Give a meaningful and glittering gift in form of gold ETF
This post will offer more details on the concept of gold ETF and how this instrument can be an indirect opportunity for buying gold bullion to the person whom you gift it.
Generally, the price of one unit of gold ETF represents roughly one gram of gold. These are passively managed funds hence their NAV will basically track the gold price in the open market. The holder can buy and sell the units just like one would buy and sell shares.
Despite recent correction after a sustained rally, gold prices are expected to firm up further over the coming few years. This will lead to a corresponding increase in the NAV of gold ETFs. Especially owing to the debasement that many countries are subjecting their respective currencies to, bullion would emerge as a valuable asset.
Investment expert Sandeep Shanbhag noted in a recent article: “In times of turbulence, gold has gained over almost 57% in the last couple of years. The moot question is: does it really make sense to invest in the metal at current levels? Look at gold ETF as an investment essentially as a hedge against inflation and its virtue of negative correlation with other asset classes such as fixed income securities, commodities and stocks during uncertain times.
When markets are erratic and unpredictable, the wise thing to do is just to step up exposure to an asset, which would infuse a semblance of strength and stability to the portfolio. The simplest and probably the most efficient way to do this is investing in a gold ETF.”
However, you should weigh its pros and cons. For example, investors should not look at gold on the basis of returns in a small time frame. Give them a long enough period to multiply your wealth. This won’t happen overnight. Someone looking to give a meaningful gift sure should consider gold ETFs.
Tags: gift, giftex, Gold, tips
