How to Invest in Gold ETFs in India
How to Invest in Gold ETFs in India (2025): A Complete Beginner's Guide
Gold has historically been one of India's most loved investment options. Traditionally purchased as jewelry or coins, today's investors are increasingly turning to a more modern and secure alternative — Gold Exchange Traded Funds (ETFs). In 2025, Gold ETFs are gaining popularity for being tax-efficient, liquid, and reliable.
In this guide by CMAknowledge.in, we cover everything you need to know about investing in Gold ETFs in India: what they are, how to buy them, pros and cons, 10-year return history, expert outlook, and smart investor tips. Official links and real fund examples are included to make your decision easier.
What is a Gold ETF?
A Gold ETF is a type of mutual fund listed on stock exchanges that invests primarily in physical gold of 99.5% purity or more. Each unit of a Gold ETF usually represents 1 gram of gold. Investors can trade these units like stocks through a Demat account.
Gold ETFs are regulated by the Securities and Exchange Board of India (SEBI) and offer a transparent way to gain exposure to gold prices without dealing with storage, theft, or purity issues.
How to Invest in Gold ETFs in India
- Open a Demat and Trading Account: You can open one with SEBI-registered brokers like Zerodha, Groww, Upstox, etc.
- Choose a Gold ETF: Pick a fund based on expense ratio, performance, and fund house reputation.
- Search & Place Order: Look for the ETF symbol on your broker’s app and place a buy order. For example, SBI Gold ETF (symbol: SBIGETS).
- Track & Exit: You can sell it any time like a stock or hold long-term for capital gains.
Top Gold ETFs in India (2025)
| ETF Name | Fund House | Expense Ratio | 1-Year Return | Link |
|---|---|---|---|---|
| Nippon India Gold ETF | Nippon Mutual Fund | 0.39% | 14.5% | Visit |
| SBI Gold ETF | SBI Mutual Fund | 0.58% | 14.4% | Visit |
| HDFC Gold ETF | HDFC Mutual Fund | 0.44% | 14.3% | Visit |
| Kotak Gold ETF | Kotak Mutual Fund | 0.51% | 14.1% | Visit |
Advantages of Investing in Gold ETFs
- Safety: No risk of theft or damage as they are held digitally.
- High Liquidity: Can be traded anytime during market hours.
- Low Expense Ratio: Compared to physical gold storage or jewelry making charges.
- Tax Efficient: Long-term gains eligible for indexation benefits.
- Transparent Pricing: Reflects current domestic gold price.
Disadvantages of Gold ETFs
- Cannot be converted to physical gold directly (unlike sovereign gold bonds).
- Requires Demat and trading account.
- Subject to tracking error and fund manager efficiency.
- Brokerage charges may apply on buying/selling.
Gold Price Trend: Last 10-Year Performance (2015–2025)
| Year | Avg. Price (₹/10g) | Annual Return |
|---|---|---|
| 2015 | ₹26,343 | -6.1% |
| 2016 | ₹28,623 | +8.7% |
| 2017 | ₹29,667 | +3.6% |
| 2018 | ₹31,438 | +6.0% |
| 2019 | ₹35,220 | +12.0% |
| 2020 | ₹48,651 | +38.1% |
| 2021 | ₹47,924 | -1.5% |
| 2022 | ₹52,056 | +8.6% |
| 2023 | ₹59,200 | +13.7% |
| 2024 | ₹64,280 | +8.5% |
| 2025 (Est.) | ₹68,000 | +5.8% |
Future Outlook: Is 2025 a Good Time to Invest?
Experts predict a steady demand for gold in India over the next 5 years. Geopolitical tensions, inflation hedging, and the weakening of the dollar all make gold a valuable hedge. Gold ETFs will likely gain traction as investors seek safer and regulated investment routes.
RBI and other global central banks continue to increase their gold reserves, indicating long-term confidence in gold’s value. Overall, gold ETFs are seen as a low-risk, high-credibility asset class for wealth preservation.
Investor Tips for 2025
- Use SIP (Systematic Investment Plan) mode to average your investment cost.
- Compare different fund houses' tracking accuracy and expense ratios.
- Avoid frequent trading — consider a long-term horizon (3+ years).
- Use ETFs to diversify your portfolio, not to replace all other assets. \n
- Limit allocation to 10–15% of your total investments.
Conclusion
Gold ETFs provide a modern, tax-efficient, and convenient way to invest in gold in India. Whether you are a first-time investor or an experienced one, adding Gold ETFs to your portfolio can help you protect and grow your wealth in uncertain times.
Stay informed and visit CMAknowledge.in regularly for practical investment guides, financial planning, and CMA student updates.
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