Physical Gold Versus Virtual Gold (Exchange Traded Fund). Drawbacks of ETF's : A small asset management fee is charged by the fund house, so the return is slightly less than the actual increase in the gold price. Moreover, there are additional costs involved at the time of buying and selling in the form of brokerage or commission. Another drawback with gold ETFs is liquidity; some ETFs are illiquid, which impacts their buying and selling flexibility. While, Physical Gold Can Be Liquidated With Any Gold Jewellery Manufacturer Like Brilliant Cut In Chennai To Get 100% Resale Value on Prevailing Market Price, Without Paying Any Commission.