Gold ETFs Meaning and its significance in 2025

Q: Is it safe to invest in Gullak Gold+?

Here's how Gullak ensures 100% safety of your investments: 1. All the gold you purchase on Gullak is sourced, stored, and managed by Augmont, one of India’s biggest gold refineries. Augmont is NABL and BIS accredited and follows the India Good Delivery standard across platforms like NSE, BSE, and MCX. 2. Gullak guarantees 100% collateral protection for your investments, ensuring maximum security.

Q: What is the disadvantage of gold ETF?

Below are the disadvantages of Gold ETFs: 1. Lack of extra returns you could get from gold assets like Gullak Gold+ 2. Withdrawal is limited to only cash. 3. Expense ratio on your investments

Q: Which gold ETFs are best?

Best Gold ETFs: 1. Axis Gold ETF(1yr- 38.43%) 2. Aditya BSL Gold ETF(1yr- 37.95%) 3. HDFC Gold ETF(1 yr- 37.5%) 4. SBI Gold ETF(1yr- 36%) 5. Kotak Gold ETF(1yr- 34.64%)

By Team Gullak

Last updated : Aug 20, 2025

4 min read

What is Gold ETF?

Gold ETFs is an Exchange Traded Fund that tracks the live gold rate. Gold ETFs are passively managed funds that invest in the gold bullion of 99.5% purity. One unit of gold ETF refers to 1 gm of gold. When investing in Gold ETFs, you get the benefit of gold price appreciation(~11% pa) while not having to worry about physical gold’s drawbacks like storage issues and high making charges. Gold ETFs are one of the most popular ways of investing gold among stock market investors. In this article, we will understand gold ETF meaning, compare the best gold ETFs available and look for newer ways of investing in gold.

How do Gold ETFs work?

Here's what happens when you buy Gold ETFs:

For every Gold ETF unit you buy, the fund manager holds equivalent physical gold in secure vaults, to ensure that the value of your investments track the price of physical gold
The Net Asset Value (NAV) of a Gold ETF changes with the price of gold. It reflects real-time gold market movements, minus expense ratio (typically ~0.5% or less).
Investors get exposure to gold without having to worry about storage, insurance, or purity checks.

Why can't you redeem physical Gold when investing in Gold ETFs?

While the fund managers allocate physical gold when you are buying Gold ETFs, here's why you can't redeem it as physical gold:

Gold Is Held by the Fund, Not Allocated to Individuals.
Redeeming physical gold for lakhs of investors means managing purity, denominations (1gm, 5gm, 10gm), secure delivery, insurance, etc. This can get expensive for the fund as well as the investor
The entire existence of Gold ETFs is based on getting the benefit of gold price increase without buying physical gold. If your gold is to redeem as physical gold, you can look at alternate gold assets like digital gold which has more flexibility.

Best Gold ETFs in India

Now that we have an understanding of what Gold ETFs mean, let us take a look at the Best Gold ETFs in India. As of today, there are 17 gold ETFs in India. In this section, we will discuss the most renowned Gold ETFs

Axis Gold ETF as one of the best Gold ETFs

The Axis Gold ETF was launched in 2010. Between 2010 to 2025, the fund has grown from ~₹20 to ₹85, giving an average return of 10.89%pa.

Last 1 year returns: 38.43%

5 year total returns: 76.87%

All time returns: 323.6%

Expense Ratio: 0.55%

Liquidity: High

AUM: ₹1,955Cr

Want Higher returns than Gold ETFs?

Invest in Gullak Gold+

Aditya BSL Gold ETF as one of the best Gold ETFs

The Aditya BSL Gold ETF was launched in 2011. Between 2011 to 2025, the fund has grown from ₹22 to ₹92, giving an average return of 10.76%pa.

Last 1 year returns: 37.95%

5 year return: 76.75%

Expense Ratio: 0.54%

Liquidity: High

AUM: ₹1,170Cr

HDFC Gold Exchange Traded Fund as one of the Best Gold ETFs

The HDFC Gold Exchange Traded Fund was launched in 2023. Between 2014 to 2025, the fund has grown from ₹52 to ₹84, giving an average return of 27% pa.

Last 1 year returns: 37.5%

5 year return: NA

Expense Ratio: 0.59%

Liquidity: High

AUM: ₹10,691Cr

SBI Gold ETF as one of the Best Gold ETFs

The HDFC Gold Exchange Traded Fund was launched in 2009. Between 2009 to 2025, the fund has grown from ₹15 to ₹85, giving an average return of 11.45%pa.

