10 Best Gold ETFs in India to Invest in April 2023
Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physical gold in the local market. These funds invest in gold bullion, as in gold that is 99.50% pure. Investors can earn profit whenever there is positive price movement in gold prices without having to store and buy physical gold. Here’s a list of 10 best gold ETFs 2023 you can consider investing in.
10 Best Performing Gold ETFs in India in 2023
Here are the best gold ETF funds 2023 in India that you can invest:
| Gold ETF | Features |
| Axis Gold ETF | NAV: ₹48.84 Expense Ratio: 0.53% AUM: ₹756.85 Cr |
| IDBI Gold Exchange Traded Fund | NAV: ₹5319.49 Expense Ratio: 0.35% AUM: ₹94.67Cr |
| ICICI Prudential Gold ETF | NAV: ₹50.12 Expense Ratio: 0.5% AUM: ₹3332.52 Cr |
| Invesco India Gold ETF | NAV: ₹5173.46 Expense Ratio: 0.55% AUM: ₹89.3 Cr |
| Kotak Gold ETF | NAV: ₹49.74 Expense Ratio: 0.55% AUM: ₹2580.36 Cr |
| HDFC Gold Exchange Traded Fund | NAV: ₹50.29 Expense Ratio: 0.59% AUM: ₹3353.55 Cr |
| UTI Gold Exchange Traded Fund | NAV: ₹46.68 Expense Ratio: 1.13% AUM: ₹817.90 Cr |
| Aditya Birla Sun Life Gold ETF | NAV: ₹52.34 Expense Ratio: 0.54% AUM: ₹355.56 Cr |
| SBI- ETF Gold | NAV: ₹51.08 Expense Ratio: 0.64% AUM: ₹2824.08 Cr |
| Quantum Gold Fund | NAV: ₹49.39 Expense Ratio: 0.78% AUM: ₹154.60 Cr |
*Disclaimer: Gold ETF investments are subject to market risks, read all scheme related documents carefully.
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Performance of the 10 Best Gold ETFs in 2023 – Detailed Overview
1. Axis Gold ETF
Axis Gold ETF is an open-ended gold commodity scheme from Axis Mutual Fund House. This product is appropriate for investors seeking capital appreciation over the medium to long term and investing primarily in gold in order to generate returns comparable to gold’s performance. Check more details about Axis Gold ETF
- NAV: ₹48.84
- Expense Ratio: 0.53%
- AUM: ₹756.85 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹5000
- Returns:
- 3-Year Returns: 10.87
- 5-Year Returns: 12.58%
2. IDBI Gold Exchange Traded Fund
IDBI Gold Exchange Traded Fund was launched by IDBI Mutual Fund. This product is appropriate for investors looking to mimic the performance of gold at domestic prices via investments in physical gold and gold-related securities, debt, and money market instruments over at least a medium time horizon.
- NAV: ₹5319.49
- Expense Ratio: 0.35%
- AUM: ₹94.67Cr
- Risk: High Risk
- Min Lump Sum Investment ₹10000
- Returns:
- 3-Year Returns: 11.68%
- 5-Year Returns: 13.07%
3. ICICI Prudential Gold ETF
ICICI Prudential Gold ETF is one of the best Gold ETFs, it is an open-ended commodity scheme that is ideal for long term investment. It is offered by ICICI Prudential Mutual Funds. This product is appropriate for investors looking for a long-term wealth creation strategy as well as a gold exchange-traded fund that aims to offer investment returns that closely match domestic gold prices.
- NAV: ₹50.15
- Expense Ratio: 0.5%
- AUM: ₹3332.52 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹5000
- Returns:
- 3-Year Returns: 10.78%
- 5-Year Returns: 12.40%
4. Invesco India Gold ETF
Invesco India Gold ETF is one of the best Golds ETFs launched by Invesco Asset Management (India) Private Ltd. This fund has no lock-in period and has provided an average ROI of 8% since inception. Suitable for investors looking for long-term capital growth that produces returns that closely resemble the returns on investments in actual gold on the domestic market.
