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New Delhi, The government has exempted units of <keyword id="2412922" type="General" weightage="20" keywordseo="investment-trusts" source="Orion">investment trusts</keyword> and <keyword id="46594" type="General" weightage="20" keywordseo="etfs" source="Orion">ETFs</keyword> issued by entities based in <keyword id="6424024" type="General" weightage="20" keywordseo="gift-city" source="Orion">GIFT City</keyword> or traded in exchanges there from capital gains tax. The Central Board of Direct Taxes (CBDT) notified the exemption from capital gains tax any unit of investment trust; a unit of a scheme; and a unit of an Exchange Traded Fund (ETF) launched under the <keyword id="9155869" type="General" weightage="50" keywordseo="international-financial-services-centres-authority" source="Orion">International Financial Services Centres Authority</keyword> (Fund Management) Regulations, 2022. Gujarat International Finance Tec-City (GIFT)-IFSC is being promoted as a tax-neutral enclave for the financial sector. Nangia Andersen LLP Partner-Financial Services Sunil Gidwani said currently, the law provides for exemption from capital gains tax on various securities either trading on the stock exchanges in GIFT city or securities issued by entities set up in GIFT city. "The new fund regime provides for funds to be set up as investment trusts, and hence, the law required the inclusion of units issued by such trusts for the purpose of exemption from capital gains. "Similarly ETF listed and trading on the stock exchanges in GIFT city would now qualify for capital gains tax exemption. These changes would further expand the scope of incentives available for funds and stock market trading in IFSC," Gidwani added AKM Global Tax Partner Amit Maheshwari said the notification is in line with the objective of making the International Financial Services Centre (IFSC) a hub for financial services in the world and incentivising non-resident investors on a recognised stock exchange. "It is important to note that to take advantage of this exemption, the consideration for such a transaction should be paid or payable in foreign currency. The securities, which are added through the new notification, include (i) a unit of <keyword id="2948615" type="General" weightage="50" keywordseo="investment-trust" source="Orion">Investment Trust</keyword>, (ii) a unit of a Scheme, and (iii) a unit of an exchange-traded fund. "These relaxations are a welcome move by the government and will make it globally more competitive for the non-resident investors," Maheshwari added.

Govt exempts investment trusts, ETFs from capital gains tax in GIFT City

<ul class="summary-list"><li>A <keyword id="10981755" type="UNKNOWN" weightage="60" keywordseo="unit-investment-trust">unit investment trust</keyword> (<keyword id="292912" type="ORGANIZATION" weightage="60" keywordseo="UIT">UIT</keyword>) is a type of investment fund that offers a fixed portfolio of stocks, bonds, and other assets for a set period of time. </li><li>UIT portfolios are typically fixed and not actively managed or traded.</li><li>UITs are particularly popular as diversification tools for hands-off investors and the retirement community, where stability is prized.</li></ul>If you've avoided mutual funds because of high management fees or how frequently they can be traded, you might benefit from a closer look at the unit investment trust, or UIT. Like mutual funds, UITs pool investor funds to purchase a series of assets, which are then bundled and offered up as a single unit - making them great for portfolio diversification.Unlike mutual funds, UITs are designed to be bought and held until a specific maturity date, with extremely limited trading in the meantime. Because of this, the funds tend to be particularly popular with <a href="https://www.businessinsider.com/personal-finance/what-is-buy-and-hold-investing-strategy" target="_blank" rel="noopener">buy-and-hold investors</a> where stability is more highly valued. As of December 2020, the <a href="https://www.ici.org/research/stats/uit/uits_02_21" target="_blank" rel="noopener">Investment Company Institute</a> (ICI) reported that there were 4,310 outstanding UITs, representing $77.85 billion invested, so a booming industry awaits the interested investor.<h2>What is a UIT?</h2>A UIT is one of three basic types of <a href="https://www.investor.gov/introduction-investing/investing-basics/glossary/investment-company" target="_blank" rel="noopener">investment companies</a>. The other two types of investment companies are open-end funds and closed-end funds, which we'll cover later. UITs offer investors a fixed portfolio that can include stocks, bonds, or other securities in the form of redeemable units. They're public investments that are bought and sold directly through the company issuing them, or through a broker working as an intermediary. Investors can redeem UITs after a set period of time passed, known as the maturity date.<h2>How does a UIT work?</h2>The goal of a UIT is that the passively held assets it contains will provide capital appreciation or <a href="https://www.businessinsider.com/what-is-a-dividend" target="_blank" rel="noopener">dividend income</a> throughout the life of the trust. And while that outcome isn't guaranteed, UITs are regulated through the Securities and Exchange Commission (SEC), so concerned investors can breathe easier. Every UIT must register through the commission, which then enforces requirements about everything from where the fund can invest to under what circumstances trades can be made.The average UIT is typically made up of mostly stocks and bonds, but can also contain assets like mortgages, <a href="https://www.businessinsider.com/what-is-a-reit" target="_blank" rel="noopener">real estate investment trusts</a> (REITs), <a href="https://www.businessinsider.com/master-limited-partnership-mlp" target="_blank" rel="noopener">master limited partnerships</a> (MLPs), hybrid instruments like <a href="https://www.businessinsider.com/what-is-preferred-stock" target="_blank" rel="noopener">preferred shares</a>, and beyond. These assets are often fixed around a broad theme, like American stocks offering historically high dividends, or <a href="https://www.businessinsider.com/what-is-a-corporate-bond" target="_blank" rel="noopener">corporate bonds</a> from companies in a specific sector.Money managers select assets for inclusion at the creation of the trust, aiming for securities they think will offer the most capital appreciation over time. They also set the maturity date for the fund, which can be anywhere between 15 months and 30 years. After that, the fund remains largely undisturbed until its maturity date.A prosperous UIT will earn its investors income in two different ways: in the form of quarterly or monthly dividends throughout the life of a fund, and as capital appreciation when the fund matures. Once your UIT expires, you have the option of taking delivery of the underlying assets into your own brokerage account, reupping into a similar or identical trust, or liquidating your holdings, which would give you the current cash value.<h2>UITs vs. mutual funds </h2>Mutual funds and UITs are similar in that they're pooled funds overseen by a professional money manager, and are subject to SEC regulation. Here's how the two assets diverge:<ul><li>Mutual funds are actively managed and UITs are not: The ability to buy and sell assets within a mutual fund increases the potential for <a href="https://www.businessinsider.com/what-are-capital-gains" target="_blank" rel="noopener">capital gains</a> - and, of course, losses. Since UITs don't actively trade, fees are lower, and as fixed income investments, their underlying securities do not change except in rare cases like bankruptcy or merger.</li></ul><ul><li>Mutual funds and UITs structure dividends differently: While mutual funds are designed to reinvest your dividends, UIT investors can miss out during market upswings, as the latter doesn't allow for the purchase of additional shares.</li></ul><ul><li>UITs have a maturity date, while mutual funds do not: Much like bonds or <a href="https://www.businessinsider.com/personal-finance/what-is-a-cd-certificate-of-deposit" target="_blank" rel="noopener">CDs</a>, UITs have defined lifespans and set metrics to hit before their expiration. This makes UITs, by their nature, a more long-term investment than mutual funds.</li><li>Mutual funds and UITs offer different ways to invest: If you have the cash to invest in a mutual fund, you can purchase shares on demand, as their quantity is limitless. But since UITs have a set limit or shares released upon its initial public offering (<a href="https://www.businessinsider.com/what-is-ipo">IPO</a>), you have to invest within that window or be subject to the whims of the secondary market.</li></ul>Each investment type has its own limits. But by and large, the reason you'd see a portfolio organized as a UIT instead of a mutual fund is to minimize both short-term and long-term expenses. UITs come with much lower expense ratios and also come with favorable tax terms. Because of the way <a href="https://www.irs.gov/taxtopics/tc409" target="_blank" rel="noopener">capital gains taxes are structured</a>, it's possible to lose money on a mutual fund and pay taxes on gains you never actually appreciated. For example, if the shares were sold right before you got your hands on them, you could find yourself with a shared tax liability for someone else's capital gains.But that won't happen with a UIT. Because the securities are bundled when you place the order and not before, the original value - or cost basis, as it's termed - is specific to you and can't burn you down the road.<h2>Who should buy UITs?</h2>UITs have benefits to offer every investor, but they're particularly compelling for those who aren't interested in building a portfolio security by security, or who don't want to pay the high expense ratios on <a href="https://www.businessinsider.com/personal-finance/how-to-invest-in-mutual-funds-step-by-step-guide" target="_blank" rel="noopener">actively managed mutual funds</a>. Plus, the lower buy-ins on UITs make them more accessible for newer investors or those with less capital.UITs are also quite popular with those at or close to retirement age because they tend to be more stable investment vehicles. While UITs might not have the growth potential of a different asset class, their buy-and-hold strategy is lighter on risk as well. From the very start, you'll know exactly where you're invested, how long that investment will last, and roughly how much income you can expect from your investment, all without having to wait to pore over a prospectus. If you're looking to join the ranks of UIT investors, these funds can be purchased directly from the issuer, or bought and sold on the stock exchange. Talk to your financial adviser about which UIT might be a match for you and your situation.<h2>The financial takeaway</h2>As an investment, UITs are a different option from mutual funds or closed-end funds that offer a winning combination of low costs, reliability, tax protection, and fairly predictable gains. There are certain pitfalls, of course, like a lack of flexibility and a potential cap on earnings, since dividends can't be reinvested. But if you're nearing retirement or simply trying to stretch a dollar, UITs can prove to be a plum choice for the (semi) conservative investor looking to diversify their portfolio.<a data-type="5dee79d5fd9db265fd2bf528">How to invest in mutual funds and grow your money for retirement, a bucket-list trip, or any other long-term goal</a><a data-type="5fa1a11d19bb5e18580dbc66">Dividends are payments made by a company to its shareholders - here's how they work</a><a data-type="5f886ff851467218126c05d1">Passive investing is a long-term wealth-building strategy all investors should know - here's how it works</a><a data-type="5f52714cce3d6947b55a3bf1">REITs are a way to own real estate without becoming a landlord - here's how they work and ways to invest</a>

