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 | 07 – March 2008 |
| 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 |
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plz send me deliy update etf fund informetion
You can track NAVs of ETFs or mutual funds using sites like Moneycontrol. Here is a link that shows you how to do it:
http://www.onemint.com/2009/09/11/track-mutual-fund-navs-with-moneycontrol/
How to choose the best fund out of all these gold ETFs?
Are they all same?
All these physically buy gold and keep so that is one thing that is common in them. They charge you fee which is called “Expense Ratio”. The higher the expense ratio the more fee they charge. So that should be a factor to consider while buying.
Hi Manshu
1. Is the expense ratio only criteria for buying?
2. Is it possible to buy/sell these ETFs from ICICI direct?
Thanks for your anwer in advance
Anand
1. Expense ratio is one biggie, volumes are another. You don’t want to buy in something that is thinly traded. I think tracking error is also important which means how close are the NAVs and actual price of the ETF.
2. Yes, it is possible to do so. You can do it from the Stocks tab.
Dear Manshu,
Can u elaborate the detailed procedure of trading Gold ETF through ICICI direct.
Hey Manshu,
I dint understand what do you mean by Thinly traded?
Regarding Tracking error, where is that cited? Do ETFs mention that somewhere?
Thanks
Anand
Hey Anand,
By thinly traded I meant ETFs that do not have much trading volumes. You can find out trading volumes by going to nseindia.com, entering a ETF code, and pulling up information about it. You can compare a few ETFs of the same category to see what each one looks like.
Tracking error is generally given in the Statement of Additional Information (SAI) or prospectus. You can compare them to see how each fares.
Thank you Manshu..
Now you can add Religlare gold ETF in this list and make it seven
I shall do that, thanks!
hey manshu,
will u please tell me in which gold etf i should invest now.
this is a stupid question when u already answered it that expense ratio must be considered.
but i m still confused because the expense ratio of all the Gold etf are same i.e., 2.5%.
thats why i m confused.
looking forward for your reply.
GBU.
It is a good question, and slightly difficult one too.
You can see that the expense ratio of Benchmark are the lowest. I have not done an exercise to take the value of all gold ETFs and compare their returns for the past couple of years, but this will be a good thing to do. It will show you how much expenses are eating up returns. Liquidity or volume is another factor.
I don’t make recommendations on this blog because I am not a professional qualified to do so, but these will be the factors I would look at.
Dear Manshu,
You said you are not pro. but believe me the info provided by you is not less than any pro.
Do you think any security issue should also be considered before investing in ETFs. Will you rate SBI ETF better than Benchmark on this count?
Thanks in Advance.
That’s a good question, and I will consider that factor in most cases, though probably not very high in the list because they are supposed to hold physical assets with them, and it is not structured as an ETN, where this factor probably becomes the number 1 factor. \
Also, Benchmark is doing great volumes so that should bring some confidence as well. Here is a post comparing the volumes:
http://www.onemint.com/2010/04/19/which-is-the-best-gold-etf-in-india/
It’s the same as buying any other stock. Have you bought a stock there?
After reading info provided by you I went little further and I came to know that all these ETFs have to maintain strict backup of physical gold with them. One ETF is more or less equivalent to one gram of gold. variation in there prices is due to difference in their service charges. In that sense you were very correct when you advised to purchase an ETF which have the least Service Charges. In case of ETFs particularly Security is not a big issue. As you correctly said earlier that our selection of ETF should be based on the quantum of dealings and the services charges they charged.
Pl. share in case you found any new facts in this concern.
Thanks
I really didn’t find anything new, but did a small bit of research comparing the past two year returns on gold ETFs, an the numbers show that the company with the least expenses has the highest returns.
http://www.onemint.com/2010/06/26/2-year-returns-of-existing-gold-etfs/