- NAV: ₹5173.46
- Expense Ratio: 0.55%
- AUM: ₹89.3 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹5000
- Returns:
- 3-Year Returns: 11.64%
- 5-Year Returns: 12.99%
5. Kotak Gold ETF
Kotak Gold ETF It is an open-ended gold exchange traded fund that makes gold investments while attempting to follow the current price of the metal. As a result, it may be viewed as a way to invest in gold without actually receiving any. At the time of allocation, each Kotak Gold ETF unit will roughly be equivalent to 1 gram of gold.
- NAV: ₹49.77
- Expense Ratio: 0.55%
- AUM: ₹2580.36 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹5000
- Returns:
- 3-Year Returns: 11.50%
- 5-Year Returns: 12.90%
6. HDFC Gold Exchange Traded Fund
HDFC Gold Exchange Traded Fund is one of the best Gold ETFs launched and managed by HDFC Asset Management Company Limited. This product is appropriate for investors looking for long-term gains that are in line with the performance of gold and who invest primarily in 0.995 fine gold bullion.
- NAV: ₹50.29
- Expense Ratio: 0.59%
- AUM: ₹3353.55 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹5000
- Returns:
- 3-Year Returns: 11.00%
- 5-Year Returns: 12.40%
7. UTI Gold Exchange Traded Fund
UTI Gold Exchange Traded Fund is managed by UTI Asset Management Co Ltd. Investors who want returns before scheme costs, who closely monitor the performance and yield of gold, and who invest primarily in gold and gold-related securities might consider this product.
- NAV: ₹49.68
- Expense Ratio: 1.13%
- AUM: ₹817.90 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹20000
- Returns:
- 3-Year Returns: 11.1%
- 5-Year Returns: 12.6%
8. Aditya Birla Sun Life Gold ETF
Aditya Birla Sun Life Gold ETF was launched by Aditya Birla Sun Life Mutual Fund. This fund invests in physical gold and aims to provide returns close to the price of gold. This product is appropriate for investors seeking long-term gains consistent with gold’s performance and investments in 99.5% pure physical gold (fineness).
- NAV: ₹52.38
- Expense Ratio: 0.54%
- AUM: ₹355.56 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹5000
- Returns:
- 3-Year Returns: 11.6%
- 5-Year Returns: 12.9%
9. SBI ETF Gold
SBI ETF Gold is one of the best gold ETFs, it is an open-ended gold commodity scheme belonging to SBI Mutual Fund House. This product is appropriate for investors seeking long-term capital appreciation and investment in Gold, gold bullion and gold related securities.
- NAV: ₹51.08
- Expense Ratio: 0.64%
- AUM: ₹2824.08 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹5000
- Returns:
- 3-Year Returns: 11.6%
- 5-Year Returns: 12.9%
10. Quantum Gold Fund
Quantum Gold Fund is managed by Quantum Asset Management Co Pvt. Ltd. This product is appropriate for investors seeking long term returns with investment in physical gold.
- NAV: ₹49.39
- Expense Ratio: 0.78%
- AUM: ₹154.60 Cr
- Risk: High Risk
- Min Lump Sum Investment: ₹500
- Returns:
- 3-Year Returns: 11.4%
- 5-Year Returns: 12.7%
Note: All the values mentioned are valid as of January 31st, 2023
Disclaimer: Mutual fund investments are subject to market risk, read all scheme related documents carefully.
How do Gold ETFs Work?
Gold ETFs track the price of physical gold and allow investors to earn profit without buying physical gold. These serve as a hedger against unprecedented market volatility and increasing inflation. Moreover, investors prefer investing in gold exchange-traded funds (ETFs) and gold mutual funds to diversify their portfolios.
Investors may deal with gold price fluctuations daily or even hourly. Despite the fluctuating price of gold in the national and international market, investors still regard gold as a safer asset than most bonds and stocks.
Example:
The fund provider creates a fund to follow the performance of the underlying assets, owns those assets, and then offers shares of that fund to investors. An ETF’s underlying assets are not owned by shareholders; rather, they own a portion of the fund.
Benefits of Investing in Gold ETFs
Here are the benefits of investing in gold ETFs:
1. Ease of Storage and Access
Unlike gold in its physical form, gold ETFs are stored in demat accounts. This gives investors the ability to access and store as and when required. Gold ETFs are like equity shares which can be exchanged.
