The idea of a gold exchange-traded fund was first conceptualized by Benchmark Asset Management Company Private Ltd in India
The first gold ETF actually launched was Gold Bullion Securities, which listed 28 March 2003 on the Australian Stock Exchange. Graham Tuckwell, the founder and major shareholder of ETF Securities, was behind the launch of this fund.
Gold ETF fund will purchase a huge amount of gold, maintaining the physical metal in storage. They will then issue shares in baskets, the idea here being that the value of the shares will increase with the price of gold bullion. If the price of gold goes up by 10%, then individual shares would increase in value by the same 10%.
Buying / Selling GOLD ETFs is as simple as buying / selling any other stock on the exchange.As these are listed on the Exchange, distribution and other operational expenses are significantly lower, making it cost effective.They also have lower tracking error due to in-kind creation and redemption.
The tax structure for gold ETFs is similar to that of debt funds. If you hold gold ETFs for more than a year, you pay a long-term capital gains tax of 10 per cent without indexation or 20 per cent with indexation, whichever is lower, on the profits made. Less than a year attract short-term capital gains tax. The profits are added to annual income and taxed according to the income bracket. Gold ETFs do not attract wealth tax.
The first gold ETF actually launched was Gold Bullion Securities, which listed 28 March 2003 on the Australian Stock Exchange. Graham Tuckwell, the founder and major shareholder of ETF Securities, was behind the launch of this fund.
Gold ETF fund will purchase a huge amount of gold, maintaining the physical metal in storage. They will then issue shares in baskets, the idea here being that the value of the shares will increase with the price of gold bullion. If the price of gold goes up by 10%, then individual shares would increase in value by the same 10%.
Buying / Selling GOLD ETFs is as simple as buying / selling any other stock on the exchange.As these are listed on the Exchange, distribution and other operational expenses are significantly lower, making it cost effective.They also have lower tracking error due to in-kind creation and redemption.
The tax structure for gold ETFs is similar to that of debt funds. If you hold gold ETFs for more than a year, you pay a long-term capital gains tax of 10 per cent without indexation or 20 per cent with indexation, whichever is lower, on the profits made. Less than a year attract short-term capital gains tax. The profits are added to annual income and taxed according to the income bracket. Gold ETFs do not attract wealth tax.
