I want to start investing a fixed amount in a Gold ETF on a monthly basis to plan for my daughter's wedding, 10 years from now. However, at that time I will be requiring physical gold. Is there any Gold ETF which gives redemptions in the physical form? If yes, are there any minimum/maximum limits?
-Santosh Gore
No, retail investors cannot redeem their Gold ETF units in the form of physical gold. This provision is only available to large investors who can redeem units of the Gold ETF directly from the AMC and get the equivalent amount of physical gold. But the minimum number of units that the AMC would accept for redemption has to be in multiples of the Creation Unit. This creation unit is different for different AMCs, varying from 100 units to 1000 units. However, such redemptions could involve complicated tax implications.
This article was originally published on August 14, 2008.
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