2. Convenience
Gold ETF accumulation is easier since it takes into account each unit of ETF like a share. Thus investors can get their desired number of units at very low costs and devoid of making charges.
3. Tax-efficient
Returns from gold ETFs are in the form of short-term or long-term capital gains. While long-term gains are taxed at 20% (with indexation benefits), short-term gains accumulate to your income and are taxed according to the tax slab rates.
How to Choose the Best Gold ETF?
Keep the following points in mind before choosing to invest in a gold ETF:
1. Fund Performance
Though a fund’s historical performance shouldn’t be considered as a yardstick while making investment decisions, checking the historical data can give you an idea regarding the fund’s stability and potential. Experts believe a minimum of 3 years’ data of the average returns should be consulted.
2. Liquidity
Asset liquidity is directly proportional to trading activity. Thus, you need to choose ETFs based on their trade volumes. While some may not experience many fluctuations, others may undergo hourly spikes or drops in price.
3. Tracking Error
Tracking the underlying index is essential before considering an ETF to trade with. Any discrepancy between the fund’s net asset value and the actual value of gold is a tracking error. These errors imply additional fund management charges and other transaction costs. Always choose ETFs with minimum tracking errors.
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How to Invest in Best Gold ETFs?
- Create a demat account, trading account, or an online account for trading stocks in order to invest in gold ETFs.
- It only takes a few minutes to choose a Gold ETF and make your order online through your broker’s trading interface once your account is set up.
- The orders are forwarded to the exchange, where the buy and sell orders are matched, executed, and a confirmation is issued back to you.
- The documents listed below are necessary to open a demat and trading account.
- PAN card (Mandatory)
- Proof of identity
- Evidence of your address
Who Should Invest in Gold ETFs?
Given below are the details of the people who would want to invest in the best gold ETFs:
- Investors who wish to diversify their portfolio.
- Risk-averse investors looking to earn profits on their investments.
- Investors who don’t wish to spend extra money for storing physical gold.
Taxation on Best Gold ETF
In line with other gold investment avenues, gold ETFs and Fund of Funds are currently taxed on capital gains: short-term capital gains are taxed at a marginal rate for holding periods up to three years, and long-term capital gains are taxed at a rate of 20% with an indexation benefit for holding periods longer than three years.
Final Word
Investing in gold ETFs eliminates the hassles of gold storage, helping investors save on storage fees. Investors can also convert their gold ETF into physical gold provided the minimum number units are worth one kg of gold. Additionally, just like any other investments, you need to assess their risk profile and investment goals to make an informed investment decision. These 10 best gold etfs 2023 are worth taking the initial step with. Gold ETFs are a good way to invest in gold without physically owning it. You can also start investing in Navi Mutual Fund. Just download the Navi app, explore a host of mutual funds across sectors and geographies and start investing today!
FAQs
Unlike the non-uniform price of gold, prices of gold ETFs are uniform throughout the country.
Gold ETFs that hold gold in their physical former gold future contracts are ineligible for dividends. However, dividends are available for equity-based gold ETFs.
Gold ETFs do not come with a lock-in period.
Gold ETFs are a perfect alternative to physical gold as these funds are backed by gold with a purity of 99.5%. That said, the purity of physical gold may or may not be that high. Also, note that no wealth tax is applicable on gold ETFs.
Yes, you can, if you keep gold equivalent to 1 kg in ETFs or multiples thereof.
Yes, you need to pay brokerage for gold ETFs.
To invest in exchange-traded funds, you need to open a DEMAT account with a stockbroker.
1. Axis Gold ETF
2. IDBI Gold Exchange Traded Fund
3. Invesco India Gold ETF
4. ICICI Prudential Gold ETF
5. Kotak Gold ETF
Gold ETFs are the best option for investors who want to invest in gold but do not want to do so in real gold owing to storage issues or uncertainty about the purity of the metal and also want to benefit from tax advantages. Investors stand to save money if they make a sizable investment because there is no premium or making fee.
Gold ETFs are subject to market risks impacting the price of gold and they can be highly volatile in nature.
You can either buy or sell it all at once or regularly with systematic SIPs.
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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
