Best Gold ETFs in India With Expense Ratio

Last Updated on Oct 31, 2024 by Harshit Singh

Gold has always been a go-to investment for those seeking portfolio stability, especially during economic uncertainty. But with the hassles of storing and securing physical gold, more and more investors are turning to Gold ETFs as a smarter and more convenient way to invest in the precious metal. Gold ETFs combine the security of gold with the flexibility of trading on the stock market, offering a perfect balance of liquidity and growth potential. In this article, let’s understand gold ETFs in detail, learn how to find the best gold ETFs in India, find a list of the best gold ETFs in India, and more.

Gold ETF Meaning

Gold Exchange-Traded Funds (ETFs) are financial instruments that keep you ahead regarding the performance of gold and trade on stock exchanges like NSE, similar to shares. In other words, when you buy a gold ETF, you are buying not gold but also a representation of a certain amount of Gold. In this way, you can expose yourself to the price movements of gold without buying physical gold. Gold ETFs can be successful alternatives for investors looking for a hassle-free and cheap way to invest in the yellow metal. With the help of the best gold ETF in India, you can put a layer of stability in your portfolio, as gold is inevitably seen as a safe-haven asset during contentious times.

Features of Gold ETFs

The features of gold ETFs are mentioned below: 

1. Liquidity: Gold ETFs are traded on Exchanges similar to stock trading, i.e. directly invested or divested at the Stock Exchange. So you can easily trade at market prices during trading hours.
2. Transparency: The prices of Gold ETFs are driven by the gold price and you can track these in real time on NSE. This transparency helps you to compare Gold ETFs in India and decide on the one that fits your investment objectives.
3. Cost-Effectiveness: When you invest in Gold ETFs, your expenses are much lower compared to having gold physically in the form of coins or bars since there would be charges on them after buying and then a storage cost for keeping them safely. Investing in Gold through the best gold ETF with a low expense ratio in India, like Nippon Gold ETF, is considered a cost-effective way.
4. Diversification: Adding Gold ETFs can help you diversify your portfolio with an asset that tends to perform well during economic downturns. This may offer a way to shield your actual portfolio against stock market volatility.
5. No Storage Problems: The gold is stored in your Demat account, unlike physical gold, which requires secure storage. This takes away the hassle and risk of storing physical gold.

Best Gold ETFs in India – Updated 2024

Name	Market Cap (Rs. in cr.)	Close Price (Rs.)	Expense Ratio (%)
Zerodha Gold ETF	–	12.70	0.31
Mirae Asset Gold ETF	–	78.40	0.32
Edelweiss Gold ETF	–	81.05	0.35
Tata Gold Exchange Traded Fund	–	7.85	0.38
IDBI Gold Exchange Traded Fund	95.12	7,323.15	0.41
Baroda BNP Paribas Gold ETF	–	77.90	0.42
UTI Gold Exchange Traded Fund	651.54	67.40	0.48
ICICI Prudential Gold ETF	1,905.05	69.05	0.5
Aditya BSL Gold ETF	353.23	70.99	0.54
Groww Gold ETF	–	79.50	–

Note: The best index mutual funds in the above table are derived from Tickertape’s Stock Screener. The data is as of 31st October 2024, and the filters applied are:

• Category: ETF > Gold 
• Expense ratio: Sorted from Lowest to Highest

Overview of the Best Gold ETFs in India

Zerodha Gold ETF

Zerodha Gold ETF is an exchange-traded fund designed to mirror gold’s performance, a metal deeply valued in Indian culture. Supported by physical gold, this ETF provides a straightforward and efficient way to invest without the need to manage, store, or safeguard actual gold. Investors can begin with as little as Rs.10 through their chosen stock broker once the ETF is listed.

On 31st October 2024, Zerodha Gold ETF had assets under management (AUM) of Rs. 73.1 cr., and a close price of Rs. 12.70. The ETF had an expense ratio of 0.31%.

Mirae Asset Gold ETF

The Mirae Asset Gold ETF is an ETF launched by Mirae Asset Global Investments, designed to provide investors with an easy and cost-effective way to invest in gold. This ETF is structured to track the performance of gold prices, usually by holding gold bullion or gold futures contracts, depending on the specific product structure and region where it is offered.

On 31st October 2024, Mirae Asset Gold ETF had an AUM of Rs. 397.47 cr., and a close price of Rs. 78.40. The ETF had an expense ratio of 0.32%.

Edelweiss Gold ETF

Edelweiss Gold ETF is an ETF managed by Edelweiss Asset Management Limited in India, designed to provide investors with a straightforward way to invest in gold without having to buy and store physical gold. This ETF typically tracks the performance of gold prices by holding physical gold of high purity (usually 99.5% or higher), providing returns that closely mirror gold’s market price.

