As an investment buying gold in physical form can not be hard. But when the time comes to sell it, its liquidity becomes an issue. On the other hand, buying Gold ETFs in India is risk-free. Hence you are only investing in shares not on the gold directly. Therefore its liquidity is not an issue. It is also considered a smart way to invest in gold in today’s world. As I told you before about its high liquidity. That means when the gold market is going up you can simply sell your Gold ETFs and book your profits. Selling ETFs are hassle-free and profitable at the same time.
In the following, we shall learn about Gold ETFs and if it is safe to invest in Gold ETFs in India. We shall also learn about the best Gold ETFs to invest in in the upcoming year.
FAQ about Gold ETFs in India
The full form of ETF is Exchange Traded Fund. ETF units are typically purchased and sold by a registered broker at a reputable stock exchange. An ETF’s units are traded on stock markets. ETF units are not purchased and sold like regular open-end equity funds because they are only listed on the stock exchange. Through the exchange, an investor can buy as many units as she wants without any restrictions.
If any investor invests in Exchange Traded Funds through gold that is called Gold ETFs. That means you are investing your money in gold which is 99.5% pure through a Demat account. Buying physical gold can be an issue as it might be got stolen, or you may get less value when you will sell it in the near future. But in the Gold ETFs, there is no such risk.
Yes always, many analysts have analyzed that whenever the equity market moves in a bear market with a downtrend, the commodity market accelerates and comes up with an uptrend. That means if the equity market is going down words then putting your investment in the commodity market is more profitable.
Some of the well-known Gold ETFs are Reliance Gold ETFs, SBI Gold ETFs, Quantum Gold ETFs, HDFC Gold ETFs, etc.
Definition of Gold ETFs in India
Aside from buying gold bullion directly. You can obtain exposure to gold by investing in Gold Exchange-Traded Funds (ETFs) or gold futures contracts. When compared to alternatives such as gold futures or shares of gold-mining firms, some investors see ETFs as more liquid. As it is also a low-cost way to invest in gold. Still, because gold’s price fluctuates a lot, ETFs that track it can be somewhat volatile. Gold ETFs are a much safer option from an investor’s perspective. There are very few cases when the gold price has dropped drastically. As we all know the value of Gold ETFs also grows with the gold price itself.
How to invest in Gold ETFs?
Investing in Gold ETFs is as easy as investing in the stock market. The basic thing you need is a Demat account under any broker house or any similar sort of online trading account. After you’ve set up your account, all you have to do now is choose Gold ETF and place an order through your broker’s trading site.
Many people often think it is not safe to invest in Gold ETFs. But let me tell you it is safe. It is just like buying gold from the market. Gold investment is a secure investment. Since it may be used to hedge against currency fluctuations and inflation. Gold ETFs that are more than a year old are subject to long-term capital gains tax. Gold ETFs, on the other hand, are exempt from VAT, Wealth Tax, and Securities Transaction Tax.
Check the Gold ETF Market from NSE India
First, open Google Chrome and write “nseindia.com”. Google Chrome will take you to the official site of the National Stock Exchange of India.
After visiting the website, you can see a page on your screen which looks like the above image. This is the home page of the National Stock Exchange India. As we are trying to search for the ETF segment we will click on the “Market Data” section.
After clicking on “Market Data” a page will open which looks like the following image. In which we will click on the “Equity & SME Market”.
From there select “Exchange Traded Fund”. Watch the following image for an idea. Now, A page will show up containing all the ETF companies.
In the image below, I show that with an orange rectangular box. Now click on the drop drow arrow and choose Gold ETFs from there.
After clicking on it, you will see all the Gold ETFs presented on your screen. If you want to know about the most traded Gold ETFs then go to the volume section and click on it.
Best Gold ETFs in India According to Volume
The best Gold Exchange-Traded Funds according to the Indian share market is being presented in the following. We have picked the following shares according to their trading volume. In which GoldBees ETF share has the best trading volume. In the following, we have arranged the Gold ETF shares in descending order.
i) GoldBees
Nippo Asset Management company is the owner of GoldBees. It launched its fund on 8th March 2007. If the trading volume on the stock exchange is large, however, it is better to buy and sell Gold ETF. This will ensure that liquidity is maintained, and you will be able to purchase and sell units at any time and in any quantity. The Nippon India ETF GoldBees has the highest average monthly trading volume of all listed Gold ETFs at Rs 3,845.26 Cr.
- The asset manager currently managing 6416.57cr.
- If we take at their return percentage that is quite satisfying. But you have to invest it for a long time for a minimum of 3 to 4 years. Because according to the returns 1-year return is -4.52%, 3-year return is 46.26%, and in the 5 years, the return is 63.28%. So as I told you before Gold ETFs are for long-term investments.