What is a unit investment trust? An easy way to build diversification while earning steady income

New Delhi, Country's largest power producer NTPC proposes to forge a <keyword id="6373972" type="UNKNOWN" weightage="20" keywordseo="Joint-venture">joint venture</keyword> with government's strategic investment fund NIIF to set up an <keyword id="2584560" type="PERSON" weightage="20" keywordseo="Infrastructure-Investment-Trust">infrastructure investment trust</keyword> (InvIT). The proposed InvIT will help NTPC to monetise some of its <keyword id="10461945" type="UNKNOWN" weightage="20" keywordseo="operational-renewable-energy-projects">operational renewable energy projects</keyword>. Funds raised from such exercise would be used by the power producer to invest in <keyword id="10461946" type="UNKNOWN" weightage="20" keywordseo="additional-renewable-capacity">additional renewable capacity</keyword>. As per initial plan, NTPC would put the entire 1 GW of operational renewable assets and the 2 GW of RE projects in the pipeline under the trust. This will help to raise capital for expansion of renewable capacity. The power producer is also looking to expand the scope of its partnership with NIIF to foray in the power distribution business where it is bidding for privatisation of Union Territory discoms. NTPC plans to generate 25% of its power capacity from renewable sources by 2030, which will be equivalent of 32 GW of power capacity and require an investment of ₹1.60 lakh crore. InvIT route would be ideal to unlock the value of existing assets for making future investments in green projects. With a total installed capacity of 62,110 MW, <keyword id="347182" type="COMPANY" weightage="20" keywordseo="NTPC-Group">NTPC Group</keyword> has 70 power stations comprising 24 coal-based units, seven combined cycle gas/liquid fuel stations, one hydro, 13 renewables, along with 25 subsidiary and joint venture entities. SEE ALSO: <a href="https://www.businessinsider.in/business/news/ikea-india-cfo-says-she-still-has-3500-crore-to-be-spent-in-india-the-pandemic-has-changed-targets-but-not-the-investment-plan/articleshow/79790938.cms">INTERVIEW: Ikea CFO says she still has ₹3,500 crore to be spent in India⁠— the pandemic has changed targets but not the investment plan</a> <a href="https://www.businessinsider.in/science/health/news/india-will-produce-300-million-doses-of-the-russian-sputnik-v-covid-19-vaccine-next-year/articleshow/79795341.cms">India will produce 300 million doses of the Russian Sputnik V COVID-19 vaccine next year</a> <a href="https://www.businessinsider.in/stock-market/news/how-to-check-mrs-bectors-food-specialities-ipo-allotment-status-online/articleshow/79808672.cms">Mrs Bectors Food Specialities IPO allotment: Here’s how to check share allotment status</a>

NTPC looks at KV with NIIF for renewable infrastructure investment trust

Real Estate Investment Trusts (REITs)

Capital markets regulator <keyword id="35210" type="General" weightage="100" keywordseo="sebi" source="Orion">Sebi</keyword> on Thursday extended the timeline till March 15, for submission of public comments on a proposal pertaining to higher responsibility for sponsors of investment vehicles - <keyword id="11931834" type="General" weightage="20" keywordseo="reits" source="Orion">REITs</keyword> and InvITs. The regulator had put in place a consultation paper on holding of sponsors in <keyword id="162545" type="General" weightage="80" keywordseo="real-estate-investment-trust" source="Orion">Real Estate Investment Trust</keyword> (REITs) and <keyword id="2584560" type="General" weightage="80" keywordseo="infrastructure-investment-trust" source="Orion">Infrastructure Investment Trust</keyword> (InvITs) on February 23 and sought public comments on the same by March 8. "It has been decided to extend the timeline for submission of comments to March 15, 2023," the <keyword id="6355630" type="General" weightage="80" keywordseo="securities-and-exchange-board-of-india" source="Orion">Securities and Exchange Board of India</keyword> (Sebi) said in a public notice. In its consultation paper, the regulator proposed changes to rules governing REITs and InvITs whereby sponsors will be required to own a certain percentage of units in these investment vehicles. The changes were proposed keeping in mind the interest of unit holders and the structural vulnerabilities associated with the absence of a sponsor for REITs and InvITs. The watchdog suggested that the sponsors of REITs/InvITs should hold 15 per cent of the capital for a period of three years from the date of listing as there is no mandatory unit holding requirement after three years. It was also proposed to mandate sponsors to hold 5 per cent of the unit capital after 3-5 years, 3 per cent from 5-10 years, 2 per cent from 10-20 years and 1 per cent after 20 years. As per Sebi, the REIT/InvIT industry is in a nascent stage and continuously evolving, there is a need to have at least one sponsor throughout the life of the investment managers. REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in global markets. While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure assets, such as highways and power transmission assets. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/indias-gross-savings-and-investments-edge-higher-in-fy22-despite-inflation-says-sbi-research-report/articleshow/98444014.cms">India’s gross savings and investments edge higher in FY22 despite inflation, says SBI Research report</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/nclt-approves-suraksha-groups-bid-for-jaypee-infratech/articleshow/98476892.cms">NCLT approves Suraksha group's bid for Jaypee Infratech</a>

