GoldBeES vs. Stocks: Why Is It Easier to Track?

Investing in the stock market can feel overwhelming—analyzing financial reports, tracking price fluctuations, and staying updated with company performance. But what if there was an easier way to invest without worrying about corporate earnings, management decisions, or market volatility?

That’s where GoldBeES, India’s first gold-backed Exchange Traded Fund (ETF), comes in. This investment option lets you invest in gold digitally, without the hassle of buying and storing physical gold.

But why is GoldBeES simpler to track than individual stocks? Let's explore.

What is GoldBeES?

GoldBeES (Gold Benchmark Exchange Traded Scheme) is an ETF that tracks the price of physical gold. Instead of dealing with jewelry, coins, or bars, you can invest in digital gold through the NSE (National Stock Exchange) or BSE (Bombay Stock Exchange).

Each unit of GoldBeES represents approximately 1 gram of gold, and its price moves directly in line with international gold rates.

📌 Why Was GoldBeES Introduced?

Gold has always been a popular investment in India. However, traditional methods of buying gold come with:

 ❌Storage and security risks

❌ Making charges and wastage fees

❌ High taxation (3% GST on physical gold)

GoldBeES was launched to offer a cost-effective, transparent, and easily tradable alternative to investing in gold.

📊Why Is GoldBeES Easier to Track Than Stocks?

1.Gold Prices Are More Predictable:

Unlike stocks, which are influenced by company profits, management decisions, and economic policies, GoldBeES only follows gold prices—which are easier to monitor globally.

2. No Need for Stock Market Research:

Investing in stocks requires:

✔ Analyzing financial statements

✔ Tracking industry trends

✔ Following corporate news

With GoldBeES, you skip all of this and simply track gold prices.

3.Less Market Volatility:

Stock prices fluctuate daily due to market sentiment, quarterly earnings, and economic trends. In contrast, gold is a stable asset, especially during economic downturns.

4. No Risk of Company Bankruptcy:

Stocks are linked to companies that can fail, while gold has always retained value over centuries. Investing in GoldBeES eliminates corporate risks.

⚠️Risks & Downsides of GoldBeES:

While GoldBeES is a great investment option, there are some potential downsides:

1.No Dividend or Interest Income:

Unlike stocks that pay dividends or bonds that offer interest, GoldBeES only provides returns if gold prices rise.

2.Gold Price Fluctuations:

Gold prices are influenced by global economic trends, inflation, and currency exchange rates. A decline in gold prices can reduce GoldBeES value.

3. Limited Growth Potential:

Stocks grow as companies expand, innovate, and increase profits. Gold, on the other hand, is a wealth-preservation asset, not a high-growth investment.

4. Currency Fluctuation Risk:

Since gold is priced in US dollars, a stronger Indian Rupee (INR) can negatively impact GoldBeES returns.

5.Expense Ratio:

Gold ETFs have a small management fee (~0.5% annually), which slightly reduces returns over time.

6.Bid-Ask Spread Issue:

GoldBeES is an ETF, meaning it is traded on the stock exchange like shares. However, due to lower trading volumes compared to stocks, the bid-ask spread (the difference between buying and selling prices) can be wider. This means:

📉 You may buy GoldBeES at a higher price and sell at a lower price

📉 The spread reduces overall returns, especially for short-term traders

✅Benefits of Investing in GoldBeES:

 1. No GST or Making Charges:

Physical gold attracts 3% GST + 8-25% making charges for jewelry. GoldBeES has no GST, making it a cheaper investment option.

 2. No Storage or Security Issues:

Storing physical gold requires lockers or home safes. GoldBeES is digital, removing theft and storage concerns.

 3. High Liquidity:

GoldBeES is easily tradable on stock exchanges, unlike physical gold, which requires purity checks and finding buyers.

 4. No Risk of Theft or Damage:

Physical gold can be stolen or damaged over time. GoldBeES is stored in your demat account securely.

 5. No Minimum Investment:

Buying gold jewelry requires a minimum purchase, but GoldBeES allows fractional investments, making it affordable for small investors.

6. Transparent Pricing:

GoldBeES prices are directly linked to global gold rates, unlike physical gold, which varies by city and jeweler.

 7. Diversification & Inflation Hedge:

Gold acts as a safe-haven asset during inflation and economic crises. GoldBeES helps balance your investment portfolio.

📢Final Verdict: Should You Invest in GoldBeES?

GoldBeES is a great investment tool if you want:

✅ A safe and stable investment

✅ To hedge against inflation

✅ To invest in gold without storage risks

However, if you are looking for:

❌ High-growth investments – Stocks may be a better option.

❌ Regular income – Bonds or dividend stocks might be preferable.

💡 : GoldBeES works best as part of a diversified portfolio, rather than your only investment. It protects wealth but doesn’t generate rapid growth like stocks.

🚀Start Investing in GoldBeES Today!

Want to invest in GoldBeES? Follow these steps:

1. Open a demat and trading account with a stockbroker.

2.Search for GoldBeES on NSE/BSE.

3.Buy as many units as you want—even a small amount!

4.Track gold prices and sell when the value increases.

5.Be aware and make informed decisions.

💬What’s Your Take on GoldBeES?

Have you invested in GoldBeES before? Do you prefer gold or stocks for long-term investing? Let us know in the comments below! 👇