- This share is highly liquid. As you can buy or sell it whenever you want.
ii) Kotak Gold
Kotak Industries come up with its Kotak Gold ETF on 27th July 2007. Abhishek Bisen is the fund manager. The share price was 41.82 rupees on 31st Dec 2021. The price fluctuates a bit but if you invest in a steady manner and book your profit from time to time. This sector will help to gain profit in the passing years.
Here I have presented you the chart of Kotak Gold ETF by the growth of the volume you can easily guess that the gold market is very good for trading and investing.
- The asset manager is in charge of 2012cr at the moment.
- When we look at their return percentage, it’s extremely impressive. However, you must invest for a lengthy period of time, at least 3 to 4 years. Because the 1-year return is -11.83 per cent, the 3-year return is 53.10 per cent, and the 5-year return is 38.47 per cent, according to the results. As I have stated, Gold ETFs are intended for long-term investments.
- This stock is quite liquid. Because you have the option to buy or sell it whenever you choose.
iii) Axis Gold ETFs
41.62 rupee is the current share price of Axis Gold ETF. the company published its IPO on 20th October 2010. Mr Aditya Pagaria is the current fund manager of Axis Gold.
- The current asset is 108.86cr which is managed by the asset manager.
- If we take a look at the returns of this share it is quite clear that the share has provided returns of 5 years is 9.82%, 3 years is 14.02% and yearly is -6.52%. These returns are on an average investment of 100k.
- The liquid is 35,000 grams as Gold ETFs are traded in lots of 1 gram so in that perspective 35000g means 35 kg of gold.
iv) HDFCMFGETF
42.67 rupees is the current price of HDFCMFGETF’s Gold ETF share. It started its journey on 13-Aug-2010. Krishan Kumar Daga is the current fund manager who invests the money in gold.  ₹ 2,865 Cr (As of 30-Nov-2021) is the asset value of the company.
- When we look at the results of this stock, we can see that it has generated returns of 46.67 per cent over three years and -6.75 per cent over one year.
- High liquidity.
v) ICICIGOLD
The current price of the share is 42.45 rupees. The company launched it on 30th June 2010. The current fund manager is Manish Banthia.
- The net assets of this company are 2450.89 Cr.
- Liquidity is not an issue as many investors as well as traders like to invest in these Gold ETFs. That is why it has a high volume.
- The annual return on 1 year is -6.66%, 3 years’ return is 13.73% and 5 years’ return will be 9.51%.
Gold ETFs in India Suggested by Money Control
In the following list by MoneyControl, I have presented you the table of Gold ETFs which is going well in the market.
| Company Name | Last Price | % Chg | 52 wk High | 52 wk Low | Market Cap (Rs. cr) |
|---|---|---|---|---|---|
| SBI Gold ETF | 4,280.00 | 0.54 | 4,712.00 | 3,930.00 | 327.03 |
| Invesco G-ETF | 4,360.00 | 1.45 | 4,745.00 | 3,989.50 | 49.83 |
| HDFC Gold ETF | 42.84 | 0.61 | 50.00 | 38.70 | 6.59 |
| UTI – Gold | 41.69 | 0.46 | 46.75 | 39.21 | 5.79 |
| Nippon ETF Gold | 41.65 | 0.41 | 45.20 | 38.17 | 4.27 |
| Axis Gold ETF | 41.68 | 0.12 | 44.99 | 38.36 | 3.20 |
| IPRU Gold ETF | 42.75 | 0.33 | 46.50 | 39.05 | 2.00 |
| Kotak MF-GETF | 42.08 | 0.53 | 45.29 | 36.81 | 1.68 |
| Birla Gold ETF | 43.95 | 0.07 | 44.90 | 0.00 | 1.00 |
Gold ETFs in India Suggested by BankBazaar
BankBazaar broker house suggested Gold ETFs are
- Birla Sun Life Gold ETF
- Goldman Sachs Gold ETF
- Religare Invesco Gold ETF
- Quantum Gold Fund
- SBI Gold ETF
- IDBI Gold ETF
- R*Shares Gold ETF
- Axis Gold ETF
- Kotak Gold ETF
- ICICI Prudential Gold ETF
Gold ETFs in India Peer Comparison
In the following, I have put forth a comparison of all the Gold ETFs which I have mentioned above. Hence, we all know Nippon GoldBees is the best Gold ETF as it has a high volume. People find it trustworthy too. That is another reason most traders and investors who want to invest in Gold ETFs invest through Nippon GoldBees.
As you can see in the above picture you will find that if you are reluctant to invest in Nippon GoldBees there are also some similar Gold ETFs that you can take up as a suggestion. Which can be also profitable to invest in.
Conclusion
In the end, I hope you have a clear view of Gold ETFs. As we have discussed the topic throwing. But one thing that you have to keep in mind is that I have chosen the shares according to their trading volume. There are so many other big stock brokers who have suggested some other shares which is ok. Because they have made the list according to some other parameters such as returns, background, etc. So now it is upon you what kind of shares you are looking for for trading purposes.
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