Gold ETFs in India to Invest

Indians love gifting and receiving gold during weddings, child birth, anniversaries, and special occasions. This glittering yellow metal has forever been a preferred buy and the safest and easiest way to invest, especially for traditional investors. While gold remains a lucrative investment product, the way it is used as an investment has evolved.

Also read: What is NCDEX

A Gold ETF, or Gold Exchange Traded Fund, is a type of mutual fund that invests in gold as its underlying asset. Each unit of a Gold ETF typically represents one gram of gold of 99.5% purity. These units are listed and traded on stock exchanges just like shares of a company.

Instead of buying physical gold, you buy units of the fund. The value of each unit moves in line with the domestic price of gold. When you sell your units, you receive the cash equivalent of the prevailing gold price, not physical gold.

Gold ETFs work by pooling investor money to buy and hold physical gold or gold-related instruments on their behalf. The fund house purchases gold bullion and stores it with a designated custodian. Each unit issued to investors corresponds to a fixed quantity of gold held by the fund.
 

When gold prices rise, the value of your ETF units goes up. When prices fall, the unit value declines accordingly. Since Gold ETFs are listed on exchanges, you can buy and sell them during market hours at real-time prices, giving you far more flexibility than physical gold.

• Available at Low Cost
  Gold ETFs are affordable, as they can be purchased in small units. This allows investors to start investing in gold even with limited capital, making it an accessible option.
• Highly Liquid
  Gold ETFs can be easily traded on the stock exchange, just like shares. This ensures high liquidity, giving investors the flexibility to buy or sell units anytime during market hours.
• No Locker Required
  As Gold ETFs are held electronically in demat accounts, there’s no need for physical storage or lockers, reducing costs and risks related to security and maintenance.
• Less Volatile
  Compared to gold mutual funds, Gold ETFs provide portfolio stability and serve as a hedge against market volatility. They allow investors to gain exposure to gold without the ups and downs of broader financial markets.

Investing in Gold ETFs in India is straightforward. Here is how you can get started:

1. Open a Demat account with a SEBI-registered broker if you do not already have one. A Demat account is mandatory to hold ETF units electronically.
2. Open a trading account linked to your Demat account to place buy and sell orders on the exchange.
3. Complete KYC verification by submitting your PAN card, address proof, and photograph.
4. Search for Gold ETFs on your trading platform and check the current market price per unit.
5. Place a buy order for the number of units you want to purchase during market hours (9:15 AM to 3:30 PM on NSE/BSE).
6. Monitor your holdings through your Demat account. Units will be credited to your account after the trade is settled.

Listed below are some of the popular gold ETFs in India in 2026 on the basis of their CAGR.

Note: Data indicative as of May-June 2026, sourced from publicly available fund performance reports. Past performance does not guarantee future returns. Market cap figures are subject to daily change. Verify current data from respective fund houses or AMFI before investing. The securities mentioned are for example purposes only and not a recommendation.

Also read: What is SEBI

Nippon India ETF Gold BeES
Launched in 2007, Nippon India ETF Gold BeES mirrors the price of physical gold. It offers investors a convenient, transparent way to invest in gold without owning it physically. This fund is one of the most popular gold ETFs in India, known for its reliability and efficient performance.

SBI Gold ETF
Introduced in 2009, the SBI Gold ETF offers an efficient method to invest in gold, tracking its price in India. It provides investors with exposure to the global gold market at low costs. The fund is known for simplicity, cost-effectiveness, and its potential to diversify investment portfolios through gold.

Kotak Gold ETF
Kotak Gold ETF, launched in 2007, aims to generate returns equivalent to domestic gold prices. It allows investors to access gold investment conveniently through an ETF format. The fund is structured to minimise physical risks while delivering performance closely aligned with gold's market value in India.

HDFC Gold Exchange Traded Fund
HDFC Gold ETF was established in 2010, offering a way to invest in gold without holding it physically. It seeks to track gold prices in India. This ETF combines convenience and safety, making it suitable for investors seeking portfolio diversification through a reliable gold-based instrument.

