Gold in portfolio is mandatory, ETF the best: Goldman Sachs

During these tumultuous times for the markets, the only reprieve that investors see is in the yellow precious metal. More and more people have been buying gold exchange traded funds (ETFs), and the segment has seen a volume growth of almost 25% in the past three months, says Sanjiv Shah, Co-CEO of Goldman Sachs.

In an interview with CNBC-TV18, he says that ETFs in India give an edge to the customer in the sense that it gives them an opportunity to buy gold at international prices with no additional or hidden cost. "Having gold as part of asset allocation is imperative for diversification of portfolio. Gold can be held in many forms, but gold ETFs are the best," he says. Below is the edited transcript. Also watch the accompanying video Q: A word on whether this entire run on gold has caused more redemption pressure or fresh inflows? How are people choosing to approach the kind of rally we have seen in gold so far with specific reference to ETF product?
A: Fresh inflows, the normal thought would be that given the run up in gold prices, most people would actually start booking profits. However, what we have seen over the last year and more is that people have been buying gold. If you look at the whole ETF space in India, the size has been growing from strength to strength. Everyday we see more and more people buying gold ETFs. Maybe, it