Best Gold ETFs in India for Investment - Top Picks and Perfomance (2024)

Investing in Gold Exchange Traded Funds (ETFs) has become increasingly popular among investors in India seeking exposure to the precious metal without the hassle of physical ownership. This guide will explore some of Best Gold ETFs in India, considering longevity, asset under management (AUM), professional management, and historical returns.

What is Gold ETFs

Gold ETFs is investment funds traded on stock exchanges and backed by physical gold bullion. In India they are regulated by the Securities and Exchange Board of India (SEBI) and offered by various mutual fund companies. These ETFs aim to track the performance of gold prices and provide investors with returns that closely mirror the movements in the price of gold.

One of the key advantages of Gold ETFs is their ability to offer investors exposure to gold without the need for physical storage or security concerns. Investors can buy and sell ETF units on the stock exchange, just like they would with stocks, making them highly liquid and convenient investment instruments.

List of 5 Best Gold ETFs in India

Overview of 5 Best Gold ETFs in India

1. GOLDBEES

GOLDBEES is one of the best Gold ETF in India offered by Nippon India Mutual Fund (formerly Reliance Mutual Fund), is India's oldest and largest Gold ETF. Since its inception, GOLDBEES has maintained its dominance in the market, providing investors with a reliable avenue for gold investment. Its longevity and size make it a preferred choice for many investors seeking stability and liquidity.

1. Fund Name: NIPPON INDIA ETF GOLD BEES
2. NAV: Rs.55.39
3. Expense Ratio: 0.79%
4. AUM: Rs.8,929 crore
5. Market Cap: 8,709 Cr
6. Volume: 3205590
7. Risk: High risk
8. Minimum lump sum investment: Rs.10,000

Returns:

2. HDFCGOLD

HDFCGOLD is one of the largest ETFs in India by assets under management (AUM). Managed by HDFC Mutual Fund, this ETF provides investors with diversified exposure to various sectors of the Indian economy, making it a suitable option for long-term growth-oriented investors.

1. Fund Name: HDFC Gold Exchange Traded Fund
2. NAV: Rs.57.36
3. Expense Ratio: 0.59%
4. AUM: Rs.4,118 crore
5. Market Cap: 3,508 Cr
6. Volume:459605
7. Risk: High risk
8. Minimum lump sum investment: Rs.5,000

Returns:

3. AXISGOLD

AXISGOLD is another best Gold ETF in India managed by Axis Mutual Fund, stands out for its professional management approach. The fund is formally managed by seasoned professionals who employ strategic investment tactics to maximise returns while mitigating risks. AXISGOLD's emphasis on proactive management and adherence to rigorous investment principles make it a compelling choice for investors seeking reliable gold exposure.
AXISGOLD is a popular choice among investors looking to diversify their portfolios.

1. Fund Name: Axis Gold ETF
2. NAV: Rs.56.18
3. Expense Ratio: 0.56%
4. AUM: Rs.796 crore
5. Market Cap: 790 Cr
6. Volume:37403
7. Risk: High risk
8. Minimum lump sum investment: Rs.5,000

Returns:

4. BSLGOLDETF

BSLGOLDETF, offered by Birla Sun Life Mutual Fund, is another noteworthy option known for its expert management and prudent investment strategies. Backed by Birla Sun Life's expertise in the financial industry, the fund is managed by a team of seasoned professionals who continuously monitor market trends and adjust the portfolio accordingly.
BSLGOLDETF offers investors the assurance of expert guidance and the potential for consistent returns.

1. NAV: Rs.58.55
2. Expense Ratio: 0.54%
3. AUM: Rs.675 crore
4. Market Cap: 669 Cr
5. Volume:10727
6. Risk: High risk
7. Minimum lump sum investment: Rs.5,000

Returns:

5. KOTAKGOLD

KOTAKGOLD, managed by Kotak Mutual Fund, stands out for its impressive track record of delivering strong returns to investors. With a focus on capital appreciation and wealth creation, KOTAKGOLD has consistently outperformed its benchmarks, making it an attractive option for investors seeking above-average returns on their gold investments. The fund's proactive investment approach and commitment to delivering value to investors make it a top contender in the ETF space.