SEBI extends deadline till Mar 15 to submit public comments on proposal on REITs, InvITs sponsors

Mumbai, <keyword id="21027898" type="General" weightage="20" keywordseo="indian-real-estate-investment-trust" source="keywords">Indian Real Estate Investment Trust</keyword> (REIT) industry on Wednesday pitched for the entities to get access to direct bank lending and classification as equities. At present, such vehicles can issue bonds or borrow from non-bank lenders or mutual funds, but are prohibited to borrow from banks, said the <keyword id="21027897" type="General" weightage="20" keywordseo="indian-reits-association" source="keywords">Indian REITs Association</keyword> (IRA), a newly formed umbrella body for the five-year-old sector, which comprises four listed entities. The body's Chairman and Embassy REIT's Chief Executive <keyword id="21027895" type="General" weightage="20" keywordseo="arvind-maiya" source="keywords">Arvind Maiya</keyword> told reporters it is in touch with the RBI (<keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword>) for allowing banks to lend to such vehicles. The real estate industry is asset-heavy and needs funds regularly to buy assets for which it should be allowed to borrow directly from banks, he added. Typically, banks have access to deposits which brings down the cost of funds, and hence, the cost of borrowing can become softer for a borrowing entity. <keyword id="21027894" type="General" weightage="20" keywordseo="alok-aggarwal" source="keywords">Alok Aggarwal</keyword>, the Managing Director and Chief Executive of Brookfield India Real Estate Trust, said, at present REITs are classified as a "hybrid" instrument which creates confusion in the minds of the investors. <keyword id="21027896" type="General" weightage="20" keywordseo="maiya" source="keywords">Maiya</keyword> said classification as equities will lead to passive money coming into REITs as the instrument gets included in indices. Other geographies like Singapore, which has inspired the Indian REIT regulations, as well as the US, treat the instrument as equity, he said, stressing that all the features of the instrument are similar to equity. An industry participant said the tax advantages which it gets courtesy of the hybrid status will continue even if it is classified as equity, while another hoped that it can also get gains from a taxation front courtesy of the Long Term Capital Gains (LTCG) which is applicable for equity. The IRA said there are lots of opportunities for the REITs sector to grow in the country, both from a supply side, where the demand for real estate is bound to keep growing and also on the demand for such instruments as Indians look for newer asset classes. <keyword id="20375329" type="General" weightage="20" keywordseo="ramesh-nair" source="keywords">Ramesh Nair</keyword>, the Chief Executive of Mindspace REIT, said the <keyword id="20069427" type="General" weightage="20" keywordseo="global-capability-centres" source="keywords">Global Capability Centres</keyword> (GCCs) of multinationals alone present a very handsome opportunity for the REITS story in the country. Citing the experience in the US, industry executives said there will be dedicated REITs for specific aspects like warehousing and residential properties. When asked about the lack of demand in the residential space till now -- three Indian REITs are in commercial space while the fourth is in retail -- an industry executive said the yields are very low at 2-3 per cent which prevents REITs' play. Nair said the sector wants to reach out to mutual funds' lobby grouping Amfi to learn and partner with them, given that the REIT's current priority is also to create awareness among the investors.

Real estate investment trust pitch for direct bank lending, classification as equity

Mumbai, <keyword id="6375349" type="DOMAIN" weightage="20" keywordseo="Reliance-Infrastructure">Reliance Infrastructure</keyword> Limited (RInfra) on Saturday announced the successful completion of sale of its entire 74% equity stake in Parbati Koldam Transmission Company Limited (PKTCL) to India Grid Trust (IndiGrid) for an enterprise value of ₹900 crore. RInfra owns 74% in PKTCL located in the state of Himachal Pradesh and Punjab in joint venture with the <keyword id="176911" type="COMPANY" weightage="20" keywordseo="Power-Grid-Corporation-of-India-Limited">Power Grid Corporation of India Limited</keyword> (PGCIL). The deal was announced in November 2020 with the signing of a definitive binding agreement between RInfra and IndiGrid and has now been completed with transfer of shares of PKTCL, and receipt of sale consideration. IndiGrid (BSE: 540565, NSE: INDIGRID) is India's first power sector <keyword id="2584560" type="COMPANY" weightage="20" keywordseo="Infrastructure-Investment-Trust">Infrastructure Investment Trust</keyword>, owning AAA rated <keyword id="10568144" type="UNKNOWN" weightage="20" keywordseo="power-transmission-assets">power transmission assets</keyword> in India. With this acquisition, IndiGrid owns 12 operating power transmission assets with a total AUM of over ₹14,500 crore. The total transaction value is ₹900 crore. The entire sale proceeds are being utilised for debt reduction. RInfra has reduced its total debt liabilities by 6% from the deal proceeds. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/oyo-bags-a-7-4-million-cheque-as-pandemic-forces-ritesh-agarwal-to-reimagine-the-business/articleshow/80170847.cms">OYO bags a $7.4 million cheque as pandemic forces Ritesh Agarwal to reimagine the business</a> <a href="https://www.businessinsider.in/tech/mobile/news/samsung-galaxy-s21-series-mobile-available-on-pre-orders-checkout-expected-price-of-this-smartphone/articleshow/80168058.cms">Samsung Galaxy S21 series now up for pre-orders ⁠— expected to be priced around ₹75,000</a> <a href="https://www.businessinsider.in/stock-market/news/tcs-ongc-tata-power-punjab-national-bank-nhpc-and-other-top-stocks-to-watch/articleshow/80164057.cms?upcache=2">TCS’ market share, ONGC’s borrowing, Tata Power gets new territories⁠— these and other top stocks to watch</a>

Reliance Infra completes sale of entire 74% shareholding in Parbati Koldam Transmission Company Limited India Grid Trust

Tax incentives are key to the success of <keyword id="6354553" type="COMPANY" weightage="60" keywordseo="real-estate">real estate</keyword> investment trusts (REITs) and infrastructure investment trusts (InvITs), the Securities and Exchange Board of India (<keyword id="35210" type="ORGANIZATION" weightage="80" keywordseo="sebi">SEBI</keyword>) has said. 
 
