Physical gold ETF. Perspectives

Physical gold ETF. Perspectives

Advantages of "paper gold"


As a rule, many investors add gold in one form or another to their portfolios. Of course, gold is poorly suited for trading. Low volatility is the main reason for this. Traditionally, gold is considered a defensive asset and serves to contain the negative effects of corrections in the stock market. You can invest in gold in several ways: buy physical gold in a bank branch, but you will have to pay 20% VAT, and this is already a minus to the potential profitability, and physical gold requires special storage and you can sell it back only to the bank. That is, the purchase and storage of physical gold seem irrelevant and inconvenient. A good alternative to physical gold is an ETF for gold, or, as it is also called, "paper gold".
Gold ETFs as an alternative to gold bullion.


The so-called "paper gold" has a number of advantages over physical gold: an ETF for gold can be quickly bought and, if necessary, quickly sold on the stock exchange, fixing profits. An ETF for gold exists in the form of shares of the fund and does not require special storage conditions. An ETF is held in a brokerage account like other securities. The price of one unit of the fund directly depends on the price of physical gold at the moment. If the price of gold rises, so does the share price of the "gold" ETF. As with any fund, there are management fees in gold ETFs, but they usually do not exceed a total of 1% for different management companies. And for some ETF providers, the commission does not exceed 0.5%, which is a huge advantage over physical gold, where already at the time of purchase you will have to pay 20% of the tax.


Gold ETF Review


Gold ETFs can be traded both in rubles and in foreign currency. There is no difference between them, funds in rubles and dollars are tied to the price of one asset - real gold. It is this ETF that is traded at a price of 876 per share, the commission of the management company in this case is 0.45%, the yield for 5 years in rubles is 75.17%, and the net weight of gold in the fund is 2,611 kg. Many experts recommend having up to 15% of gold in the investment portfolio. It is up to 15%, less is possible, more is not desirable. Gold itself is not an asset of growth, it is an asset that protects the portfolio from sharp depreciation, diversifying risks. The percentage of gold in the portfolio also depends on your investment strategy, age and investment profile.

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