Synopsis: This article compares SBI Gold Direct Plan Growth & HDFC Gold ETF Fund of Fund Direct Plan Growth. The aim is to help the readers understand and choose the best Gold mutual Fund depending on their circumstances.
Gold has made a stunning revival as one of the best-performing investment classes, with impressive returns that have outshone many of the equity indices. Over the past three years, the Indian domestic price of gold has risen more than 40% (CAGR) on the back of a combination of tailwinds in global macroeconomic factors like inflation, geopolitical risk, and central bank purchases. In this market environment, gold is not simply an asset class that protects investments but one that generates gains in its own right. The other equally important development that has transformed the Indian investment landscape in recent times is the shift in how people can invest in gold. From being the preserve of physical gold ownership and hoarding, where investors are exposed to high making charges, storage expenses, and issues relating to purity, investors are now able to invest in paper gold through Gold Exchange-Traded Funds (ETFs) and Fund of Funds (FoFs). Some of the popular options for investors looking to invest in paper gold include the SBI Gold Direct Plan Growth and the HDFC Gold ETF Fund of Fund Direct Plan Growth.
SBI Gold Direct Plan Growth
Managed by SBI Mutual Fund (the country’s biggest asset management company in terms of AUM), SBI Gold Direct Plan Growth Scheme is a Fund of Fund scheme that allocates around 99.6% of its portfolio to SBI Gold ETF while the rest to TREPS (Money Market Instruments). Launched in January 2013, this scheme is being managed by PK Pradeep Kesavan, who boasts experience of working with Morgan Stanley and Elara Capital. The massive size of the fund (close to ₹15,000 Cr in AUM) indicates strong investor faith.
Key Performance Metrics
Also Read: Muthoot vs Manappuram vs SBI: Which Offers the Best Gold Loan in 2026?
HDFC Gold ETF Fund of Fund Direct Plan Growth
The HDFC Gold ETF FoF is the equivalent of the SBI Gold Fund from HDFC Mutual Fund, an institution that enjoys immense trust among investors in India. The scheme invests almost all its money in the HDFC Gold ETF, which is handled by Arun Agarwal and Nandita Menezes. Like SBI, the HDFC Gold ETF FoF was introduced in January 2013. However, it stands out through its easy availability, which requires a minimum SIP of ₹100 and a minimum lumpsum of ₹100, making it the easiest gold investment instrument available in India. With AUM worth around ₹11,766 Cr, it has significant liquidity.
Key Performance Metrics
Head to Head Comparison
The key takeaway here is that the SBI scheme excels in terms of return (3-year and 5-year) compared to HDFC. The ranking in its respective category and higher AUM for the SBI scheme indicate higher institutional support as well. However, it is important to note that the lower expense ratio of the HDFC scheme will make a significant difference in long-term investing. Over 10 years, the difference in expense ratio would add up. Neither of these schemes intends to outperform gold, both succeed in tracking it efficiently.
Conclusion
The SBI Gold Direct Plan Growth, as well as the HDFC Gold ETF FoF Direct Plan Growth, is a great tool for investing in gold. If we talk about the performance-focused individual, the better 3Y and 5Y returns of SBI, as well as its greater scale, become significant factors, even if the expense ratio is slightly more than that of HDFC. On the other hand, if we discuss a cost-sensitive person or someone with a low initial amount of money, the low expense ratio of HDFC, as well as the minimum of ₹100 required to enter, becomes a key factor. Finally, when considering the two investments with identical underlying assets, one can argue that the differences are slight. It will be good if investors consider their time horizon, available capital, and other factors while deciding on an option.
Written by Shrikara
