Advantages of GETFs ?

• No risk of holding physical stock: As GETFs are issued in demat form, the risk associated with holding physical gold is reduced considerably.
• Affordable: GETFs are ideal for small retain investors as they can buy a just one unit from the exchange. The minimum amount of investment during the NFO period for Cash is Rs 10,000 and in multiples of Rs 1,000 thereafter. One unit of the fund will represent one gram of gold.
• High Liquidity: GETFs can be easily bought / sold like any other stock on the exchange during market hours at real-time prices as opposed to end of day prices.
• Lower cost: GETFs enjoy the benefits of lower cost and higher transparency. As they are listed on the exchange, costs of distribution are much lower. Further, exchange traded mechanism helps reduce minimal collection, disbursement and other processing charges. Gold futures include the cost of carry that will be absent on a GETF.
• Low tracking error: Tracking Error of GETFs is likely to be low as compared to a normal fund. Due to the creation / redemption of units only through in-kind mechanism the fund can keep lesser funds in cash. Also, time lag between buying / selling units and the underlying physical gold is much lower.