What is a Gold ETF?
All large Indian gold ETFs returned roughly 29% over the year to 27 September 2026 because they hold the same gold, so the choice comes down to cost and liquidity. Expense ratios run from 0.35% (Mirae Asset, Zerodha) to 0.81% (Gold BeES), and Gold BeES is by far the most traded. A gold ETF (exchange traded fund) is a mutual fund that holds physical gold of 99.5% purity in a vault and issues units against it. You buy and sell those units on the NSE or BSE through a demat account, just like a share. There are no making charges, no purity worries and no locker to rent.
Units are cheap to buy in small amounts. Nippon India ETF Gold BeES, the largest, was priced at about ₹121 a unit on 28 September 2026, so a single unit is a small fraction of a gram.
Why Gold ETFs Beat Jewellery as an Investment
- No making charges: jewellery loses 10–25% to making charges the day you buy it.
- Pure gold: ETFs hold 99.5% purity bullion; jewellery is usually 22K or 18K.
- No storage cost: nothing to insure or keep in a bank locker.
- Easy to sell: sell at the market price any trading day, with no jeweller's discount.
For how gold ETFs compare with Sovereign Gold Bonds and physical gold, see Physical Gold vs SGB vs Gold ETF.
All Large Gold ETFs in India (September 2026)
Every gold ETF with more than ₹1,000 crore in assets, sorted by size. AUM is as of 31 August 2026; expense ratios were checked on 28–29 September 2026.
| Fund | NSE symbol | Expense ratio | AUM (₹ Cr) | Tracking error |
|---|---|---|---|---|
| Nippon India ETF Gold BeES | GOLDBEES | 0.81% | 58,629 | 0.41% |
| ICICI Prudential Gold ETF | GOLDIETF | 0.49% | 28,325 | 0.47% |
| SBI Gold ETF | SETFGOLD | 0.65% | 27,085 | 0.43% |
| HDFC Gold ETF | HDFCGOLD | 0.59% | 24,417 | 0.39% |
| Kotak Gold ETF | GOLD1 | 0.52% | 14,989 | 0.38% |
| Tata Gold ETF | TATAGOLD | 0.39% | 6,172 | 0.66% |
| Axis Gold ETF | GOLDAXIS | 0.52% | 5,833 | 0.75% |
| UTI Gold ETF | GOLDBETA | 0.59% | 4,514 | 0.29% |
| Mirae Asset Gold ETF | GOLDETF | 0.35% | 3,530 | 0.58% |
| Aditya Birla Sun Life Gold ETF | BSLGOLDETF | 0.44% | 3,106 | 0.42% |
| DSP Gold ETF | GOLDADD | 0.45% | 2,855 | 0.50% |
| Zerodha Gold ETF | GOLDCASE | 0.35% | 2,571 | 0.58% |
| Edelweiss Gold ETF | EGOLD | 0.50% | 1,789 | 1.15% |
| LIC MF Gold ETF | LICMFGOLD | 0.45% | 1,500 | 0.48% |
Tracking error is annualised and calculated from daily NAVs by sharpely as of 27 September 2026; the AMCs publish their own figures in monthly disclosures. Tata Gold ETF's expense ratio is from AMFI's September 2026 filing. Smaller gold ETFs (Invesco, Quantum, Groww, 360 ONE and others) are under ₹1,000 crore.
What the table tells you
- Returns are almost identical. Every fund above delivered roughly 29% over the year to 27 September 2026 and about 35% a year over three years, because they all hold the same gold. Picking a fund by past return tells you nothing.
- Cost is the real difference. Expense ratios run from 0.35% (Mirae Asset, Zerodha) to 0.81% (Gold BeES). Among the five biggest funds, ICICI Prudential is cheapest at 0.49%.
- Size buys liquidity. Gold BeES is by far the largest and most traded, which keeps the gap between buy and sell prices tight. That matters more for large lump-sum trades than for small monthly buys. See our Gold BeES review and SBI Gold ETF review.
How to Choose a Gold ETF
Since every gold ETF holds the same metal, only four things separate them.
1. Expense ratio
The fee comes out of your returns every year. On a long holding, a 0.3 percentage-point gap adds up to several percent of your final value. Under 0.50% is cheap for a gold ETF; above 0.75% is expensive.
2. Tracking error
How closely the fund follows the domestic gold price. Most large gold ETFs sit between 0.3% and 0.5%. A figure well above 1% deserves a question.
3. Liquidity
Check the daily traded volume on the NSE before a large order. Thinly traded ETFs can cost you 0.5% or more in the bid-ask spread on the way in and out.
4. Where you buy it
Your broker's brokerage and demat charges apply to every ETF trade. If you plan small monthly purchases, compare that cost with a gold fund of funds below.
Gold ETF vs Gold Fund of Funds (FoF)
If you don't have a demat account, a gold fund of funds invests in a gold ETF for you and works like any mutual fund.
| Feature | Gold ETF | Gold FoF |
|---|---|---|
| Demat account needed | Yes | No |
| Monthly SIP | Through some brokers | Yes, directly with the AMC |
| Costs | ETF expense ratio + brokerage and spread | FoF expense ratio on top of the underlying ETF's costs |
| Long-term for tax after | 12 months | 24 months |
| Best for | Lump sums, demat holders | Automatic SIPs, no demat |
How Gold ETFs Are Taxed (2026)
For units sold on or after 1 April 2025 (whenever you bought them):
- Gold ETFs: held more than 12 months, gains are long-term and taxed at 12.5% without indexation. Held 12 months or less, gains are added to your income and taxed at your slab rate.
- Gold FoFs and gold mutual funds: the same 12.5% rate, but only after more than 24 months.
- The ₹1.25 lakh yearly exemption applies only to equity, so it does not cover gold.
Older rules matter only for sales before 1 April 2025; check the capital gains statement from your broker or AMC for those years.
What About Sovereign Gold Bonds?
The government has not issued a new SGB tranche since 2024, so you can only buy existing bonds on the stock exchange, where volumes are thin. They still pay 2.5% interest a year, but check the current tax treatment of maturity proceeds for bonds bought on the exchange before relying on them. For most new gold investment, an ETF or FoF is now the practical route.
How Much Gold Should You Hold?
Gold's recent run has been exceptional, but it has also gone through long flat stretches in the past. Treat it as a stabiliser that tends to hold up when equities fall, not as your main growth engine.
- Age 25–40: around 5% of your portfolio
- Age 40–55: 7–10%
- 55 and above: 10–15%, to cushion equity falls
After a big rally, gold can drift above your target. Rebalancing back to it once a year is a sell-high, buy-low habit, not market timing. Compare post-tax outcomes with our gold investment comparator.
Common Mistakes to Avoid
- Choosing by last year's return: all gold ETFs returned about the same. Choose on cost and liquidity.
- Buying after a big rally: set a target allocation and buy towards it gradually instead of chasing headlines.
- Assuming FoFs follow ETF tax rules: a FoF needs 24 months, not 12, to qualify as long-term.
- Counting jewellery as investment: keep it out of your net worth. It is consumption.
The Bottom Line
Gold ETFs in India all track the same asset, so the choice comes down to expense ratio, liquidity and how you want to buy. Decide how much gold belongs in your portfolio first, then pick the cheapest liquid way to hold it. A monthly SIP of ₹2,000–3,000 into a gold FoF is enough to give most portfolios a meaningful cushion over a decade.
This guide explains how to compare gold ETFs; it is not a recommendation to buy any specific fund.
