Sovereign Gold Bonds
sovereign gold bond scheme is probably the best form of gold to have in your portfolio,as you get an intrest rate of 2.75%. However, liquidity is not good .Besides,you also have to pay a brokerage of 0.5% if you buy the bonds from the secondary market.
Gold ETF's
Gold ETF's(Exchange-traded fund) are fairly liquid and hence suit investors who want to hold it for the short to medium term.However, be prepared for lower returns because of a 1% expense ratio.Besides, you have to bear a 0.5% brokerage while buying or selling.
Gold Funds
Being open-ended funds,there is no issue with liquidity.However, Gold funds invest in gold ETF's and, therefore, the expense ratio is 1.5%,higher than that of gold ETF's.
Gold Bullion
If you want gold in the physical form, this is the vehicle to choose.However, jewellers charge a small 2% commission while buying or selling them.
Gold Jewellery
Making and liquidation charges can be as low as 10% and 5% respectively,if you opt for plain jewellery.Making charges for intricate jewellery can be 20% and liquidation charges 10%.
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