SGB worth buying?

Hello Investors -

I want to know is it worth investing in SGB rather than gold ETFs/MFs if we are not sure to hold SGB for at least 5 years?

In case of early exist via secondary market I think it’s very difficult to get fair value return because of liquidity issue. Even if ibja rate goes up on any given day, majority of SGB price goes down while ETFs and MFs rates mostly follow ibja rate. So, is it worth buying SGB?

That has not been my observation. The secondary market rates for SGB has remained close to IBJA while ETFs prices keep going down due to expenses. If you look at the most popular ETF GOLDBEES, you will see it is at 42.16 which was supposed to correspond to 1/100th of a gram of gold. It is no where near…


The difference in the price of actual gold and the gold ETF units is due to the cash component (this is updated on a daily basis by the gold ETF’s AMC) which needs to be paid by the investor in case they want to take delivery of gold ETF units (normally 1kg and above). When cash component is added to the Gold ETF’s unit price (like for example check Axis Gold ETF cash component), then it becomes equivalent to actual gold rates. But a downside of taking delivery of the gold ETF units is that 3% GST needs to be paid over and above the cash component part & 3% GST will again need to be paid if one tries to sell that gold to a jeweler on a later date (as mentioned in this article)

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Shouldn’t the cash component already part of the daily NAV calculation? Anyways, the price of ETF will move away (down) from the actual Gold price (ibja) on a daily basis due to expenses, while the same doesn’t happen in SGB…

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