Last 1 year returns: 36%

5 year return: 74.98%

Expense Ratio: 0.65%

Liquidity: High

AUM: ₹8,811Cr

Kotak Gold ETF

The Kotak Gold ETF was launched in 2007. Between 2007 to 2025, the fund has grown from ₹9 to ₹84, giving an average return of 13.21%pa.

Last 1 year returns: 34.64%

5 year return: 75.39%

Expense Ratio: 0.55%

Liquidity: High

AUM: ₹7,842Cr

Here's a table to compare all these Gold ETFs against each other.

Factor	Axis Gold ETF	Aditya BSL	HDFC Gold ETF	SBI Gold ETF	Kotak Gold ETF
Average returns	10.89%	10.76%	27%	11.45%	13.21%
Expense Ratio	0.55	0.54	0.59	0.65	0.55
AUM	₹1,955Cr	₹1,170Cr	₹10,691Cr	₹8,811Cr	₹7,842Cr

What to look for when buying Gold ETFs?

Experts recommend evaluating expense ratio, tracking error, and liquidity when choosing a Gold ETF. While larger funds often benefit from lower tracking errors, they may also come with higher expense ratios — making it essential to weigh costs against performance efficiency.

How to buy Gold ETF?

Here's a step-by-step guide on how to invest in gold in share market:

Download any brokerage app.
Open and account.
If you don't have a Demat account, open one on the app using your PAN. It generally takes upto 24 hrs for the verification process once you've filled in the details.
Once the verification process is done, search for any of the Gold ETFs
Select how many units you want to purchase.
Recharge your brokerage app's wallet based on the total amount to be paid & complete your purchase.

Once you have a Demat account, it doesn't take more than a couple of minutes to invest in the Gold stock market

Gold fund vs Gold ETFs

Let's understand the difference between Gold fund & Gold ETFs with the table below:

Criteria	Gold fund	Gold ETFs
Backed By	Mix of underlying Gold ETFs	Physical gold (99.5% purity)
Mode	NAV-based pricing, one per day	Intraday trading on stock exchanges (like shares)
Liquidity	Moderate – processed on T+1/T+2 basis	High – can be bought/sold anytime during market hours
Expense Ratio	~1.0% – 2.0% (includes Gold ETF + fund expenses)	~0.34% – 0.80% (e.g., Nippon Gold BeES ~0.80%, UTI Gold ETF ~0.48%)
Entry/Exit Load	May have exit load (especially if redeemed within 1 year)	None (brokerage may apply)

How are Gold ETFs taxed?

As of 2025, Gold ETFs are taxed based on LTCG of 12.5% when the holding period is 12 months+.

If Holding period is less than 12 months, they are taxed as per STCG of 20%.

Gold ETF Alternative: A way to Earn Extra 5% on top of Gold’s returns

While on an average, Gold ETFs give an annual return of 11%pa, there’s a way with which you can earn an extra 5% on top gold’s annual returns. This is possible with Gullak Gold+, the only place where your gold quantity grows by 5% pa. Let’s understand this with the help of an example:

Say you invest 100 gms in Gullak Gold+. With the extra 5% gold, in one year this will become 105 gms and in 8 years this will become 148 gms. All of this 148 gms will benefit from gold price increase as well.

Considering Gold prices increase by 11% in a year, with the extra 5% on Gullak Gold+, you will have 16% returns on your investments. In the last 1 year, gold prices have increased by ~28%. With Gullak Gold+, the annual return would have become 33%. You can invest in Gold+ by using the Gullak app. There are no lock-in periods and you can withdraw your money as cash or order gold coins or even redeem jewellery at Gullak’s partner stores like CaratLane by Tanishq or Kalyan.

You can use the calculator below compare your returns with both assets, Gold ETFs and Gold Mutual Funds vs Gullak Gold+:

Compare Gold Mutual Funds vs Gullak Gold+

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Get the Highest returns on Gold

Invest in Gullak Gold+

Here, we can clearly see that Gullak Gold+ clearly outperforms the returns of even the best gold ETFs.

Is buying a gold ETF a good idea?

Gold ETFs are an excellent way of benefitting from Gold price increase without actually owning the asset. However, with Gullak Gold+, you not only get all the benefits that Gold ETFs come with but your gold quantity also increases by 5% every year. Even while withdrawing, you get the flexibility of getting your investments as either cash or gold.

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