SEBI had notified the norms for listing business trust structures, REITs and InvITs, in September to attract more funds in the real estate sector. Both the trusts will get tax incentives. 
 "Countries like Singapore and Hong Kong had launched REITs but did not give any tax incentives because of which they did not kick off well. The whole REITs structure is motivated by tax benefit. If it is given, then it will work or else it will not," SEBI Executive Director <keyword id="2524820" type="UNKNOWN" weightage="80" keywordseo="Ananta-Barua">Ananta Barua</keyword> said. 
 
Real estate companies and investors have been demanding more clarity on tax structure for REITs and InvITs. 
 
"Taxation is involved at four stages--first while structuring and transferring assets to REITs or InvITs, second when they distribute income to its investors, third when they are traded and fourth time when there is an exit. These are heavy stages so tax issues have to be addressed," said Barua.

Tax Incentives Key To Success
Of Real Estate Investment Trusts: SEBI

At a time when Indian realtors and investors are struggling to start <keyword id="6354553" type="COMPANY" weightage="80" keywordseo="real-estate">real estate</keyword> investment trusts (<keyword id="168019" type="ORGANIZATION" weightage="60" keywordseo="REIT">REIT</keyword>) in the wake of regulatory complications and tax uncertainties, <keyword id="3001" type="COUNTRY" weightage="80" keywordseo="Pakistan">Pakistan</keyword> has gone a step ahead to launch <keyword id="52011" type="CITY" weightage="80" keywordseo="South-Asia">South Asia</keyword>'s first REIT at a premium of 10% to the offer price, reported ET. Pakistan-based <keyword id="2919800" type="UNKNOWN" weightage="100" keywordseo="Dolmen-City">Dolmen City</keyword> came started its REIT offering earlier this month that got subscribed 1.7 times. It owns a commercial property which has a mix of mall and office space. The firm expects a net income of $21.9 million in first year while dividends are expected at $20.7 million. This was also the first REIT listing in Pakistan. 

	A REIT is a financial instrument where the underlying asset is real estate. The rental income from the property assets are distributed by the trust as dividends to the investors or unit holders of the trust. 
 

	Interestingly, yields for the Dolmen City REIT's investors in the first year are a percentage point lower than the current yields on Pakistan's government securities (GSec) that are now trading at 9.75%. 
 

	REITs notes trade at positive spread across the world. This was based on estimation of rental income from the asset, 90% of which have to be distributed back to investors. But even then, there were few global investors who bit the story -- only 0.6% of HNIs/Institution allocation.
 Pakistan has streamlined the process significantly to make it attractive for investors. For example, their REITs attract a withholding tax of 10% (in-line with <keyword id="2920245" type="UNKNOWN" weightage="80" keywordseo="Mutual-fund-taxation">Mutual fund taxation</keyword>) with no further tax liability for individual investors. 

	Moreover, the regulators there have agreed to concessional tax regime for transfer of an asset into a REIT with significant reduction in stamp duty across the region. 
 In comparison to India -- despite the recent relaxations on taxability like MAT exemption, tax pass through to REIT - and simplification of structuring, the REIT controlled special purpose vehicles (SPV) are still subject to corporate and dividend distribution tax (<keyword id="375780" type="ORGANIZATION" weightage="60" keywordseo="DDT">DDT</keyword>) which limits the pass through nature of REITs. 

	This makes it imperative on the SPV to restructure to reduce the tax blow. According to analysts, while debt infusion at SPVs could improve the yields of the instrument, a simplified structure allowing tax pass through would improve transparency and improve visibility of returns to investors.

	 
	(Image: Indiatimes)

