Gold ETF in India

This post takes a look at the gold ETFs that are available to Indian investors. Right now there are six such gold ETFs in India.

Name Expense Ratio Pricing Per Unit Inception Date
Benchmark Mutual Fund – Gold Benchmark Exchange Traded Scheme 1% Approximately 1 gram of gold 08 – March 2007
UTI Mutual Fund – UTI Gold Exchange Traded Fund 2.5% Approximately 1 gram of gold 3rd Jan 2007
Kotak Mutual Fund – Gold Exchange Traded Fund 2.5% Approximately 1 gram of gold 21st June 2007
Reliance Mutual Fund – Gold Exchange Traded Fund 2.5% Approximately 1 gram of gold 1st November 2007
Quantum Gold Fund – Exchange Traded Fund 1.25% Approximately half a gram of gold 27th February 2008
SBI Mutual Fund – SBI Gold ETF 2.50% Approximately 1 gram of gold 30th March 2009

Update: Corrected inception date of GoldBees. Thanks to Kartik Shah for pointing it out.

75 thoughts on “Gold ETF in India”

  1. Hi Nice articles on gold etf.
    Can you update with recent figures if possible?

    Also recently I found that only UTI gold etf price has come down more than 200 rupees compared to their price a month back when all other Gold ETFs NAV has come down roughly by only 100 rupees

    Do you find something interesting or something to be careful about this one??

    I have many shares of UTI.

    Thanks for your blog posts

  2. hey,, can you please provide me the evolution on gold etf in india, procedure of investing, performance…

  3. Hi Manshu,
    Can you recommend a site/s which can be used to compare performance of GETFs? MC was something which did not impress me much, atleast on GETF comparisons.
    Thanks and Regards,

  4. Manshu,

    Thanks for sharing your knowledge – it has helped me get a very good understanding of gold ETFs.

    Perhaps a basic question – is there an ‘authoritative’ site to track the underlying gold prices used to calculate the NAVs for gold ETFs?

    1. You can look at gold price movement at or even better is it to periodically see how three or four ETFs have moved. They may have different movements on a day or two, but over a month or so the return should smooth out and be very close to each other.

  5. Hi Manshu,

    Somewhere in these posts i read that one unit of ETF’s actual value keeps of diminishing because of Expanse ratio of something as holding period increases.
    lets say i bought a unit now and on 1% expanse ratio my unit after an year will hold .99 unit of Gold and on similar lines, my one unit of ETF will hold .75 unit of gold after 25 years.

    please dont mind if i have got it all wrong.

    1. Hi Sat Prakash – that’s a good question, and what happens is that the price of the ETF gets re-adjusted to the value of the gold it holds periodically, so while initially a unit of ETF is supposed to reflect a gram of gold that’s more of an indicative thing, and if you buy any gold ETF that has been there for a little while – this relationship will not hold true at all.

      The expenses that a fund incurs will be deducted from the returns it makes, and that consequently reduces the gold that one unit represents. Higher the expense – worse this situation will be and this is true for all type of mutual funds or ETFs.

      Now the funds will earn some money from whatever liquid investments they have and also the gains made by the underlying asset, so the relationship between number of years and percentage gold may not be linear.

      So if you buy something today and hold it for 10 years – the returns will be reduced to the extent of the expenses and for that reason you should always look for a lower cost – however it may not always be the case that this relationship is clearly visible in the fund.

      Does that make sense?

  6. Can you please let me know what is “expense ratio ” and which gold etf should i buy on my own risk i can invest 8-10 k monthly

  7. hi,
    Should i go for ETF option or gold bars and coins.what is advisable ?
    also what is the expectable rate of gold in the year 2032?

    1. Hi Ashwini,

      That decisions is really up to you. If you are buying gold coins then just make sure what will be the deduction when you sell them back to the jeweler because in some cases they are charging a lot of money – even 10% or so.

      And I’m fairly sure no one really knows that the expected price in 2032 will be.

      1. similarly go to all gold etf sites & research for actual expense ratio. They are all in range of 1 to 1.25. Say kotak gold ETF has actual ER =1. Same is case with all ETTF u have mentioned.
        What u have mentioned for all 2.5 % are maximum allowed ER by individual & not actual.

        Check following links for actual ER

        So practically at present all ETF are at ER of 1 only SBI has 1.06 to 1.07….

        Please research your data & revert back

        1. This was written in Sep 2009, so some values may have changed. I haven’t looked at it lately, but I think your point merits a re-look. I’ll look at the expense and volume data for every fund again, and publish a new post as well as update this one. Thanks Kishor.

  8. Hi,

    Your site is of immense help for every investor.
    I have one question…If i take out my investment from any Gold ETF by less than an year, even then will i be charged the same annularised Expense ratio or for only the months i remained invested?

    1. Thank you Ravi.

      Yes, you will be charged the expenses, they are annualized but are charged constantly so that shouldn’t be a factor on when you sell the ETF.

  9. Hi,
    Can you please tell me what is expense ratio?
    Is the expense ration % keep changing every year?

  10. Hello Manshu,

    First of all I would like to thank you for providing us such a detailed and correct information. My question is
    1. I want to buy Gold ETF which one is the best?
    2. Should I put all my money in 1 gold ETF or should i buy 2 of them ?


    1. Hi Manpreet – I’d say Benchmark GoldBees is the best option in what you have right now. Also, you can split it up into two if you’re worried about fraud or something, but I don’t see any other reason to split the investment. The performance of all gold ETFs is quite close, and Nova Scotia is their common gold custodian (there are others as well) so I don’t know a good way to diversify that perceived fraud risk, but you could buy two if that makes you more comfortable.

  11. Hi Manshu,

    This blog is really good and it will help to understand the Gold ETF.

    I am also planning to invest in GOLD ETFs. But only after studied well 🙂

    1. Normally what is the Entry Load and Exit Load ?
    2. What is annual recurring cost of maintenance?
    3. How much the Selling Cost?
    4. Is the any Brokerage charge?
    5. What is the yearly tax rate?
    6. Is there any other expenses which will deduct from the NAV?

    1. HI Aji,
      Thanks for your kind words.
      Here are the answers to the best of my knowledge:

      1. ETFs have no entry or exit load.
      2. 1% or higher.
      3. The brokerage that your online broker charges.
      4. Yes, the brokerage will depend on what your broker charges for shares since these are to be treated like shares.
      5. Yearly tax rate is same as debt mutual funds. Can be found here:
      6. No.

  12. Hi Manshu
    Thanks for all the information you have provided. I am a Channel Partner with Angel Broking Ltd in India. I have about 2,220+ clients. After reading your blogs on Gold ETF, i have really learnt a lot on this subject which in a way has helped a lot of my clients also. All the credit goes to you. Just wanted to tell you that. Thanks.

  13. Yes, Systematic Stock Purchase is available for this ETF through ICICI. I am doing it for last 1 year.

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