Gold ETFs Meaning and Everything you need to know

By Team Gullak

Oct 22, 2024

4 min read

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.

Gold ETF meaning

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.

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 top 5 among these based on returns:

Axis Gold ETF as one of the best Gold ETFs

The Axis Gold ETF was launched in 2010. Between 2014 to 2024, the fund has grown from ₹25 to ₹66, giving an average return of 10.19%pa.

Last 1 year returns: 27.87%

10 year average return: 10.19%

Expense Ratio: 0.55%

Liquidity: High

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 2014 to 2024, the fund has grown from ₹26 to ₹69, giving an average return of 10.25%pa.

Last 1 year returns: 28.57%

10 year average return: 10.25%

Expense Ratio: 0.54%

Liquidity: High

ICICI Prudential Gold Exchange Traded Fund as one of the Best Gold ETFs

The ICICI Prudential Gold Exchange Traded Fund was launched in 2010. Between 2014 to 2024, the fund has grown from ₹25 to ₹67, giving an average return of 10.36%pa.

Last 1 year returns: 28.08%

10 year average return: 10.36%

Expense Ratio: 0.50%

Liquidity: High

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

The HDFC Gold Exchange Traded Fund was launched in 2010. Between 2014 to 2024, the fund has grown from ₹25 to ₹67, giving an average return of 10.36%pa.

Last 1 year returns: 28.08%

10 year average return: 10.36%

Expense Ratio: 0.59%

Liquidity: High

SBI Gold ETF as one of the Best Gold ETFs

The HDFC Gold Exchange Traded Fund was launched in 2009. Between 2014 to 2024, the fund has grown from ₹25 to ₹67, giving an average return of 10.36%pa.

Last 1 year returns: 27.71%

10 year average return: 10.36%

Expense Ratio: 0.65%

Liquidity: High

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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