What are Gold BeES?

Short Answer

Gold BeES is a type of BeES (Benchmark Exchange Traded Securities). It is a type of ETF (Exchange Traded Fund) that's listed on the stock exchanges. This category of funds has a benchmark, in this scenario "Gold" which it tracks and follows. Gold BeEs has its underlying as Gold and the performance of the fund purely relies on the movement of Gold. Find out the advantages and features of Gold BeES.

Detailed Answer

What are BeES?

BeES is the short form of the Benchmark Exchange Traded Scheme. This is an ETF (Exchange-Traded Fund) that sets the underlying asset as the benchmark and gives moves in the same direction as the underlying.

Gold BeES

Gold BeES is a form of Bees (Benchmark Exchange Traded Securities) that keeps “Gold” as the benchmark. This moves as per the price of gold in real-time. This can be termed in a form of digital gold that investors can buy without the hassle of buying and storing physical gold.

Gold BeES have more than 97% of their holding in 99.9% pure Gold. Hence one can stay assured that their money is actually getting invested in Gold.

Cost of Buying Gold BeES

As an ETF there is no minimum amount to invest in gold bees. Gold bees are traded like stocks hence one can buy a minimum of 1 unit which is Rs 41.49 at the time when the price of Gold is Rs 47,000 approximately per 10 grams. There is a small cost on buying Gold bees which is the “Expense ratio” that every investor has to bear as the managing expenses of the fund. The Expense ratio for Gold Bees is 0.82% currently. This might be a tad on the higher side when comparing to some other ETFs but the difference is not significant.

Why buy Gold BeES?

Gold is considered to be a tool of diversification and also as a hedge against “Inflation”. Gold as an asset class retains its value and beats inflation in the long run. Due to this reason, Gold has become the primary choice of investors when there is uncertainty in the Equity Markets.

Therefore it is always wise to allocate some portion of the portfolio towards Gold which will protect the portfolio in times when the “Equity markets” don’t perform that well.

Buying gold in the physical form is not considered the best way of investment. It is due to the fact because there are many charges involved like making charges, GST, Wastage charge, etc. All these changes make the final product and the overall return diminished. Due to all these reasons investing in gold ETFs is the best option.

Advantages of Golf ETFs

  • Highly Liquid- Gold ETFs are highly liquid, one can buy and sell them on the stock exchange within minutes as per their requirements.
  • Liberty of Buying and selling price- An investor can place a Limit order while buying and selling their Gold ETFs which makes it much more convenient to the buyers and sellers.
  • No hassle of Storage- One can buy any quantities of Gold in the form of ETFs without worrying about storing it. ETFs are in dematerialized form. Only a Demat account is required to store the ETFs.

Gold ETFs

In conclusion, Gold ETFs is the best way to diversify into gold as it is stored in the Demat account. This ensures the safety and protection of the Gold. Gold ETFs track the price of gold hence one will get the same returns as gold. The high liquidity and flexibility of buying and selling make it an ideal choice, for investors who are willing to invest in Gold.

Tagged With: GoldExchange Traded FundsBeESGold ETfsgold bees
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Related FAQs

Why are ETF or Exchange Traded Funds not popular in India?

Exchange traded fund is a freely marketable security which tracks a particular index, commodity, bonds or combination of assets. they aren't popular as there is no additional tax incentives, not enough liquidity, under performs most of the time, lack of choices, lack of institutional interest, costs are low but not enough and lack of awareness.

How are ETFs different from Mutual Funds?

ETFs (Exchange Traded Funds) and Mutual Funds are similar investment vehicles that provide the investors various features. Both have their benefits and shortcomings. ETFs are a good option for passive investors who want to invest in a particular Index or Sector without much rebalancing. On the other hand, Mutual Funds are a better option for active investors who are more active with their investments. One can switch between funds according to their current strategies.

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ETFs are investment instruments that are listed on stock exchanges that offer investors to get exposure to a variety of asset classes. ETFs can be of different types tracking a particular asset class like Index, Commodity, and a particular sector. There are some changes in an ETF that include the Expense ratio and some other fixed charges charged by brokers, SEBI, etc.

Are ETFs only for stocks?

ETFs are a financial instrument made to track an underlying asset and provide similar returns based on the performance of the underlying. ETFs are listed on stock exchanges which make it easier to buy and sell at desired prices. ETFs are not only limited to stocks but cover a wide range of investment avenues like Commodities, Bonds, etc.

What are the types of ETFs available for investment?

Exchange-Traded Funds or ETFs are an investment tool that tracks particular securities like Equity, Commodity, Bonds, etc. ETFs are available for many categories from which one can choose from. These are listed on Stock Exchanges (NSE & BSE) hence there is ample liquidity and one can easily buy and sell these at their desired price during market hours. Some ETFs available for investment in Indian markets are Equity ETFs, Debt ETFs, etc.

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Can I trade or invest Rs 100 in the share market of India?

You can definitely trade or invest Rs 100 in Indian stock markets. There are no monetary requirements to enter the stock market hence you can buy any share that is trading under Rs 100. Apart from direct stock investing/ trading, there are some indirect ways to own shares over Rs 100. This can be done through Mutual Funds.

Can I buy 1 share of Nifty or Bank-Nifty?

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