Gold is one of the favourite investment avenue for every Indian from ancient time. It ha scharm that none came compared to. Gold must be a part of one's investment portfolio in a whole by about 10-15%. So where to buy??

From Bank???- I don't think its a wise descision as you will get less on selling in market. However it gives peace of mind for purity. (Cost of Purchase is very high)

From Jewellers???-  Again concerns are: Purity & Safety .

Gold Funds???-  Gold Fund are having Gold as underlying assets. You are purchaing gold in Paper only. So what you get??- Peace, safety, but mssing the feel of possession!

So, what may be the verdict

From investment prospective it is always wiser to buy gold by a medium which is reliable, safe ,saleable (Liquidity), cost effective and gold funds score on all these aspects.

Earlier Gold fund can be bought only through demat account which was more cost effective ( ignoring the charges for demat) as compared to Gold fund floated by one of the MF company which is FoF. This will add to the expense ratio of the fund which may be around 1% additional to expense ration of gold ETF. This however give flexibilty of Lower ( as low as Rs. 100 pm) and Systemetic Investment.

So be informed before investing.

 One more point

While choosing Gold Funds you must take have look at underlying assets.
Whether the underlying is Physical Gold or Gold futures.
Choosing a fund with Gold futures as underlying will be a bit risky.
Prefer for the funds with Physical Gold handling.

 

The best way to invest in Gold is through GoldBees. It's an ETF by Benchmark Mutual Fund company. Least expensie and most efficient way of investing in Gold. You can buy and sell through your trading account just like normal shares.