Pakistan launches South Asia’s first real estate investment trusts

<ul class="summary-list"><li>From financial apps to publicly traded funds to crypto-exchanges, there are now a multitude of options for investing in <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword>.</li><li>Bitcoin remains risky and volatile, so individuals should invest small amounts, keep their accounts secure, and think long term.</li><li>Bitcoin's dramatic price rise since its 2009 debut is attracting both institutional and individual investors.</li></ul>Bitcoin is possibly <a href="https://www.businessinsider.com/what-is-bitcoin" target="_blank" rel="noopener">the most fashionable investment </a>of the past decade. It has appreciated in value by anything from 717,900% to just shy of one billion percent (<a href="https://www.aier.org/article/was-bitcoin-the-best-performing-asset-of-the-decade/" target="_blank" rel="noopener">depending on your starting figure</a>) over the last 10 years or so. Either way, it's one of the best-performing financial assets in recent history.But while bitcoin is certainly the talk of the town, much of it remains shrouded in mystery. It's not clear to newcomers how best to invest in the <keyword id="6357017" type="DEFINITION" weightage="60" keywordseo="cryptocurrency">cryptocurrency</keyword>, with banks and most mainstream brokerage platforms refusing to handle it. Plus, its price swings can be frighteningly <a href="https://www.businessinsider.com/what-is-volatility" target="_blank" rel="noopener">volatile</a> by the standards of traditional stock and bond <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword>.Let's demystify how to invest in bitcoin: the various places to buy it, the risks and rewards, and strategies for safely ensuring a higher return.<h2>Why invest in bitcoin?</h2>Bitcoin is a cryptocurrency, a form of private, electronic money whose transactions are validated using cryptography, the science of encrypting and decrypting information. Since its launch in January 2009, it has come to be traded amid <a href="https://nakamotoinstitute.org/mempool/the-bullish-case-for-bitcoin/" target="_blank" rel="noopener">the belief</a> that its software-enforced cap to 21 million bitcoins will ensure that it only appreciates in value over the long term."The best argument for Bitcoin's future success is the same argument long used for gold, diamonds and collectibles: It has been designed to have a limited supply and cannot be counterfeited," says Bob Fitzsimmons, the executive VP of Fixed Income, Commodities, and Stock Lending at Wedbush Securities.The appeal of bitcoin's 21-million finite supply became more pronounced in the context of the 2020 coronavirus pandemic, which <a href="https://markets.businessinsider.com/news/stocks/central-banks-buy-trillion-financial-assets-g7-march-federal-reserve-2020-4-1029113160" target="_blank" rel="noopener">has brought record-low interest rates and "unprecedented levels of fiscal stimulus,</a>" says Fitzsimmons. But even before the COVID-19 pandemic, bitcoin has enjoyed significant longer-term price increases. Having been worth around $1 at the beginning of 2010, it reached a new <a href="https://markets.businessinsider.com/currencies/news/bitcoin-hits-new-record-high-after-trading-above-19700-2020-11-1029849416" target="_blank" rel="noopener">all-time high of $23,770.85 on Dec. 17, 2020.</a> It hasn't been a smooth ascent, though. Over the years, the cryptocurrency's price has bounced all over the place, sometimes plunging by hundreds of dollars in hours. It hit <a href="https://www.businessinsider.com/bitcoin-price-in-2017-review-2017-12" target="_blank" rel="noopener">an all-time high of $19,783 in December 2017</a>, too - before falling over the next couple of years by thousands. In fact, in November 2020 <a href="https://markets.businessinsider.com/currencies/news/bitcoin-hits-new-record-high-after-trading-above-19700-2020-11-1029849416">it crashed by $3,000</a>, before climbing again. Given such price swings, bitcoin can be loosely classified in the same investment league as <a href="https://www.businessinsider.com/growth-investing-definition-strategies" target="_blank" rel="noopener">growth</a> and <a href="https://www.businessinsider.com/how-to-invest-in-tech-stocks" target="_blank" rel="noopener">tech stocks</a>, which have provided investors with higher-than-average returns, in exchange for taking on higher-than-average risk.<h2>Buying and investing in bitcoin</h2>Assuming that they're willing to accept the risk, investors interested in buying and investing in bitcoin have a number of options at their disposal. Each has its own advantages and disadvantages.<h3>Bitcoin trusts and funds</h3>For those who aren't keen on the idea of actually handling or owning bitcoin themselves, one simple option is to buy shares in a publicly traded bitcoin trust. Similar to ETFs or mutual funds, these offer a portfolio that holds or trades the currency. "The easiest way to buy bitcoin is through the <a href="https://markets.businessinsider.com/stocks/grayscale_bitcoin_trust_btc_registered-stock" target="_blank" rel="noopener">Grayscale Bitcoin Trust (GBTC) </a>because it tracks the cryptocurrency and trades via the traditional financial market," says Ari Wald, the MD of the Institutional Portfolio Strategy team at Oppenheimer &amp; Co.Besides the <keyword id="10357565" type="UNKNOWN" weightage="60" keywordseo="grayscale-bitcoin-trust">Grayscale Bitcoin Trust</keyword> (which is by far the largest), other bitcoin trusts or funds include:<ul><li>ETC Group <a href="https://www.btc-etc.com/products/btcetc.html" target="_blank" rel="noopener">offers an "exchange-traded cryptocurrency" product</a> that tracks bitcoin and is listed on the Deutsche Börse XETRA.</li><li>3iQ's <a href="https://3iq.ca/the-bitcoin-fund/" target="_blank" rel="noopener">Bitcoin Fund</a>, listed on the Toronto Stock Exchange.</li><li>CoinShares has several <a href="https://coinshares.com/etps/xbt-provider" target="_blank" rel="noopener">bitcoin tracker funds</a> listed on the NASDAQ/OMX exchange in Stockholm.</li><li>Wisdom Tree owns a <a href="https://www.wisdomtree.eu/en-gb/press-room/tabs/latest-news/wisdomtree-launches-physically-backed-bitcoin-etp#" target="_blank" rel="noopener">physically-backed bitcoin exchange-traded product</a> listed on Switzerland's SIX exchange.</li></ul>The main catch: Fees for funds and trusts can be fairly high. The Grayscale Bitcoin Trust <a href="https://grayscale.co/bitcoin-trust/" target="_blank" rel="noopener">charging an annual management fee of 2%</a>, for example. Like others, it "also trades at a substantial premium," relative to the value of the bitcoins it holds, Wald notes. <h3>Financial and investment apps</h3>Recently, there has been a small number of financial and investment apps jumping into the cryptocurrency fray. For example, in November 2020, <a href="https://www.businessinsider.com/paypal-officially-launches-crypto-service-in-us-2020-11" target="_blank" rel="noopener">PayPal began offering its US customers</a> the capability to buy, sell, and make purchases with bitcoin, along with three other cryptocurrencies (ethereum, bitcoin cash, and litecoin)."The biggest obstacle [for bitcoin buying and selling] has always been having to open an account with a bitcoin exchange and providing documents to verify your identity. Because hundreds of millions of people already have PayPal accounts, they can skip all of that hassle," says Glen Goodman, an investment expert and author of The Crypto Trader.However, there are downsides to buying bitcoin with PayPal: "You can't move your bitcoin to your own personal wallet or send it to anybody else. You can't transfer it to a crypto-exchange to use it for trading other cryptocurrencies, Goodman notes. "There are also relatively large fees" for transactions, <a href="https://www.paypal.com/en/webapps/mpp/paypal-fees?utm_source=Triggermail&amp;utm_medium=email&amp;utm_campaign=Post%20Blast%20bii-payments-and-commerce:%20PayPal%20launches%20US%20crypto%20service%20%7C%20Wells%20Fargo%20may%20do%20away%20with%20store%20cards%20%7C%20Klarna%20launches%20price%20monitoring%20feature&amp;utm_term=BII%20List%20PayCom%20ALLPayCom%20ALL" target="_blank" rel="noopener">ranging from 1.5% to 2.3%</a>, depending on the amount you buy or sell. PayPal isn't the only mainstream app cashing in on the crypto craze. The popular investment app Robinhood is also dealing in the currency now, and it <a href="https://robinhood.com/us/en/support/articles/commission-free-cryptocurrency-investing/" target="_blank" rel="noopener">doesn't charge any commission.</a>Square's Cash App is another platform that includes bitcoin trading, while Swan Bitcoin is an app that lets users automatically invest in the cryptocurrency at regular intervals. Square does usually charge service and volatility fees for bitcoin transactions (although <a href="https://cash.app/help/us/en-us/3103-bitcoin-fees" target="_blank" rel="noopener">it doesn't explicitly state</a> what these are on its website), while Swan Bitcoin <a href="https://www.swanbitcoin.com/fees" target="_blank" rel="noopener">charges from 0.99% to 2.29%</a> as a percentage of the weekly amount saved. <h3>Cryptocurrency exchanges</h3>One of the main ways investors purchase bitcoin is through cryptocurrency exchanges. Since this option involves directly buying bitcoin yourself on a dedicated cryptocurrency exchange, it's recommended for more experienced investors. These have certain advantages over the apps and funds, such as:<ul><li>Lower fees in the range of 0.10% to 0.26% </li><li>The ability to withdraw bitcoins and download them to another account. This is considered essential by many experienced bitcoin traders, given that various high-profile cryptocurrency exchanges have suffered hacks over the years. (Some apps do allow it, but popular ones like Robinhood and PayPal are not among them.)</li></ul>As mentioned, this is a more sophisticated game - you're getting into the professional traders' territory. Still, "if you're a more advanced user, then you can probably handle buying on an exchange yourself," says Samson Mow, chief strategy officer of blockchain tech firm Blockstream. "<a href="https://www.bitstamp.net/" target="_blank" rel="noopener">Bitstamp</a> or <a href="https://www.kraken.com/en-gb/features/fee-schedule" target="_blank" rel="noopener">Kraken</a> are reliable platforms" that he recommends for individual investors.Other reputable exchanges operating in the US include <a href="https://www.coinbase.com/" target="_blank" rel="noopener">Coinbase</a>, <a href="https://www.binance.com/en/fee/schedule" target="_blank" rel="noopener">Binance</a>, and <a href="https://www.gemini.com/" target="_blank" rel="noopener">Gemini</a>. To start trading, you'll have to open an account with the exchange. These exchanges follow stringent know-your-customer (KYC) guidelines, so you will need to prove your identity before being able to trade using them. Most exchanges have minimum deposit requirements for fiat currencies and cryptocurrencies, but these are usually very low.<h2>What to know before investing in bitcoin</h2>Despite being over a decade old, bitcoin remains a relatively immature asset. There's less trading volume on its markets, which means it's less <a href="https://www.businessinsider.com/what-is-liquidity" target="_blank" rel="noopener">liquid</a>, and the price changes can be volatile. It's therefore hard to predict how it will behave from one month to the next. Here are some tips for reducing your exposure to risk while also increasing your exposure to potential gain.Keep it safe and secure: Crypto-exchanges still <a href="https://markets.businessinsider.com/currencies/news/btc-binance-suffers-40-million-hack-2019-5-1028182318" target="_blank" rel="noopener">continue to suffer the occasional hack even today.</a> Since bitcoins do not exist in physical form, seasoned bitcoin investors store them in digital wallets. A hardware wallet is a handheld, offline device that securely stores the private key necessary to transfer your bitcoin holdings from one place to another. Ledger and Trezor are two reputable brands. "If the amount you store is going to be a lot, you may also want to add a seed backup," advises Mow. A "seed backup" is a backup of the phrase (i.e. a set of words) that lets you access your bitcoin wallet. Many investors holding large quantities of bitcoin engrave their seed phrases onto metal plates and then store these plates somewhere safe (such as a bank deposit vault).Likewise, you should plan on doing all of your investing from a secure internet connection. In general, trading or buying bitcoin on a public WiFi network makes you more susceptible to attacks from hackers. Start small, rather than big: Given its short history and still highly unpredictable behavior, it's usually wise to keep your initial investment in Bitcoin relatively limited. Even experienced investors (e.g. hedge fund manager <a href="https://markets.businessinsider.com/currencies/news/bitcoin-billionaire-investor-paul-tudor-jones-says-buying-cryptocurrency-inflation-2020-5-1029179495" target="_blank" rel="noopener">Paul Tudor Jones</a>) have allocated just a single-digit percentage of their capital to bitcoin while keeping the rest in less volatile assets. And, despite the hype and forecasts, maintain your investment discipline, buying only what you can afford to potentially lose and not getting swept up by promises of gigantic upswings.Bear taxes in mind: Even though it's a currency, the <a href="https://www.businessinsider.com/bitcoin-taxes-overview" target="_blank" rel="noopener">IRS considers bitcoin to be property</a> rather than money, so it's subject to the same tax treatment as other investment assets. Bitcoin taxes can be triggered by trading, exchanging, or simply spending the cryptocurrency (if it's increased in value since you bought it). So documenting every transaction is essential. The good news is that bitcoin profits are taxed at the special capital gains tax rate, which is often less than ordinary income rates.Have a buy-and-hold mentality: Unless you're prepared to watch the market daily and move at a moment's notice, investing in bitcoin should really be undertaken for the long term. "Bitcoin's heightened day-to-day volatility makes this especially true," says Ari Wald. In other words, it's not really advisable to buy bitcoin expecting to sell it a day, week, or month later, as investors found when <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-tanked-days-coronavirus-market-panic-safe-haven-cryptocurrency-2020-3-1028993978" target="_blank" rel="noopener">the cryptocurrency tanked by 50% in two days in March</a>. However, the fact that bitcoin recovered following this crash to hit a new all-time high in November and then December shows the virtue of patience. <h2>The financial takeaway</h2>The investment outlook for bitcoin is bright. It had an exciting 2020, with <a href="https://markets.businessinsider.com/currencies/news/crypto-assets-bitcoin-owned-large-investors-institutional-fidelity-survey-percentage-2020-6-1029293753">a growing number of corporate investors</a> beginning to snap up the cryptocurrency (a big part of the reason why it has <a href="https://markets.businessinsider.com/currencies/btc-usd">risen in price by 170%</a> since 2019). And with <a href="https://markets.businessinsider.com/currencies/news/insurer-massmutual-scoops-up-100-million-worth-of-bitcoin-2020-12-1029885209">more institutional investors buying bitcoin every month</a>, and the cryptocurrency's relative supply shrinking, most analysts seem to think it still has space to rise higher.Not only has the future never looked better for bitcoin, but it has never been easier to buy and invest in the cryptocurrency. From payment apps to bitcoin funds to crypto-exchanges, there are now a multitude of options for anyone wanting to gain exposure to the original all-digital asset. <h2>Related Coverage in <a href="https://www.businessinsider.com/investing-reference" target="_blank" rel="noopener">Investing</a>:</h2><h3><a href="https://www.businessinsider.com/what-are-capital-gains" target="_blank" rel="noopener">Capital gains are the profits you make from selling your investments, and they can be taxed at lower rates</a></h3><h3><a href="https://www.businessinsider.com/what-are-alternative-investments" target="_blank" rel="noopener">Alternative investments are exotic assets that can diversify your portfolio - here are the five major kinds and everything you should know about them</a></h3><h3><a href="https://www.businessinsider.com/what-are-liquid-assets" target="_blank" rel="noopener">What are liquid assets? A guide to the investments that are easiest to cash in, and why they're important</a></h3><h3><a href="https://www.businessinsider.com/how-to-diversify-portfolio" target="_blank" rel="noopener">How to diversify your portfolio to limit losses and guard against risk</a></h3><h3><a href="https://markets.businessinsider.com/currencies/news/stock-market-outlook-bitcoin-portfolio-crypto-skeptic-investing-bernstein-2020-12-1029854263" target="_blank" rel="noopener">'I have changed my mind': A top market strategist and long-time crypto skeptic explains why he now believes bitcoin should be in investor portfolios</a></h3>