On 31st October 2024, Edelweiss Gold ETF had an AUM of Rs. 69.34 cr., and a close price of Rs. 81.05. The ETF had an expense ratio of 0.35%.

Tata Gold Exchange Traded Fund

Tata Gold Exchange Traded Fund (Tata Gold ETF) is an ETF managed by Tata Asset Management in India, offering investors a way to invest in gold without the challenges of buying, storing, or insuring physical gold. This ETF is structured to track the price of gold by holding physical gold of high purity (typically 99.5% or above), providing returns that aim to mirror the performance of gold in the domestic market.

On 31st October 2024, Tata Gold Exchange Traded Fund had an AUM of Rs. 199.69 cr., and a close price of Rs. 7.85. The ETF had an expense ratio of 0.38%.

IDBI Gold Exchange Traded Fund

Launched in 2011, the IDBI Gold Exchange Traded Fund (ETF) tracks the performance of gold in the domestic market, providing an investment avenue for those looking to diversify through gold investments. It aims to replicate the price of physical gold.

On 31st October 2024, IDBI Gold ETF had a market capitalisation of Rs. 95.12 cr. and a close price of Rs. 7,323.15. The ETF had an expense ratio of 0.41%.

Baroda BNP Paribas Gold ETF

Baroda BNP Paribas Gold ETF is an open-ended exchange-traded fund launched by Baroda BNP Paribas Mutual Fund. This fund, introduced in late 2023, seeks to closely track the price of domestic gold, offering investors a way to invest in gold without physical ownership.

On 31st October 2024, Baroda BNP Paribas Gold ETF had an AUM of Rs. 68.77 cr. and a close price of Rs. 77.90 The ETF had an expense ratio of 0.42%.

UTI Gold Exchange Traded Fund

The UTI Gold ETF, launched in 2007, offers investors an opportunity to invest in gold by replicating its domestic price. The fund is designed to provide returns that closely correspond to the price of physical gold.

As of 31st October 2024, UTI Gold ETF had a market capitalisation of Rs. 651.54 cr., with a close price of Rs. 67.40. The ETF had an expense ratio of 0.48%.

ICICI Prudential Gold ETF

ICICI Prudential Gold ETF is an ETF managed by ICICI Prudential Asset Management that aims to closely track the domestic price of gold by holding physical gold as its primary asset. Launched in August 2010, it provides investors with a convenient, low-cost way to gain exposure to gold, benefiting from fluctuations in its price without directly handling the physical metal.

As of 31st October 2024, ICICI Prudential Gold ETF had a market capitalisation of Rs. 1,905.05 cr., with a close price of Rs. 69.05. The ETF had an expense ratio of 0.50%.

Aditya BSL Gold ETF

Aditya Birla Sun Life Gold ETF, launched in 2011, provides an opportunity for investors to gain exposure to the price movements of gold through an exchange-traded fund. It tracks the price of gold, offering a convenient way to invest in the precious metal.

On 31st October 2024, the Aditya BSL Gold ETF had a market capitalisation of Rs. 353.23 cr., with a close price of Rs. 70.99. The fund has an expense ratio of 0.54%.

Groww Gold ETF

Groww Mutual Fund launched Groww Gold ETF in October 2024. The ETF aims to closely track the domestic price of physical gold by investing in high-purity gold. Managed by Wilfred Gonsalves, this fund does not provide additional plans or options and bases its performance benchmark on the spot price of physical gold in the Indian market.

On 31st October 2024, the Groww Gold ETF had a close price of Rs. 79.50.

How Do Gold ETFs Work?

Gold ETFs in India operate by accumulating capital from many individual investors to pay for either shares of gold or stocks based on gold. Gold ETFs represent units of physical gold, giving the holders ownership rights over the real asset. Nippon India Gold BeES, which is one of the best Gold BeES in India 2024, holds physical gold to track price movements related to it.

A Gold ETF is essentially a mutual fund that invests in gold and stores the physical stock safely with banks. Your investment’s value rises or falls with the spot market price of gold. Gold ETFs are traded on the NSE, allowing you to buy and sell units through brokers like any other stock. The expense ratio of Gold ETFs is important, as it represents the cost of managing the ETF. For example, the best Gold ETF in India with expense ratio is sought after for offering value to investors while keeping costs low. Similarly, a low expense ratio Gold ETF like Gold BeES makes investing affordable.

Investing in Gold ETFs allows you to enter the gold market with a small investment. The flexibility provided by trading on the NSE makes Gold ETFs one of the easiest ways to invest in gold in India.

