What is gold Bees ETF and How to invest in it?

Gold Benchmark Exchange Traded Schemes, popularly known as Gold BeEs, are an investment option in the form of exchange traded funds (ETFs) replicating the price movement of physical gold.  

This ETF allows you to invest in Gold without physically owning it and like every other ETF, you trade its units on the stock exchanges such as the BSE and NSE. Gold BeEs is managed by Nippon India Mutual Fund and the value of its each unit equals to 0.01 gram of digital gold backed by physical gold bullions with 99.5% purity.  

It is the modern form of investing in gold where you get the benefits of investing in it without even owning it. You can invest in Gold BeEs on NSE and BSE at market price in their cash segment.  There are multiple ways of investing in Gold BeEs and SIP is one of them. However, you should also be aware of the disadvantages of SIP before taking this route. 

 

 

How Gold BeEs really work? 

Gold BeEs track and reflect the actual price movement of physical gold in the market. To start a Gold BeEs ETF, a fund manager first buys actual gold from the market in the form of gold bars and coins (bullions). The physical gold is the asset of the ETF and represents the total value of the ETF. 

Now, the Gold BeEs are traded in the exchanges in the form of units. These units represent a specific quantity of the physical gold which is usually 0.01 grams of the total asset. The price of the units of the Gold BeEs keeps fluctuating with the price of physical gold in the market. As the Gold price varies, the unit risk of Gold BeEs also varies. 

The market price of the units of Gold BeEs ETF is equal to the price of a specific quantity (0.01 grams) of the total gold asset minus management and trading costs. This is how Gold BeES facilitates you to invest in gold transparently and efficiently without even owning it physically. 

 

 

List of other investment similar to Gold BeEs  

Gold ETFs such as Gold BeEs are gaining rapid popularity among investors especially in volatile times. Apart from Gold BeEs, there are other options also in the market which are also quite popular such as: 

• SBI ETF Gold 
• HDFC Gold ETF 
• Kotak Gold ETF 
• Axis Gold ETF 
• ICICI Prudential Gold ETF 
• UTI Gold ETF 

 

 

Process of investing in Gold beEs 

The process of investing in Gold ETFs is simple to understand and easy to follow. To buy a Gold ETF, you need to follow these steps: 

1) Pick a stockbroker: The first step of investing in Gold BeEs is picking the right broker and visiting their website or app. 

2) Open both Demat and Trading Account: The next step is the opening of the demat and trading account which requires to do some documentation for information and security purposes. Another important step here is to link you bank account to your trading account. 

3) Invest in Gold BeEs: Now the next step is the selection of Gold BeEs or any other Gold ETFs you like and purchase the desired quantity of its units at market price. 

4) Confirm Transaction: Once your order is placed, next step is to confirm the transaction by checking your phone and email for confirmation notification. Note, at this step a small fee will be deducted by the broker as brokerage.  

 

 

How are Gold BeEs taxed? 

Gold BeEs as such don’t have any special tax rates. They are taxed based on the time period for which you hold the units. If an investor sells his profits prior to 12 months of buying, then it will be considered as short-term capital gains, and he will be taxed according to his income tax slab rate. 

On the other hand, if the investor holds the units for more than 12 months then he will be taxed for long term capital gains which is 12.5% without any indexation benefits. 

 

 

Benefits of investing in Gold BeEs 

 

1). Acts as a hedging tool 

Gold has the tendency to retain its value even during volatile times which makes Gold BeEs a popular hedging investment especially in turbulent times. Also, it's seen with gold that when equity decline, gold’s prices go up which is why investors use them as to balance their portfolio during bearish runs which fortifies the value of Gold BeEs as a popular investment alternative and helps in hedging in stock market. 

 

2). Highly liquid investment alternative 

Gold BeEs are highly liquid investment because they are: 

• Traded on the stock exchanges such as NSE and BSE making it convenient for investors to trade in them easily at prevalent market prices. 
• Traded in high volumes which ensures that there is significant demand of these ETFs making it relatively easier for investors to enter and exit positions without drastic price fluctuations. 
• No lock-in periods in Gold BeEs unlike Gold mutual funds or SGBs which makes it easier for investors to sell them whenever they want. 
• Immediate settled (within T+1 or T+2 days) whenever investor wants to sell them resulting in quick access to funds once order is executed. 

 

3). Economical Investment Alternative 

Gold BeEs prove out to be more economical and convenient investment alternative than physical gold because there are: 

• No significant additional charges associated with it such as making charges (8%-20%) or wastage which is there with physical gold while crafting. 
• Lower transaction costs in Gold BeEs as compared to physical gold where there are other charges such as dealer margins, price spreads, and storage costs.    
• No storage or security costs in Gold BeEs 

 

4). High degree of security 

Gold BeEs are more secure and flexible investment options as your units are stored in your demat and the transactions falls under stock exchange regulatory framework. You do not need to worry about the security and maintenance of the gold reserves as it the duty of the AMCs. 

 

5). Flexible purchasing terms 

For investing in Gold ETFs like Gold BeEs, your minimum investment requirements are not high unlike physical gold. You can invest in Gold BeEs by purchasing even a single unit and incrementally increase your investment according to your financial condition and market dynamics. 

 

 

Conclusion 

Finally, gold is a good investment option for your portfolio. Gold BeES offer a convenient and instant online way to invest in gold without the hassle of buying and holding physical gold.  

You can easily buy Gold BeES from reputable fund providers through your current trading account on the live price of gold. These investments are invested in better physical gold and are overseen by SEBI.