The festival season is at the doors while we think of gifting to our dear ones on auspicious occasions like “Dhanteras” and “Diwali” for best of their future. Gifting an investment by securing their financial future may be the greatest gift that your loved one will cherish and remember over the years. An investment gift may be a life changing experience for the recipients and may help achieve their goals.
The Gen-Z investors generally prefer high-risk investments like crypto, NFTs and equities. Apart from traditional investment instruments, one may always look for to provide potential stable future returns and diversification over high-risk investments which may grow over the time to secure future.
Gifting on auspicious occasion is a special blessing to the loved ones and one may think of gifting something divine or pure. Hence, we generally see the gifts in form of Gold or Silver still in trend over the years. We may look for such investment gifts suitable for “Dhanteras” and “Diwali” one may gift to their Gen-Z in the family.
Gold has a proven track record over the years as a hedge against market uncertainty, currency devaluation and inflation. Gold as a part of the portfolio is a great asset diversification over high-risk investments which may provide constant stability over the years. Many investment instruments are now available for holding gold in demat form rather physical form.
Investment gift through Mutual Fund: Gold and Silver in the form of ETFs provides asset diversification which combines the flexibility of stock investment and the simplicity of gold investments. Gold and Silver Exchange Traded Funds are units representing physical gold and silver which may be in paper or dematerialised form. Gold and Silver ETFs trade on the cash segment of BSE & NSE, like any other company stock, and may be bought and sold continuously at market prices.
The various asset management companies (AMCs) are now offering an opportunity to invest in gold through hybrid multi asset schemes. Many schemes follow a fund of fund structure and primarily invest in Gold ETFs while few offers investment through ETCD adopting beyond gold approach with diversification in other commodities along with gold.
Sovereign Gold Bonds As A Gift: SGB are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India. The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment.
Digital Gold: Digital Gold is a mode of buying and selling gold digitally, without having to store it physically. The return on this investment is determined by the market price of physical gold, and digital gold is 100% pure, stored safely, and insured.
Disclaimer: The views expressed in this article are personal in nature and in is no way trying to predict the markets or to time them. The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management Pvt. Ltd. will not be liable in any manner for the consequences of such action taken by you. Consult your Mutual Fund Distributor before investing. The views expressed in this article may not reflect in the scheme portfolios of Tata Mutual Fund. The view expressed are based on the current market scenario and the same is subject to change. There are no guaranteed or assured returns under any of the scheme of Tata mutual Fund.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
-The author is fund manager – commodities, Tata Asset Management. Views expressed are personal.