I had written about the best way to invest in gold in India looking at the different ways of buying physical gold and gold etfs.There was also the option of investing in gold mutual fund which invest in gold mining companies as well as looking at whether to buy gold from banks or you were better off buying gold from your neighbourhood jeweller.Alll the options of buying gold have their advantages and disadvantages.Gold ETFs have become the fastest growing segment of buying gold in India with most people prefering teh convenience and ease of buying gold the demat way.Note only does it have the security and storage advantages,it is also easily saleable without a huge transaction costs.Its no wonder that most asset management companies in India have launched gold etf products to take advantage of the growing trend of buying gold Etfs in India.SBI and UTI,two of the oldest government owned mutual fund houses in the country too have started gold etfs besides the private companies.Benchmark Gold Bees remains the oldest gold etf in the country and is looking to gain marketshare after Goldman Sachs bougth the company.IDBI has joined the gold etf party becoming the latest AMC to start a gold ETF.There is little to distinguish these Gold ETFs from each other since they don’t have any active management and are mostly linked to the price of gold.The best gold etf is the one which has the least tracking error and the lowest expense ratio.I don’t have a favorable opinion of the mutual fund etfs in India since they charge very highly and there is lack of variety and liqudity in the Indian ETF market.

Goldman Sachs Liquid Exchange Traded Scheme (GS Liquid BeES) is an open ended liquid scheme & was previously known as Liquid Benchmark Exchange Traded Scheme (Liquid BeES). GS Liquid BeES is the first Liquid ETF (Exchange Traded Fund) in the world. It is a unique liquid fund that is listed and traded on the stock exchange just like a share.

The investment objective of GS Liquid BeES is to enhance returns and minimize price risk by investing in a basket of call money, short-term government securities and money market instruments of short maturities while maintaining safety and liquidity. It seeks to provide current income, commensurate with relatively low risk while providing a high level of liquidity, primarily through a portfolio of treasury bills, Government Securities, Call Money, Collateralised Lending & Borrowing Obligation (“CBLO”) /similar instruments, Repos and Reverse Repos, and other Money Market Instruments.

Mutual Fund Companies have seen a steady growth driven by the growing financial assets being generated by the fast growing Indian economy.But the Mutual Fund Industry like other sectors such as Real Estate and Telecom too has come under the spotlight for some illegal activity.While you can’t call the industry corrupt because of some fraudulent activities it does raise questions on the industry ethics.Top Mutual Funds in the country like HDFC and L&T have been fined by the stock market regulator SEBI for front running.For those who don’t understand what the term means,front running is an illegal activity whereby a fund manager or fund official makes personal gains by making trades on his account before doing a trade for the fund.This causes losses for the fund investor and is akin to stealing.However like other corrupt practices in the stock market industry,SEBI lets them go with small fines which don’t deter more such frauds.It is also not unknown that some fund managers connive with company promoters and market operators to rig and do circular trading.Not only is this a problem,another massive problem with the industry is its underperformance as compared to the benchmarks.While earlier mutual funds were known to outperform the benchmarks like the Nifty,a recent Crisil study has dispelled this myth.Given these disadvantages of mutual fund ,it is time to invest in Indian ETFs though not a lot of variety exists in the Indian stock market yet.

Reliance Gold ETF is an open-ended Gold Exchange Traded Fund. It started on 22nd November 2007. The investment objective is to seek to provide returns that closely correspond to returns provided by price of gold through investment in physical Gold and Gold related securities .The prices of Reliance God ETF is affected by several factors such as global gold supply and demand, investors’ expectations with respect to the rate of inflation, currency exchange rates, interest rates, etc. Minimum of one unit can be traded by the investors.The Creation Unit is 1000 units that is if you have 1 kg of gold ETF that is about Rs 26 lakhs you can exchange your paper gold into physical gold from the AMC.

Silver ETFs in India have started making their debt after the rip roaring success of gold etf funds in India.All the major mutual fund houses in India have launched gold ETFs as a large part of the investing population has made ETFs the preferrred vehicle for investing in Gold.Their are 12 gold ETFs in India which is far the largest sector ETF in India.In fact,ETFs in India are marked by their lack of depth and variety.There are only a handful of decent ETFs in India which have good volume and liquidity though more asset management companies are coming out with ETFs.Goldman Sachs recently bought Benchmark AMC which has the most successful gold ETF and the biggest Nifty ETF in India.India Infoline is also targeting ETFs to boost its AUM.

Life Insurance is one of the most widely available and used financial products being used by people.But before buying various types of life insurance such as variable,term life insurance not many people do a pros and cons analysis.This is quite sad since it is one of the biggest yearly expenses and is one of the most important security assets for our family in case of death or serious injury.Life Insurance has different meanings in different countries as well.In India Life Insurance is mostly looked upon as an investment product.Most people buy insurance as an investment product leading to the wide prevalence of hybrid insurance investment products like ULIPs ,Child Plans etc.It is easily found that these hybrid products are wasteful since it would be cheaper to buy separate investment and insurance products.The main reason for the misselling is the financial illiteracy and ignorance about the advantages and disadvantages of life insurance and its products.Life Insurance Companies also don’t do a very good job in educating people about the right type of product as it is more profitable for them to sell the products which are disadvantageous to the customers.So we have a case where Life Insurance products advantages and disadvantages are not known and understood by most people around the world.