UTI Gold Exchange Traded Fund
Launched in 2007, the UTI Gold ETF replicates the price movement of physical gold in India. It enables investors to invest in gold easily and cost-effectively. The fund is designed to deliver returns that closely track gold’s domestic price, making it a transparent alternative to physical gold.

Also read: What is SEBI

Let us look at some of the popular gold ETFs in India in 2026. These are based on the expense ratio.

Note: Data sourced from publicly available fund information as of June 2026. Expense ratios are subject to revision by fund houses. Past performance does not guarantee future returns. Verify current figures from respective AMC websites or AMFI before investing. The securities mentioned are for example purposes only and not a recommendation.

• Gold Price Fluctuations
  Gold prices are influenced by inflation, interest rates, global economic stability, and geopolitical tensions. Understanding these factors is essential before investing, as they affect both short- and long-term performance.
• Tracking Accuracy
  Gold ETFs aim to mirror the price of physical gold. However, small deviations may arise due to fund expenses or market inefficiencies. ETFs with lower tracking errors typically provide more accurate gold price exposure
• Fund Fees (Expense Ratio)
  The expense ratio represents the fund's annual management fee. A higher fee reduces your overall returns. Compare this across Gold ETFs to select a cost-effective option that doesn’t erode potential gains.
• Liquidity and Trade Volume
  Choose ETFs with higher trading volumes and strong liquidity. These attributes ensure easier entry and exit from positions, with minimal price impact and reduced bid-ask spreads.
• Fund Credibility and Past Performance
  Always assess the reputation of the fund house and review historical returns. Well-established fund managers with consistent past performance tend to maintain a closer alignment with gold prices and manage assets more effectively.

1. Investing without a clear goal
   Gold is best used as a portfolio hedge or a long-term store of value, not as a tool for short-term speculation. Investing without a clear purpose can lead to poor timing and unnecessary losses.
2. Ignoring the expense ratio
   Many investors focus only on returns and overlook the expense ratio. Over a long investment horizon, even a small difference in annual fees can significantly reduce your total wealth creation.
3. Over-allocating to gold
   Financial advisors typically recommend limiting gold exposure to 10 to 15 per cent of your overall portfolio. Over-allocating to gold at the expense of equities or other assets can limit long-term growth potential.
4. Confusing Gold ETFs with Gold Mutual Funds
   Gold ETFs require a Demat account and are traded on the exchange in real time. Gold mutual funds, on the other hand, do not require a Demat account and are priced at end-of-day NAV. Mixing up the two can lead to unexpected costs or operational difficulties.
5. Selling during short-term dips
   Gold prices can be volatile in the short term. Selling your units every time prices dip defeats the purpose of gold as a long-term hedge. A disciplined, stay-invested approach works better for most investors.

Understanding how Gold ETFs are taxed helps you plan your investment better and avoid surprises at the time of redemption.

1. Short-term capital gains (STCG)
   If you sell your Gold ETF units within 24 months of purchase, the gains are treated as short-term capital gains and taxed as per your applicable income tax slab rate.
2. Long-term capital gains (LTCG)
   If you hold your Gold ETF units for more than 24 months before selling, the gains are treated as long-term capital gains and taxed at 12.5% without the benefit of indexation, as per the Union Budget 2024 amendments.
3. No TDS
   Gold ETFs are not subject to Tax Deducted at Source (TDS) at the time of redemption, unlike some other investment products.
4. Securities Transaction Tax (STT)
   STT is applicable at the time of selling Gold ETF units on the exchange, similar to equity shares.

Note: Tax rules are subject to change. Consult a qualified tax advisor for personalised guidance based on your financial situation.

For most Indians, buying gold is a luxury, a status symbol, and an assurance for the future. Investing in one of the popular gold ETFs in India in 2024 can boost your investment portfolio. However, before investing in gold ETFs, you need to consider several factors, such as the risk factor, fund management fee, taxation, and asset allocation. Keep in mind that you need to open a Demat account to invest in ETFs, and you must choose a trusted broker.