Over the last ten years, the price of gold would move in lock step with major world events that were taking place. As the precious metal would trade at all time highs and became a safe haven for investors that were concerned about a number of events.

These include: the meltdown of the global financial system, significant declines in the dollar, terrorism, nuclear proliferation and increasing tensions among the major world powers.

When you put these different elements together, this is highlighting how gold has become an asset that will see an increase in value, despite the uncertainties that are taking place.

In the past, trading the precious metal proved to be problematic, as investors would have to take large amounts of risk by purchasing the futures. However, within the last several years, the popularity of this investment has opened up significant opportunities for most investors through exchange traded funds (EFTs). These are the closed ended mutual funds that will mirror the price performance of gold.

This is accomplished by having the mutual fund company use various trading strategies, as a way to increase their overall returns and reflect those of the precious metal.

One such ETF that has been delivering solid returns is the SBI Gold ETF Scheme. Under this investment, the fund managers are seeking out areas that can mirror the price appreciation in the precious metal. While at the same time, they are seeking to limit the overall adverse impact of unexpected declines that could occur.

To achieve this objective, the fund will invest the major of its assets (at least 90%) in gold and gold bullion related products. At the same time, they will seek to place a percentage of the assets into debt and money market instruments (generally no more than 10% of the portfolio).

This is important, because it allows the fund to be able to participate in the sharp increases, while helping to mitigate any kind of short term volatility that is taking place. When you put these two elements together, this gives the ETF more stability in comparison with similar investments.

Where, it can provide long term growth, without the volatility that is known to accompany this asset class.

Clearly, the SBI Gold ETF Scheme is one way that the average investor can participate in the sharp increases in gold prices. At the same time, this strategy ensures that volatility and risk are reduced as much as possible. This will help to provide any portfolio with balance and diversification over the long term.