How to invest in bitcoin: The major ways to buy, their pros and cons, and the strategies to consider

<keyword id="6984075" type="General" weightage="20" keywordseo="NSE-Indices" source="Orion">NSE Indices</keyword> Ltd, an arm of the <keyword id="53581" type="General" weightage="80" keywordseo="national-stock-exchange" source="Orion">National Stock Exchange</keyword> (<keyword id="6354646" type="General" weightage="20" keywordseo="NSE" source="Orion">NSE</keyword>), on Tuesday, launched the country's first-ever Real Estate Investment Trusts and Infrastructure Investment Trusts index - Nifty <keyword id="11931834" type="General" weightage="20" keywordseo="REITs" source="Orion">REITs</keyword> and <keyword id="17097508" type="General" weightage="20" keywordseo="InvITs-index" source="Orion">InvITs Index</keyword>. The index aims to track the performance of REITs and InvITs that are publicly listed and traded on the NSE, the exchange said in a statement. A real estate investment trust (REIT) or an infrastructure investment trust (InvIT) is an investment vehicle that owns revenue-generating real estate or infrastructure assets. REITs invest in real estate projects, whereas InvITs invest in infrastructure projects with a long gestation period. Through these trusts, investors get exposure to diversified regular income-generating real estate and infrastructure assets. "REITs and InvITs are recognised as strong alternative financial instruments to raise funds against the cash generating infrastructure and real estate projects. For investors, these instruments provide exposure to real estate or infrastructure assets and offer diversification of risk from regular asset classes like equity, debt and gold and generate regular income," NSE Indices CEO Mukesh Agarwal said. The weights of securities within the index will be based on their free-float market capitalisation, subject to a security cap of 33 per cent each, and the aggregate weight of the top three securities is capped at 72 per cent. The Nifty REITs and InvITs index has a base value of 1,000 and the index will be reviewed and rebalanced on a quarterly basis. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sports/news/bcci-to-spend-rs-500-crore-to-upgrade-five-major-stadiums-ahead-of-world-cup/articleshow/99406322.cms">BCCI to spend Rs 500 crore to upgrade five major stadiums ahead of World Cup</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/space/news/a-giant-asteroid-the-size-of-qutub-minar-to-pass-dangerously-close-to-earth-at-30-times-the-speed-of-sound/articleshow/99406843.cms">Just Look Up: Giant asteroid the size of Qutub Minar to pass dangerously close to Earth</a>

