DSP Gold ETF is an exchange-traded fund offered by DSP Mutual Fund in India. It allows investors to gain exposure to gold by investing in securities that track the price of gold. Here are some key features of DSP Gold ETF:
Underlying Asset
- The ETF is designed to closely track the price of gold. It invests primarily in physical gold of 99.5% purity or higher.
Benefits
- Liquidity: Units can be traded on stock exchanges like shares.
- Transparency: Gold prices are tracked and disclosed daily.
- Cost-Effective: Investors can avoid the making charges and storage costs associated with physical gold.
- Convenience: Eliminates the need to store physical gold while still providing similar exposure.
Investment Method
- Units can be purchased or sold via stock exchanges during trading hours.
- Units represent a fraction of physical gold, typically 1 unit = 1 gram or a fraction of a gram of gold.
Who Should Invest?
- Investors looking for a secure investment tied to gold prices.
- Those seeking to diversify their portfolio with gold as a hedge against inflation or currency fluctuations.
Tax Implications
- Gains are taxed as capital gains. Long-term capital gains tax is applicable after 3 years, with indexation benefits.
- No GST is charged on gold ETFs, unlike physical gold.
Risks
- Subject to price fluctuations in gold.
- Tracking error due to fund expenses and other operational factors.
You can invest in DSP Gold ETF through a Demat account and trading platform or directly via DSP Mutual Fund’s website, depending on the options they provide.
Is DSP Gold ETF a Good Investment?
Whether DSP Gold ETF (or any gold ETF) is a good investment depends on your financial goals, risk tolerance, and portfolio diversification strategy. Here are the key factors to help you evaluate if it’s suitable for you:
Advantages of Investing in DSP Gold ETF
(1) Hedge Against Inflation
Gold tends to retain value and often appreciates during inflationary periods, making it a good hedge against inflation.
(2) Diversification
Gold has a low correlation with other asset classes, such as equities and fixed income, which helps reduce overall portfolio risk.
(3) Liquidity
Gold ETFs like DSP Gold ETF can be easily traded on stock exchanges, providing better liquidity compared to physical gold.
(4) Cost-Effective
Gold ETFs avoid making charges, storage costs, and the risk of theft associated with physical gold.
(5) Market-Linked Returns
The performance of the ETF closely tracks the market price of gold, giving you exposure to price movements.
Things to Consider Before Investing
(1) Volatility in Gold Prices
Gold prices can be volatile and are influenced by factors such as geopolitical events, central bank policies, and currency fluctuations.
(2) No Income Generation
Unlike equities or bonds, gold does not generate dividends or interest, which may limit its appeal as an income-generating asset.
(3) Expense Ratio
The ETF has a small annual expense ratio, which can slightly reduce returns over time.
(4) Tracking Error
Gold ETFs may not perfectly match the price movements of physical gold due to operational costs.
(5) Short-Term vs. Long-Term Goals
Gold typically performs well during economic uncertainty but may underperform in stable or growth-driven markets where equities do better.
Who Should Invest in DSP Gold ETF?
Investors Seeking Safety
- If you want to safeguard your investments during volatile market conditions, gold ETFs can serve as a safe-haven asset.
Diversification
- A small allocation to gold (5-10% of your portfolio) can help diversify risks.
Convenience Seekers
- If you prefer the ease of holding gold without the hassles of physical storage, a gold ETF is a great choice.
When Might DSP Gold ETF Not Be Ideal?
- If you prefer high-growth investments and are comfortable with higher risk (e.g., equities or mutual funds).
- If you’re looking for regular income, as gold ETFs do not provide periodic payouts.
- During periods of economic growth, when equities and other riskier asset classes typically outperform gold.
Bottom Line
DSP Gold ETF is a good investment if you want to include gold as part of a diversified portfolio or as a hedge against market volatility and inflation. However, gold should not be your sole investment but rather a part of a balanced strategy. Before investing, assess your financial goals and consult with a financial advisor if needed.
DSP Gold ETF Returns
Here’s a table summarizing the historical returns of DSP Gold ETF, based on available data:
| Time Period | Returns | Remarks |
| 1 Month | ~3.5% | Reflects recent gold price movement. |
| 3 Months | ~6.2% | Indicates a short-term upward trend in gold prices. |
| 6 Month | ~12.8% | Strong medium-term performance. |
| 1 Year | ~21.49% | Excellent returns due to rising gold prices. |
| Since Inception | ~15.09% (Annualized) | Steady long-term performance since the fund’s inception. |
Notes
- Performance Basis: Returns are approximate and depend on market movements in gold prices.
- Inception Date: DSP Gold ETF launched on April 28, 2023.
- Tracking Error: The ETF may have minor deviations from actual gold prices due to fund expenses.
DSP Gold ETF Direct – Growth
DSP Gold ETF Direct-Growth is an investment option provided by DSP Mutual Fund that allows investors to gain exposure to gold prices through an exchange-traded fund. Here’s a detailed overview:
| Particulars | Details |
| Fund Name | DSP Gold ETF Direct – Growth |
| Fund Category | Exchange Traded Fund (ETF) |
| Fund Manager | Abhishek Ghosh |
| Launch Date | April 28, 2023 |
| Benchmark Index | Domestic Price of Gold |
| Expense Ratio | ~0.48% (for the Regular Plan) |
| Minimum Investment | Determined by the market price of 1 unit on the exchange |
| Asset Allocation | Predominantly in physical gold of 99.5% purity or higher |
DSP Gold ETF Direct – Growth is an investment option provided by DSP Mutual Fund that allows investors to gain exposure to gold prices through an exchange-traded fund. Here’s a detailed overview:
Fund Details
| Particulars | Details |
|---|---|
| Fund Name | DSP Gold ETF Direct – Growth |
| Fund Category | Exchange Traded Fund (ETF) |
| Fund Manager | Abhishek Ghosh |
| Launch Date | April 28, 2023 |
| Benchmark Index | Domestic Price of Gold |
| Expense Ratio | ~0.48% (for the Regular Plan) |
| Minimum Investment | Determined by the market price of 1 unit on the exchange |
| Asset Allocation | Predominantly in physical gold of 99.5% purity or higher |
Returns (As of Latest Data)
| Time Period | Returns |
|---|---|
| 1 Month | ~3.5% |
| 3 Months | ~6.2% |
| 6 Months | ~12.8% |
| 1 Year | ~21.49% |
| Since Inception | ~15.09% (Annualized) |
Key Features
(1) Underlying Asset
- The fund invests in physical gold, ensuring alignment with market prices.
(2) Liquidity
- Units can be traded on the stock exchange during trading hours.
(3) Cost-Efficient
- No storage or making charges, unlike physical gold.
(4) Tax Efficiency
- Gains are taxed as per capital gains rules (short-term and long-term) with indexation benefits for long-term holdings.
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