Gone are the days when investing in gold meant buying and hoarding physical gold jewellery. Today, millennials are investing in gold in a range of different ways without the need to stockpile physical gold. Here’s a list of ways millennials are investing in gold:
Mutual funds
Mutual funds have gained immense popularity among millennials as an easy and diversified way of investing in the stock market. Apart from equities and fixed-income debt assets, MFs also invest in gold. In fact, millennials are investing in gold mutual funds to purchase funds that invest primarily in gold and gold-related assets. Generally, such funds invest in gold indirectly by buying stocks of mining companies, gold-producing and distributing companies or directly by investing in physical gold. Gold MFs are ideal for investors who are investing for a long-term horizon and are looking to add diversification to their portfolio.
Gold ETFs
Gold ETFs are exchange-traded funds that invest in gold bullion. The prices of gold ETFs depend on the price of physical gold. In other words, gold ETFs track the price of gold, just like other ETFs track the performance of a specific stock index. Gold ETFs are the millennial way of investing in gold because ETFs are traded conveniently on stock exchanges and involve nominal asset management charges. This means millennials need not worry about physically storing the gold or paying hefty making charges (applicable on jewellery).
Digital gold
Another popular millennial way of investing in gold is buying digital gold. Digital gold is gold that’s bought, sold, and stored electronically. Digital gold can be purchased through authorised platforms like e-commerce sites, payment platforms, and banks. The primary advantage of digital gold is the ability to buy in small quantities, starting from just Rs. 1 onwards. Additionally, investors can opt for SIP investments in digital gold, where they can purchase gold conveniently through monthly instalments. Adding to this list is the ease of exchanging digital gold for physical gold, coins, and bullion. All this makes digital gold a preferred millennial way of investing in gold.
Sovereign gold bonds (SGBs)
Millennials also prefer to invest in gold through SGBs issued by the RBI on behalf of the Indian government. SGBs are issued in tranches and offer a good alternative route to investing in the hedging asset. The price of an SGB is determined on the basis of the price of 99.9% pure gold. These investments come with a tenure of 8 years. However, investors can withdraw after the 5th year.
Physical gold
Apart from all the new-age ways of investing in gold, purchasing physical gold is still a popular option among a sizable millennial segment. Millennials who prefer looking at gold as an investment, as well as an adornment, tend to prefer investing in gold by purchasing physical ornaments. However, millennial investors who prioritise the long-term investment value of gold over its dual appeal prefer purchasing gold bars and coins as they avoid a decline in resale value and expenses on one-time making charges.