NSE Indices launches India's first-ever REITs and InvITs index

<ul class="summary-list"><li>Individual investors can invest in <keyword id="18712" type="ENTERTAINMENT" weightage="60" keywordseo="Gold" source="Orion">gold</keyword> in two ways: physical <keyword id="6384667" type="UNKNOWN" weightage="60" keywordseo="Bullion" source="Orion">bullion</keyword> (bars or coins), or securities (stocks, funds) that represent gold.</li><li>While bullion is a more direct, "pure" way to own gold, securities are easier to hold and can appreciate.</li><li>Analysts recommend investing 5 to 10% of your portfolio in gold, as a long-term inflation hedge and diversifier.</li></ul>Ah, gold. It's rare, accepted everywhere, and governments can't print it at will. These are the reasons that some folks - fondly known as "gold bugs" - have always invested heavily in the honey-hued metal. And in times of financial chaos, they're not the only ones."History has shown that during economic slowdowns, from the <a href="https://www.businessinsider.com/what-caused-the-great-depression" target="_blank" rel="noopener">Great Depression</a> to the COVID-19 pandemic, gold appreciates in value," says financial analyst James Jason of Mitrade, a commodities trading platform.No matter what the state of the economy, gold offers a good way to diversify your assets. Many financial advisors recommend keeping anywhere from 5% to 10% of your portfolio in it - perhaps up to 15% in times of crisis.Individuals have two main ways to invest in gold: <ul><li>Physical gold, or bullion (the most obvious, but not necessarily the least expensive) </li><li>Gold securities such as stocks, funds, and futures (less of a pure play, but more convenient)</li></ul>Let's go digging into both.<h2>How to invest in physical gold</h2>Physical gold comes in many forms and sizes, each with its own characteristics and costs. <h3>Gold bullion</h3>Bullion often refers to gold in bulk form, <a href="https://blog.providentmetals.com/poured-bars-vs-ingots-major-differences-similarities.htm#.X1ZSXXlKhhE" target="_blank" rel="noopener">usually bars or ingots</a>. Typically, gold bars are poured and ingots are pressed (a cheaper production method). As a result, bars command a higher premium, or added cost, over the daily spot price of gold than ingots. Ranging in size from quarter-oz. wafer to a 430-oz. brick, bars, and ingots are stamped with purity, origin, weight, and where the bullion was minted. Not all gold is equal, especially when it comes to purity and weight. Investment-grade gold is <a href="http://www.lbma.org.uk/cn/downloads/LBMA_Interactive.pdf" target="_blank" rel="noopener">at least 99.5% pure</a>.Bullion bars and ingots <a href="https://www.consumer.ftc.gov/articles/0135-investing-bullion-and-bullion-coins" target="_blank" rel="noopener">are sold by</a> banks and gold dealers. Banks often offer physical gold at a lower-markup than dealers but finding a branch that actually has it may be harder.<h3>Gold coins</h3>Minted coins are another common way to buy physical gold. Not to be confused with old rare coins that numismatists collect, these coins are new, minted by governments for investors. The prices they fetch are based on their gold content -aka their "melt value"- plus a 1%-5% premium. Although several governments issue gold coins, for maximum liquidity, most buyers stick with the most widely circulated and recognized:<ul><li>American Gold Eagle</li><li>Australian Gold Nugget</li><li>Canadian Maple Leaf</li><li>South African Krugerrand</li></ul>Minted bullion coins are available from major banks, coin dealers, brokerage firms, and precious metal dealers.<h2>Pros and cons of physical gold</h2>For many people, the whole point of owning gold is to own the physical stuff. It's the actual metal that has most of the inherent investment advantages. <h3>Advantages of physical gold</h3><ul><li>Inflation hedge. Advocates argue that, as a tangible asset, gold maintains an intrinsic value that always reflects the cost of living. There's an old saying that an ounce of gold equals the cost of a quality business suit. That held in 1934 when men's suits fetched $35, and it does today too, with gold close to $2,000 an ounce (of course, that suit better be a Boglioli). </li><li>Counterweight to stocks. Like other commodities, gold acts as a counterfoil to equities, usually moving in the opposite direction of the stock market. Case in point: When the subprime mortgage meltdown began in 2008, ushering in the Great Recession, gold-which for years had been trading in the $400-600 range-shot up to $1,000 per ounce and kept going for the next three years.</li><li>Safe haven. Gold's seen as a safe haven in uncertain times or whenever there's socio-political turmoil. After the 2016 Brexit vote, its price rose over 10% in one month, for example. "Owning gold," says Dennis Notchick, a certified financial planner at Stratos Wealth Advisors, "appeals to individuals who are concerned about the collapse of global <keyword id="31671" type="CITY" weightage="100" keywordseo="markets" source="Orion">markets</keyword> or other threats to a government's ability to back its currency." </li><li>Virtually indestructible. "Physical gold cannot be hacked or erased," says Charles Stevens, COO of Bullion Box Subscriptions. (Remember, we're thinking in catastrophic terms here.) "Gold cannot be destroyed by a natural disaster and it will not get worn down in time."</li></ul><h3>Drawbacks of physical gold </h3><ul><li>Expensive to hold. Storing gold at home carries enormous risks of theft or loss. Keeping it in a commercial facility incurs storage costs, often based on the size and value of the holdings (anywhere from .5% to 2%). If you're not using a professional storage facility, you'll want to insure your gold, too - another ongoing charge. </li><li>Illiquid. Physical gold can't be sold with a press of the button or a call to a broker. Even with dealers acting for you, a sale can get days or weeks to settle, plus you have to arrange for shipping. </li><li>Does not produce income or profit. A $1,000 investment in bullion buys $1,000 - period. Physical gold doesn't generate interest or dividends. The only potential for appreciation is if there's a jump in prices that lets you sell at a profit (and even that can be compromised by the time, effort, and various assessment costs that accompany selling).</li></ul><h2>How to invest in gold securities</h2>Given the hassles and limits of bullion, gold securities - in the form of stocks, funds, or options - are often a better choice, especially for novice investors. They may not be as pretty, but they're infinitely more practical:<h3>Gold stocks</h3>Buying shares of companies in the mining, refining, or other aspects of the gold production business is one way to play. About 300 of these companies, aka "miners," are listed on major stock exchanges. Their share prices generally reflect the movement of the metal itself. However, "the growth and return in the stock depend on the expected future earnings of the company, not just on the value of gold," notes the World Gold Council, an industry trade group.<h3>Gold ETFs and mutual funds</h3>More conservative investors can buy shares in gold-oriented mutual funds or exchange-traded funds (ETFs). These funds have varying investment approaches: gold-backed ETFs tend to invest directly in physical gold, while mutual funds favor gold mining stocks. Some funds invest in both. But all offer a liquid, low-cost entry into the gold market that is more diversified, and so lower-risk, than buying equities outright.<h3>Gold options</h3>More seasoned investors might consider an option on a gold <a href="https://markets.businessinsider.com/commodities" target="_blank" rel="noopener">futures</a> contract. Like any financial option, these represent the right - but not the obligation - to buy or sell an asset (gold in this case) at a specific price during a specified window of time. You can buy an option to bet on whether gold's going up or going down, and if the market moves the opposite way, all you've lost is the small amount you've paid for the option. Gold options trade on a division of the Chicago Mercantile Exchange (CME) known as COMEX. Gold options can be bought on gold bullion or on gold ETFs.<h2>Pros and cons of gold securities</h2>Like any financial asset, gold securities have both benefits and drawbacks.<h3>Advantages of gold securities</h3>Along with some of the general benefits of gold ownership, securities offer:<ul><li>Liquidity. Trading as they do on major exchanges, gold securities are obviously easier to buy and sell than bullion. No storage costs, either - aside from any management or account fees your broker or fund manager might charge.</li><li>Compounded returns. While dividends offered by miners are typically average at best, they are greater than no dividends at all, which is what you get from physical gold. And there is also the possibility of appreciation in the share price.</li><li>Low initial investment. The most cost-efficient way to invest in general, mutual funds and ETFs let you in on the game at a far lower cost. With the <a href="https://markets.businessinsider.com/commodities/gold-price" target="_blank" rel="noopener">spot price </a>of an ounce of gold around $2,000, $180 for a share of the SPDR Gold Shares ETF (<a href="https://markets.businessinsider.com/etfs/spdr-gold-shares-us78463v1070" target="_blank" rel="noopener">GLD</a>) - equal to 1/10th of an ounce of gold - is, well, spot on. </li></ul><h3>Drawbacks of gold securities</h3><ul><li>Volatility. Just as with any company, a miner's operating costs, reserves, and management all play a factor in its performance. As a result, shares prices tend to be more volatile: If bullion sinks 10%, gold stocks often plummet 15%. Miners definitely "have a higher speculative aspect to them," says investment strategist Lyn Alden, who follows precious metals and currencies. </li><li>Systematic risks. A gold mining company's share performance also reflects in political and economic conditions in its native country. Some of the biggest operations are in Africa, Russia, and Latin America - places that have known their share of turbulence and are often avoided by socially responsible and institutional investors.</li><li>You don't own gold. Gold securities are less of a pure play. They represent physical gold but you <a href="https://nationwidecoins.com/gold-stocks-vs-physical-gold-portfolio-options-explained/" target="_blank" rel="noopener">don't have the right</a> to redeem them for the actual metal. So they don't provide the protection against a paper currency or financial market meltdown that the metal itself does. </li></ul><h2>The financial takeaway</h2>So, should you go for the gold? Though it usually becomes part of the conversation during times of economic crisis or political uncertainty, gold as part of your portfolio makes sense anytime - as a diversifier of your holdings, if nothing else. But how much to invest, and what form to invest in, depends on your own tolerance for risk and desire for convenience.<a data-type="61143d4737043a45f7070cd8">Digital assets are becoming the new normal - here's how to buy cryptocurrency</a><a data-type="613a241ebd69125fd4743686">Start investing in mutual funds in 4 steps</a><a data-type="6140c7ba4dde6127641ef2ec">What to know about staking - the process of locking up crypto holdings to earn rewards and interest</a><a data-type="613a2035b0b35f5c695cf174">5-step beginner's guide to investing in index funds</a>