How to Find the Best Gold ETF?

Finding the best Gold ETF involves evaluating several factors that impact performance and suitability for your investment goals.

1. Historical Performance:
   Although past performance doesn’t guarantee future returns, reviewing historical data can give insights into the fund’s potential. Look at how the Gold ETF has performed during different market conditions to assess its resilience.
2. Liquidity:
   Liquidity is crucial, as it determines how quickly and easily you can buy or sell units. Highly liquid ETFs allow you to manage your financial needs promptly. This factor is essential when performing a Gold ETF comparison in India.
3. Tracking Error:
   The best Gold ETFs closely track the price of gold with minimal tracking error in Gold ETFs. The Gold ETF with the lowest tracking error in India ensures that your returns mirror the actual price movements of gold.
4. Expense Ratio:
   A lower expense ratio means lower management costs, which can improve your overall returns. When comparing Gold ETFs, choose those with a low expense ratio for better investment efficiency. Evaluating the best Gold ETF expense ratio is critical when choosing the right fund.
5. Share Price:
   The best Gold ETF share price is another important factor when making your decision. Understanding the ETF’s price trends in relation to gold prices helps gauge its performance.

When deciding which Gold ETF is best, consider all these factors together for a clear picture. Evaluating liquidity, expense ratios, and tracking errors can guide you to the top 5 Gold BeES in India or the top 10 best Gold BeES in India, depending on your portfolio needs.

How To Find the Best Gold ETF Using Tickertape?

Use Tickertape’s Stock Screener To Discover the Best Gold ETFs

Discover the best Gold ETFs with Tickertape’s Stock Screener based on metrics that matter to you. Add filters like expense ratio and sort it from low to high if you are looking for a low-cost Gold ETF. Adding a tracking error filter will help you identify ETFs that are deviating from the benchmark and those that are performing in line with it. Likewise, there are other filters related to risk, returns, and so on that you can add to the screener to get Gold ETFs in 2023.

Evaluate Gold ETFs with Tickertape’s ETF Pages

Once you have a list of the top Gold ETFs, you can evaluate these individually using Tickertape’s ETF Pages. Let us launch the Kotak Nifty 50 ETF as an example. Follow these steps:

• Go to Tickertape website or app
• Look for your desired ETF in the search box
• When on the ETF page, you can see an investment checklist on the left-hand side. This gives you a bird’s eye view of the ETF

Next, in the overview tab of Kotak Nifty 50 ETF, you can see the real-time NAV for various periods like 1 Day, 1 Week, 1 Month, and 1 Year, the asset class of underlying securities, and the type of indices the ETF is tracking. The overview tab also mentions the key metrics in addition to the expense ratio and tracking error, AUM of the ETF, and profile of the Asset Management Company.

But what really sets Tickertape’s ETF Pages apart from others is its “Peers” tab where you can compare the ETF with its peers based on expense ratio, tracking error, and liquidity. You can also compare the price trend of two or more ETFs or with a sing stock for your desired period.

The ‘News’ and ‘Events’ tabs on the ETF Page has recent developments and corporate actions relating to the fund and its constituents.

How Are Gold ETFs Taxed?

Understanding the tax implications of investing in Gold ETFs is crucial for effective financial planning. Gold ETFs, treated as non-equity mutual funds in India, are subject to specific tax rules that vary depending on the holding period. Here’s a breakdown of how Gold ETFs are taxed under the latest regulations:

Short-Term Capital Gains (STCG)

If you sell your Gold ETF units within three years of purchasing them, the gains are considered Short-Term Capital Gains (STCG). These gains are added to your total income and taxed according to your income tax slab rate. For instance, if you fall into the highest tax bracket, the STCG on your Gold ETF could be taxed at 30% plus applicable cess and surcharge.

Long-Term Capital Gains (LTCG)

If you hold your Gold ETF units for over three years, the gains are classified as Long-Term Capital Gains (LTCG). LTCG on Gold ETFs is taxed at a flat rate of 20%, with the benefit of indexation. Indexation allows you to adjust the purchase price of your Gold ETF for inflation, which can significantly reduce your taxable gains and, consequently, the tax payable.

Dividend Income

Although Gold ETFs typically do not distribute dividends, if any dividends are received, they are added to your total income and taxed according to your income tax slab. It’s important to note that the Dividend Distribution Tax (DDT) has been abolished, and the investor now bears the dividend tax.

Goods and Services Tax (GST) on Brokerage

While GST does not directly apply to Gold ETFs, it applies to the brokerage or transaction fee when you buy or sell them. The GST rate is currently 18% on the brokerage amount, which indirectly increases the cost of trading Gold ETFs.

