Gold exchange-traded funds (ETFs) provide an opportunity for investors to benefit from the price appreciation of gold without the need to physically purchase the metal. These funds track the price of 99.5% pure gold, with each ETF unit representing one gram of gold. Unlike physical gold, gold ETFs have no making charges, and their prices are uniform across markets. Traded on stock exchanges, gold ETFs require a demat account for investment.
Gold ETFs are passive funds, meaning their performance is closely tied to the price of gold. While gold prices can fluctuate in the short term, these funds are ideal for investors with a long-term investment horizon. Here’s a look at the top 5 gold ETFs based on their highest annualized returns (CAGR) over the past 10 years and how a one-time investment of Rs 1,25,000 would have grown in this period.
LIC MF Gold ETF
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Annualized Return: 11.80%
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Assets Under Management (AUM): Rs 263 crore
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Net Asset Value (NAV): Rs 7,966.3488 (as of March 26, 2025)
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Expense Ratio: 0.41%
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Minimum Investment: Rs 10,000
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Performance: A Rs 1,25,000 investment in this ETF would have grown to Rs 3,81,353.77 over 10 years. Since its launch in November 2011, it has provided a 7.70% annualized return, benchmarked against the domestic price of gold.
Invesco India Gold ETF
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Annualized Return: 11.58%
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AUM: Rs 233 crore
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NAV: Rs 7,707.6247
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Expense Ratio: 0.55%
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Minimum Investment: Rs 5,000
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Performance: A Rs 1,25,000 investment in the ETF has grown to Rs 3,73,915.60. Since its inception in March 2010, it has provided an annualized return of 10.65% compared to the domestic price of gold.
UTI Gold Exchange Traded Fund
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Annualized Return: 11.54%
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AUM: Rs 1,713 crore
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Unit Price: Rs 74.5337
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Expense Ratio: 0.50%
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Minimum Investment: Rs 20,000
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Performance: A Rs 1,25,000 investment has grown to Rs 3,72,577.32. The fund, launched in March 2007, has delivered a 12.15% annualized return, benchmarked against the domestic price of gold.
HDFC Gold ETF Fund of Fund – Direct Plan
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Annualized Return: 11.53%
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Fund Size: Rs 3,303 crore
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Unit Price: Rs 27.6485
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Expense Ratio: 0.18%
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Minimum Investment: Rs 100 (for SIP or lump sum)
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Performance: A Rs 1,25,000 investment in this fund has increased to Rs 3,72,243.42 over the past 10 years. Since its launch in January 2013, the fund has provided an annualized return of 7.78%, benchmarked against the domestic price of gold.
Aditya Birla Sun Life Gold ETF
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Annualized Return: 11.51%
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AUM: Rs 1,043 crore
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NAV: Rs 77.5624
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Expense Ratio: 0.54%
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Minimum Investment: Rs 5,000
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Performance: A Rs 1,25,000 investment in this ETF has appreciated to Rs 3,71,576.44 over the last decade. Since its launch in May 2011, it has provided a 9.41% annualized return, benchmarked against the domestic price of gold.
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