Gold ETF losing shine, probably not

The Mint carries an article on the response received by Gold ETF launched by Benchmark and UTI Mutual Fund. It mentions that consumers inspite of numerous benefits that gold ETF are still not comfortable with the idea of paper gold.

Not all investors share his enthusiasm on the yellow metal. This is because when Indians buy gold, they want gold, not paper. For Indians, used to actually stashing away gold and gold jewellery as a form of savings.

The article also mentions the negative returns of the two gold ETFs since their launch.

The first impression that a reader gets after reading an article is that gold ETF are not that rewarding for the investors and have failed to give returns. But it fails to mention that fall in gold prices are the prime reason for negative returns and it has nothing specific to do with gold in paper form.

It was only because of popularity and demand of paper gold, that Kotak MF has launched its own Gold ETF and Escorts is planning to launch its soon.