How to start investing in gold - and the major benefits and drawbacks to know about

Shares of <keyword id="11158922" type="COMPANY" weightage="20" keywordseo="powergrid-infrastructure-investment-trust">PowerGrid Infrastructure Investment Trust</keyword> listed with a <keyword id="47469" type="PERSON" weightage="20" keywordseo="premium">premium</keyword> of 4 per cent on Friday against its issue price of ₹100. The stock made its debut at ₹104, registering a gain of 4 per cent on the <keyword id="35140" type="COMPANY" weightage="20" keywordseo="BSE">BSE</keyword>. It further jumped 4.97 per cent to ₹104.97 as the trade progressed. At the <keyword id="6354646" type="COMPANY" weightage="20" keywordseo="nse">NSE</keyword>, it listed at ₹104, with a premium of 4 per cent. Earlier this month, the initial public offer of PowerGrid Infrastructure Investment Trust was subscribed 4.83 times. Price range for the offer was at ₹99-100 per unit. PowerGrid Infrastructure Investment Trust (<keyword id="11158539" type="COMPANY" weightage="20" keywordseo="PowerGrid-InvIT">PowerGrid InvIT</keyword>) is owned by state-owned <keyword id="400999" type="COMPANY" weightage="20" keywordseo="PowerGrid-Corporation-of-India">PowerGrid Corporation of India</keyword>. <keyword id="6425787" type="COMPANY" weightage="20" keywordseo="InvITs">InvITs</keyword> are instruments on the pattern of mutual funds and are designed to pool small sums of money from a number of investors to invest in assets that give cash flow over a period of time. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/after-ditching-bitcoin-elon-musk-is-now-working-on-making-dogecoin-efficient/articleshow/82628521.cms" style="">After ditching Bitcoin, Elon Musk is now working on making Dogecoin efficient</a> <a href="https://www.businessinsider.in/cryptocurrency/news/four-reasons-why-cryptocurrency-ethereum-has-been-on-a-bull-run/articleshow/82606761.cms" style="">Four reasons why cryptocurrency Ethereum has been on a bull run</a> <a href="https://www.businessinsider.in/science/health/news/covid-19-a-couple-from-chennai-has-come-up-with-this-innovation-of-a-surgical-mask-vending-machine-/articleshow/82605058.cms">Even small initiatives during a pandemic can help save a thousand lives, these people are doing their bit</a>

You Searched For "Investment trust" and got 13 results

Govt exempts investment trusts, ETFs from capital gains tax in GIFT City

PTI

What is a unit investment trust? An easy way to build diversification while earning steady income

Alexis Rhiannon

NTPC looks at KV with NIIF for renewable infrastructure investment trust

IANS

Real Estate Investment Trusts (REITs)

SEBI extends deadline till Mar 15 to submit public comments on proposal on REITs, InvITs sponsors

PTI

Real estate investment trust pitch for direct bank lending, classification as equity

PTI

Reliance Infra completes sale of entire 74% shareholding in Parbati Koldam Transmission Company Limited India Grid Trust

IANS

Tax Incentives Key To Success Of Real Estate Investment Trusts: SEBI

BI India Bureau

Pakistan launches South Asia’s first real estate investment trusts

BI India Bureau

How to invest in bitcoin: The major ways to buy, their pros and cons, and the strategies to consider

Simon Chandler

NSE Indices launches India's first-ever REITs and InvITs index

PTI

How to start investing in gold - and the major benefits and drawbacks to know about

Jim Probasco

PowerGrid Infrastructure Investment lists at a premium of 4% against issue price of ₹100

PTI

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