Exchange-traded funds (ETFs) are going out of fashion after the government launched Sovereign Gold Bonds which pay an interest of 2.5 per cent of the initial amount. However, the latter can be exited only after five years. Though they are listed on the exchanges, liquidity is poor. ETFs offer better liquidity. While your long-term investments
in gold may be tied up in SGBs, those who need to sell in the near term should invest in gold ETFs.