Exchange Traded Fund (ETF's) in the financial markets

Abstract

Gold ETF has become the preferred choice of many big investors. The main reason being the low volatility which is a main area of concern in the case of stock markets. It also protects against the currency fluctuations. In the recent past we have witnessed the weakening of the rupee against dollar. During the recession when most of the share prices went south, Gold ETF was going North. The best part is that one need not invest a lot in the gold. Even by being a small portion of the portfolio will help mitigate the risk. The percentage can be as low as 5% of the entire portfolio. Even for a very small investor, the selection of Gold ETF has become very easy as all of them have similar returns and expense ratio is almost the same. The investor is also benefitted by lower taxes she has to pay. In spite of all the advantages investment in Gold ETF is very low because of lower awareness. But if the current market uncertainties remain, gold ETF will find more favour with the investors.