs. Physical Gold: Which is a Better Investment?

sociallykeeda.com

Investing in gold has been a popular preference for many people through the years, as it is usually referred, to as a safe investment option among others. There are specific ways to invest in gold. The most common options include gold funds and physical gold. This article will explain what are these gold investments and evaluate them to help you determine which one probably will be better for you.

What are Gold Funds?

Gold funds are a form of investment where you place your cash into a fund that invests in gold-related belongings. These finances are controlled by specialists who make choices about buying and selling gold on your behalf. There are various kinds of gold funds. Some of them include the following.

Gold Exchange Traded Funds (ETFs): This type of gold fund tracks the rate of gold and can be offered and sold on stock exchanges like everyday shares.
Gold Mutual Funds: These funds invest in gold ETFs or stocks of gold mining companies.
Gold Savings Funds: They allow you to invest small amounts frequently, which are then used for buying gold ETFs.

What is Physical Gold?

Physical gold refers to actual, tangible gold that you can hold in your hand. This includes:

Gold coins: These are small, standardised pieces of gold often used for investment.
Gold bars: These bars are larger chunks of gold, usually bought by experienced investors or institutions.
Gold jewellery: While primarily worn as ornaments, gold jewellery can also be considered as an investment

Comparing Gold Funds and Physical Gold

Now, let's look at how gold funds and physical gold compare in different aspects.

Aspect	Gold Funds	Physical Gold
Buying and Selling	It's quite simple to buy and sell gold funds. You can do it online on your smartphone or even laptop.	Buying physical gold entails going to a jeweller or bank, choosing the gold, and making the purchase. Selling may be extra complicated as you need to find a customer and negotiate with the pricing factor.
Storage and Safety	With gold funds, you do not need to secure your gold assets. Those who manage the fund scheme will take care of this for you.	Here, you have to handle your physical gold mostly on your own. You may hide it at home or keep it safe in a bank locker.
Quality	Gold funds typically spend money on good quality gold. You do not need to consider whether the gold is pure or not.	When buying physical gold, you need to be careful about the purity. It's important to buy from reputable sellers and check for proper certification.
Starting Amount	You can start investing in gold funds with a small amount of funds, which can be as little as 500 rupees a month.	To buy physical gold, you usually need more money to start. You might have to buy at least one gram, which can cost quite a bit.
Returns	The returns from gold funds closely follow gold prices. However, some charges like fund management fees can slightly reduce your returns.	The value of physical gold directly reflects the current gold price. However, when you buy physical gold, you often pay extra charges like making charges for jewellery or premiums on coins.
Liquidity	Gold funds are generally very liquid. You can usually sell your units quickly and get your funds within a few days.	Physical gold can be less liquid. Finding a buyer for your gold jewellery or coins might take time, and you might not always get the best price.

Which is Better: Gold Funds or Physical Gold?

You may invest in gold funds using the right mutual fund investment app. However, the choice between gold funds and physical gold depends on your personal preferences and financial goals. The following are some situations where they might be more suitable.

Gold Funds might be better if:

You want an easy, low-maintenance way to invest in gold
You prefer to start with small investments
You’re not comfortable with the storage and security on your own
You want to be able to buy and sell quickly

Physical Gold might be better if:

You like to own tangible assets
You want gold that you can use (like jewellery)
You're comfortable with storing and securing valuable items
You prefer investments

Conclusion

Both gold funds and physical gold can be a suitable approach to investing in gold. It's worth noting that many investors like to have a mixture of both gold funds and physical gold in their portfolio. This strategy can provide the benefits of both kinds of gold investments. To invest in gold funds, you must get a reliable trading app first. For this, you consider trusted platforms like the Axis mutual funds app which has a user-friendly interface and many useful features. You may choose between gold funds and physical gold based on your financial condition and investment goals. Understanding the differences between them will help you make the right decision that suits your needs.

To stay updated with the latest bollywood news, follow us on Instagram and Twitter and visit Socially Keeda, which is updated daily.

Join Whatsapp Channel Join Telegram Channel

sociallykeeda

SociallyKeeda: Latest News and events across the globe, providing information on the topics including Sports, Entertainment, India and world news.