Best Gold ETFs in India for April 2025: HDFC Gold ETF, ICICI Pru Gold ETT, and More Based on 5Y CAGR

Investing in gold has always been a hedge for investors as it has been considered a safer bet traditionally due to its increasing prices over the years. In the realm of gold investing, there are many ways to invest in gold, such as gold bonds, gold mutual funds, gold ETFs, physical gold and more. In this read, we will explore the Best Gold ETFs in India for April 2025 based on 5Y CAGR.

A Gold ETF is an exchange-traded fund that seeks to mirror the price of domestic physical gold. These are passive investment vehicles tied to gold prices and typically invest in gold bullion. Listed and traded on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange Ltd. (BSE), Gold ETFs function similarly to company stocks. They are traded on the cash segment of both BSE and NSE, allowing for continuous buying and selling at market prices.

Best Gold ETFs in India for April 2025

Note: The Gold ETFs mentioned above have been selected and sorted based on 5Y CAGR as of April 3, 2025

Overview of the Best Gold ETFs in India

1. HDFC Gold Exchange Traded Fund

The HDFC Gold ETF is an exchange-traded fund designed to mirror the performance of gold. It offers investors a simple and affordable way to invest in gold through digital means.

Key Metrics

• Alpha: 9.87
• NAV: ₹78.22

2. ICICI Prudential Gold ETF

ICICI Prudential Gold ETF aims to provide investment returns that track the performance of domestic prices of Gold derived from the LBMA AM fixing prices.

Key Metrics

• Alpha: 10.04
• NAV: ₹78.03

3. Nippon India ETF Gold BeES

Nippon India ETF Gold BeES is an ended scheme, listed on the Exchange in the form of an Exchange Traded Fund (ETF) investing in physical gold.

Key Metrics

• Alpha: 9.52
• NAV: ₹76.05

4. SBI Gold ETF

SBI Gold ETF invests in gold and gold-related instruments, and the objective of the scheme is to track the price of gold.

Key Metrics

• Alpha: 9.91
• NAV: ₹78.15

5. Kotak Gold ETF

Kotak Gold ETF is an open-ended gold exchange-traded fund which invests in physical gold and endeavors to track the domestic spot price of gold as closely as possible.

Key Metrics

• Alpha: 10.41
• NAV: ₹76.39

Benefits of Investing in Gold ETFs

• Diversification: Gold has historically been a haven asset. It often performs well during times of market volatility or inflation. Investing in Gold ETFs can help diversify your portfolio, balancing risk and potentially boosting long-term returns.

• Liquidity: Gold ETFs are traded on stock exchanges just like regular stocks, making them highly liquid. You can buy or sell your investment during market hours, which offers flexibility and convenience.

• No Physical Storage Hassles: When you buy physical gold, you need a safe and secure place to store it, which can be costly. Gold ETFs eliminate the need for physical storage, as the gold is held by the ETF issuer in a secure vault.

• Lower Costs: Gold ETFs typically have lower transaction costs compared to buying and selling physical gold, as there are no premiums or VAT (in most jurisdictions) associated with purchasing physical gold.

Factors to Consider Before Investing in Gold ETFs:

• Expense Ratio: Gold ETFs usually charge an annual management fee, which is the “expense ratio.” While these fees are generally low compared to other types of funds, it’s still essential to compare the expense ratios of different Gold ETFs.

• Underlying Assets: Some Gold ETFs are backed by physical gold stored in vaults, while others may be backed by gold futures contracts. The type of asset backing the ETF can affect its risk and performance. Make sure you understand how the ETF is structured.

• Market Risk: Like any other asset class, the value of gold ETFs is subject to market risks. Gold prices can be volatile due to factors like changes in interest rates, geopolitical instability, or currency fluctuations. Gold ETFs are not immune to these risks.

Conclusion

Gold ETFs can be a convenient and cost-effective way to gain exposure to gold. However, like any investment, it’s important to understand the potential risks, such as market volatility, liquidity, and tracking errors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.