Gold savings Fund are open ended schemes which invest in Gold ETF fund of same AMC.
The scheme is suitable for investors who seek exposure to physical gold as an investment and an asset class to diversify their portfolio. It is also suitable to those who find the investments in Gold ETF's to be cumbersome for want of trading and demat account for investing on the exchanges.
It is also suitable to small investors who cannot invest in lot of creation unit size of a Gold ETF or those habituated to dealing with mutual funds directly.
How Gold ETF is Different from Gold Savings Fund
Where as in Gold Savings Fund
Fixed amount sip option is available.
Then which is considered best in terms of less charges:
If GOLD ETF charges are 1%, and if we invest in gold savings fund the charges will be ETF charges +fund charges, if fund charges are 0.50% so Gold savings fund charges will be (1.5%)
In Gold ETF: We pay Annual Maintenance for Demat account, Brokerage charges, Transaction and Delivery charges.
In Gold Savings we mainly pay Recurring charges.
So considering all charges , i feel both are at par, i don't find Gold ETF cheaper as when i did the calculation i actually paid more than 1.5% when investing in Gold ETF, plus no fixed amount we can consider in gold ETF.
If demat account is opened only for investing in gold ETF and i pay annual demat charges of Rs. 500 so monthly SIP charges will be Rs. 41.66 on Gold ETF fund
Plus 1 % on NAV on Purchase, after doing all calculation work i don't think Gold ETF is cheaper compare to Gold Savings Fund.