The tax treatment of Gold ETFs can influence your investment strategy. When selecting the best gold ETF for your portfolio, consider these tax implications and other factors such as the expense ratio, liquidity, and tracking error.

Benefits of Investing in Gold ETFs

1. Since Gold ETFs are stored in a digital form in your Demat account, you need not worry about theft or paying storage costs.
2. You can access these as you require without having to depend on your locker provider.
3. Gold ETFs are liquid, just like stocks. You can buy and sell them as and when you need them.
4. Since ETFs are available in the form of units, you can buy your desired quantity at low costs. 
5. Gold ETFs act as a hedge against market volatility, giving your portfolio some stability.
6. Gold ETF in India doesn’t have entry and exit loads.
7. Investors can avail a loan by pledging their ETFs as security with financial institutions.
8. You can pledge Gold ETF units with banks as collateral to avail a loan.

Risks of Investing in Gold ETFs

1. Gold prices can fluctuate significantly, impacting your investment’s value.
2. The ETF’s returns may not perfectly match the actual gold price.
3. Low trading volumes can make it difficult to buy or sell large quantities.
4. Management fees can reduce your overall returns.
5. You don’t own physical gold, just digital units.
6. Exchange rate fluctuations can affect the value of international gold ETFs.

Gold ETF vs Physical Gold

Below are the major differences between gold ETFs and physical gold.

Criteria	Gold ETF	Physical Gold
Storage	Stored digitally in a Demat account	Requires physical storage and security
Liquidity	High liquidity; easily traded on exchanges	Less liquid; selling can take time
Expense Ratio	Low, includes management fees	Higher due to making charges, storage, and insurance costs
Purity	Standardised, no purity concerns	Purity can vary; may need verification
Investment Size	Can buy in small units, flexible investment	Typically requires a larger initial investment
Ease of Transaction	Can buy/sell online through a broker	Requires physical presence to buy/sell
Tax Treatment	Taxed as non-equity mutual funds	Subject to wealth tax and capital gains tax

Who Should Invest in Gold ETFs?

• Busy Professionals: Individuals with little time to manage physical assets who prefer a simple, digital investment.
• First-Time Investors: Those new to investing in gold who seek an easy and accessible way to diversify their portfolios.
• Long-Term Investors: People with a medium to long-term investment horizon looking for a stable asset to hedge against market volatility.
• Retirement Planners: Investors focused on building a retirement portfolio with a safe-haven asset like gold.
• Portfolio Diversifiers: Those looking to balance their portfolio by adding a non-correlated asset class such as gold, especially during times of economic uncertainty.

Things to Consider as an Investor

1. Expense Ratio:
   The expense ratio directly affects your returns, so opting for a low cost gold ETF can help maximise your gains over time. Even a small difference in expense ratios can have a significant impact, especially over the long term.
2. Liquidity:
   High liquidity ensures that you can easily buy or sell your Gold ETF units without affecting the market price. It’s important to choose a top gold bees in India that is actively traded on the exchange to avoid issues with liquidity.
3. Tracking Error:
   A low gold ETF tracking error indicates that the ETF closely follows the price movements of gold, ensuring that your returns mirror the actual gold price. The gold ETF with lowest tracking error in India is ideal for investors looking for accurate tracking of gold prices. Be cautious of ETFs with high tracking errors, as they may lead to lower-than-expected returns.
4. Investment Horizon:
   The best gold ETF in India 2024 is typically suited for medium to long-term investment horizons, allowing you to benefit from potential appreciation in gold prices over time. If you have a short-term focus, consider the market conditions carefully before investing.
5. Tax Implications:
   Be aware of the tax treatment of gold ETF India, as short-term gains are taxed according to your income slab, while long-term gains are taxed at 20% with indexation benefits. Understanding these implications can help you plan your investment strategy more effectively.
6. No Physical Storage:
   Since Gold ETFs are held digitally, you avoid the risks and costs associated with storing physical gold. This makes Gold ETFs a convenient option for those who prefer not to deal with the hassles of securing and insuring physical assets. When doing a gold ETF comparison India, this factor can be a deciding point for many investors.

To Conclude

Gold ETFs offer a convenient and efficient way to invest in gold, providing all the benefits of the precious metal without the need for physical storage. By carefully selecting the best Gold ETFs in India, you can gain exposure to gold’s potential for growth and stability while enjoying the ease of trading on the stock exchange. Whether you’re looking to hedge against market volatility or diversify your portfolio, the right Gold ETF can be a valuable addition to your investment strategy.

Frequently Asked Questions (FAQs)