1. NAV: Rs.55.67
2. Expense Ratio: 0.55%
3. AUM: Rs.3,261 crore
4. Market Cap: 3,161 Cr
5. Volume: 281787
6. Risk: High risk
7. Minimum lump sum investment: Rs.100

Returns:

To invest in Best Gold ETFs, investors need a Demat account with a registered stockbroker. Get your FREE Demat account from Lakshmishree Investments today.

Top Gold ETFs in India ( Based on 1yr Return )

Top Gold ETF in India ( Based on 5yr Return )

Advantages of Investing in Best Gold ETFs

1. Liquidity: It trades on stock exchanges like equities, allowing investors to buy and sell shares throughout market hours. This liquidity ensures easy access to funds, allowing investors to capitalise on price movements swiftly.
2. Cost-effective: Compared to physical gold, investing in ETFs eliminates expenses associated with storage, insurance, and security. These ETFs typically have lower expense ratios than actively managed mutual funds, reducing overall investment costs.
3. Transparency: It provide transparent pricing and holdings information, allowing investors to track the value of their investments in real-time.
4. Accessibility: It enable investors to gain exposure to gold without the logistical challenges of owning physical bullion.
5. Tax Efficiency: They are taxed as capital assets, subject to long-term or short-term capital gains tax based on the holding period. Compared to physical gold, which attracts wealth tax and making charges, Gold Exchange Traded Funds offer tax advantages, enhancing overall investment returns.

How Gold ETFs Work

Gold Exchange-Traded Funds (ETFs) function like mutual funds but track the price of gold instead of holding physical gold. When you invest in a Gold ETF, your money is pooled with that of other investors and used to buy gold bullion. This gold is then stored securely by the fund's custodian.

The value of your investment in the Gold Exchange Traded Funds is directly linked to the price of gold. As the price of gold rises or falls in the market, the value of your ETF shares also fluctuates accordingly. You can buy or sell Gold ETF units on the stock exchange, just like stocks, making them easy to trade and liquidate.

Overall, this ETFs offer a convenient and cost-effective way to invest in gold without the hassle of owning physical gold.

Things to Consider Before Investing in Best Gold ETFs in India

Investing in Best Gold ETFs can be an intelligent decision, but it's essential to consider a few factors before diving in:

1. Market Conditions: Keep an eye on the current market conditions and gold prices. Investing during a price dip can maximise your returns in the long run.
2. Expense Ratios: Check the expense ratios of different ETFs. Lower expense ratios mean you'll keep more of your investment returns.
3. Liquidity: Ensure the ETF you choose is liquid, meaning there's enough trading volume to buy or sell shares quickly without significant price impact.
4. Tracking Error: Look into the tracking error of the ETF. A lower tracking error indicates that the fund closely mirrors the performance of gold prices.
5. Assets Under Management (AUM): Assess the AUM of the Gold ETF, which reflects the total value of assets the fund holds. A higher AUM may indicate greater investor confidence and liquidity in the ETF.
6. Net Asset Value (NAV): Understand the NAV of the Gold ETF, which represents the per-share value of the fund's assets. Comparing the NAV with the current market price can help assess whether the ETF trades at a premium or discount.

How to Invest in Best Gold ETFs

You can invest in Best Gold ETFs without any hassle in easy steps using the below instructions:

Step 1: To begin, connect with a stockbroker to establish an online trading and DEMAT Account, the initial and most critical step. ( Click here to get your free demat )

Step 2: Then, utilise your Login ID and Password to access your account via the broker's online trading portal website.

Step 3: In the subsequent step, search the ETF you wish to invest in. You can make a lumpsum investment or invest regularly through systematic SIPs. Additionally, you can explore Mutual Funds that include inherent Gold ETFs.

Step 4: Order a buy order for a specific quantity of ETF units.

Step 5: Upon completion, expect to receive a confirmation message via your designated Phone number or Email Address.

Step 6: The web system will automatically debit a small fee from your linked Savings Account.

Gold ETF Vs Physical Gold

Here's a table highlighting the differences between Gold ETFs and physical gold:

Also Check

Conclusion

ETFs offer investors a convenient and cost-effective way to diversify their portfolios and achieve their investment objectives. By carefully evaluating the best gold ETFs available in India and considering key factors such as performance, management, and liquidity, investors can make informed decisions to enhance their investment returns.

Frequently Asked Questions