Synopsis- This article will tell you about gold ETFs, talk about why gold has done well in the recent past, show you which are the best-performing gold ETFs in India this last year, and state some of the practical points that investors need to know.
Why to Invest in Gold ETFs
- Diversification: Gold is an inflation and economic uncertainty hedge. Its price is normally not perfectly correlated with stocks and bonds, thus providing good portfolio diversification.
- Liquidity: When compared to a physical form of gold, it is traded continuously on stock exchanges and can be easily purchased and sold at market prices.
- Purity and Storage: Investors do not need to worry about the purity of gold or safe keeping of it; this will be taken care of by the fund house as the physical gold is kept at 99.5 purity.
- Cost-effectiveness: Gold ETFs are less expensive to buy and sell normally as compared to buying and selling physical gold, which may come in the form of premiums or making charges.
India’s Top Returning Gold ETFs in Last 1 Year
The performance of the past does not depict that of the future; however, the best performers in the recent past have a clue. Some of the Indian gold ETFs trailed the increase in the domestic gold prices very closely over the past few years. According to the recent information, the following are the 7 best:
1. Invesco India Gold ETF: This ETF has shown a strong 31.85% return over the last year. It aims to provide returns that correspond to the performance of physical gold, making it a direct and efficient way to gain gold exposure. Its expense ratio stands at 0.55%.
2. LIC Gold ETF: Delivering a robust 31.64% return in the past year, LIC Gold ETF is a notable performer. It seeks to mirror the returns of physical gold and is managed by a well-known institution, featuring a competitive expense ratio of 0.41%.
3. UTI Gold Exchange Traded Fund: With a solid 1-year return of 31.57%, UTI Gold ETF consistently aims to track the domestic price of gold. Its established presence and an expense ratio of 0.48% highlight its efficiency in tracking the underlying asset.
4. Mirae Asset Gold ETF: This ETF has delivered a strong 31.55% return over the last year. Mirae Asset is known for its well-managed passive funds, and their Gold ETF aligns with this reputation, offering a low expense ratio of 0.31%.
5. Axis Gold ETF: This ETF has also shown competitive returns, with a 31.42% return over the past year. It provides investors with a convenient and regulated way to invest in gold, backed by the Axis fund house, with an expense ratio of 0.49%.
6. ICICI Prudential Gold ETF: As one of the largest gold ETFs by assets under management (AUM), ICICI Prudential’s offering has delivered a 31.41% return over the last year. It provides high liquidity and robust tracking of gold prices, with an expense ratio of 0.50%
Here’s a Tabular format for Better Understanding and Comparison
| Sr.No | Name | LTP (NAV) | 1-Year Returns | Expense Ratio |
| 1 | Invesco India Gold ETF | 8,609.80 | 31.85% | 0.55% |
| 2 | LIC Gold ETF | 8,910.00 | 31.64% | 0.41% |
| 3 | UTI Gold ETF | 82.8 | 31.57% | 0.48% |
| 4 | Mirae Asset Gold ETF | 95.9 | 31.55% | 0.31% |
| 5 | Quantum Gold Fund ETF | 81.62 | 31.41% | 0.78% |
| 6 | Axis Gold ETF | 82.4 | 31.40% | 0.54% |
(This Data is taken from NSE website, dated as on 13 July 2025.)
Also read: Top 10 Best Performing Mutual Funds with Highest Returns in Last 10 Years – Do You Own Any?
Factors for Consideration by Gold ETF Investors
- Expense Ratio: The charge that is levied by the fund house on a yearly basis. The lesser the ratios, the better the net returns.
- Tracking Error: It determines the degree to which the performance of the ETF follows the price of actual gold. Little error shows efficient replication.
- Liquidity: This is the ability of an ETF to be traded in without affecting the price.
- Taxation: All capital gains are taxed as short-term capital gains (STCG) in the case of gold ETFs bought on or after April 1, 2023. Profits get included in your total income and charged at your income tax slab. In GST, one does not pay the value of investment but the ratio of expense.
Should Your Portfolio Invest in a Gold ETF?
Gold ETFs can play a useful role in a well-diversified portfolio, certainly for those individuals who have a notion that gold is a safe haven or inflation hedge. To the new investor, they present the ease of investment in gold without the hassles of ownership, since it is entirely free of any physical representations. It is generally recommended to invest 5-10 percent of a portfolio in gold. This will help absorb your portfolio in case of a sudden fall of the market or high inflation. Gold is not usually a short-term trading resource but a long-term strategic resource.
Conclusion
Gold ETFs provide an accessible way to diversify your portfolio and take positions in gold itself because it has become a modern way of investing. With the help of the proposed analysis of how these funds work, what contributes to the price fluctuations of gold, and its practical characteristics, such as the expense ratio or taxation, it is possible to make a decision. Gold has maintained its popularity as a stronghold asset, and this is evidenced by the recent high performance demonstrated by top gold ETF returns. Gold ETFs offer a highly liquid and safe investment opportunity to new investors to exploit the power of gold, thus securing a better and stronger financial future.
Written by Hiten Chauhan
