Gold ETFs are Cheaper

What is the difference between gold ETFs and gold funds? Which one is better?
- Vipul

A gold ETF invests directly into gold, while a gold fund invests in a gold ETF. To invest in a gold ETF, you need to have a demat account. On the other hand, gold funds are bought like regular open-ended mutual funds. The NAV of both kinds of funds changes as per the fluctuations in the price of gold. As far as their expense ratio is concerned, a gold fund will be 0.5 per cent to 1 per cent costlier than gold ETFs. All gold ETFs deliver similar kind of returns.

This article was originally published on January 22, 2013.