Mirae Asset Mutual Fund has launched a new fund offer (NFO)- Mirae Asset Gold ETF. The same will open on February 9 and close on February 15. The allotment date is February 20 and the first Net Asset Value (NAV) date is February 21. Mirae Asset Gold ETF intends to track the performance of the domestic price of physical gold. Each unit of the ETF will represent roughly around .01 grams of gold.

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About gold ETF

Gold ETFs allow individuals to invest in gold in a dematerialised format, which can be bought and sold on the stock exchange just like shares. Gold equivalent to physical quantity is deposited in an electronic form, in the purchaser’s demat account.

These are listed on the stock exchange, where one can get real-time updates about their price. ETFs don’t have any exit loads, which means investors can buy or sell the units at any time during the market hours.

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Buying Gold ETFs means investors are purchasing gold in an electronic form. When they actually redeem Gold ETF, they don’t get physical gold, but receive the cash equivalent. Trading of gold ETFs takes place through a dematerialised account (Demat) and a broker, which makes it an extremely convenient way of electronically investing in gold.

Investing in gold ETF

Gold is considered to be an auspicious metal in Indian culture. Apart from this, it is an important asset class from an investment standpoint too. The two most common ways of gold investments in India are buying gold jewellery and buying gold bars/coins.

However, Gold ETF is a much safer and cost-efficient way of investing in gold, said Siddharth Srivastava, Head - ETF Product at Mirae Asset Mutual Fund.

According to Association of Mutual Funds of India (AMFI). gold ETFs are ideal for investors who wish to invest in gold but do not want to invest in physical gold due to the storage hassles/doubt about purity of gold and are also looking to get tax benefits. There is no premium or making charge, so investors stand to save money if their investment is substantial.

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