Should I buy digital gold on apps or stick to Gold ETFs for my 10% portfolio allocation?

Gold ETFs are currently the most efficient and cost-effective route for your 10% allocation, especially with SGBs halted. Digital gold is generally not recommended for serious portfolio building. It lacks proper SEBI or RBI regulation, attracts immediate GST implications, and suffers from wide buy and sell spreads that eat into your returns.

Gold ETFs trade on the exchange and have very low expense ratios, usually around 0.3%. They also offer high liquidity, allowing you to enter and exit at transparent market prices. If you do not have a Demat account, your next best alternative is a Gold Mutual Fund, which operates as a Fund of Funds.

However, you need to be aware of the fee structure with these mutual funds. You will end up paying the expense ratio of the mutual fund itself plus the expense ratio of the underlying ETF it invests in. This double-fee layer makes ETFs the superior choice if you already have a brokerage account.

Historically, gold is a fantastic inflation hedge; the amount of gold required to buy a house 20 years ago is roughly the same amount required today. Pairing a 10% allocation to gold with a 2% allocation to silver via Silver ETFs will effectively hedge your portfolio against inflation and currency depreciation.

Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.