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Mon, 11 May 2026
02:10:41 pm
Mon, 11 May 2026
02:10:41 pm
Rudransh Sangwan
Published at: May 11, 2026, 12:03 PM
Synopsis
Gold ETFs have emerged as one of India’s best-performing investment categories in 2026, with major funds delivering over 50% annual returns. Nippon India Gold BeES, SBI Gold ETF, ICICI Prudential Gold ETF, Kotak Gold ETF, HDFC Gold ETF, and Mirae Asset Gold ETF continue attracting strong investor interest amid rising geopolitical tensions and inflation concerns.
Gold Exchange Traded Funds (Gold ETFs) have emerged as one of the strongest-performing investment categories in India in 2026, delivering more than 50% annual returns amid rising geopolitical tensions, persistent inflation concerns, aggressive central bank gold buying, and strong domestic investment demand.
As gold prices continue trading near historic highs, investors are increasingly turning toward Gold ETFs as a more efficient alternative to physical gold. Unlike traditional jewellery purchases, Gold ETFs eliminate concerns related to storage, purity verification, making charges, and security, while offering liquidity through stock exchanges.
With global uncertainty rising and bullion prices remaining volatile, institutional and retail participation in Gold ETFs has accelerated significantly across Indian markets.
Gold has become one of the preferred safe-haven assets globally in 2026. Several macroeconomic and geopolitical factors have supported the sharp rally in bullion prices:
| Factor | Impact on Gold |
|---|---|
| US-Iran geopolitical tensions | Increased safe-haven demand |
| Central bank gold buying | Strong long-term support |
| Inflation concerns | Boosted hedging demand |
| Weakening global growth | Defensive allocation rise |
| Currency volatility | Increased commodity exposure |
| Equity market uncertainty | Shift toward defensive assets |
As a result, Indian Gold ETFs have delivered exceptional returns over the last year, with several leading funds posting gains above 53%.
Nippon India Mutual Fund remains the pioneer of Gold ETFs in India and continues to dominate the segment in terms of trading volumes and liquidity.
The ETF is widely preferred by institutional investors, traders, and high-net-worth individuals due to its deep liquidity and operational efficiency.
HDFC Mutual Fund continues to remain one of the most trusted long-term gold investment options in India.
The fund is considered suitable for long-term investors looking for stable commodity exposure within diversified portfolios.
Kotak Mahindra Mutual Fund has emerged as one of the best-performing Gold ETFs in terms of tracking efficiency.
The ETF is preferred by investors focused on accurate gold price replication and operational efficiency.
ICICI Prudential Mutual Fund remains one of the largest commodity ETF players in India.
The fund continues to attract conservative and institutional investors seeking scale, stability, and long-term commodity allocation.
SBI Mutual Fund benefits heavily from strong retail trust and public sector banking distribution.
The ETF remains popular among investors seeking stability and long-term gold exposure through a trusted banking ecosystem.
Mirae Asset Mutual Fund is among the fastest-growing newer entrants in the Gold ETF ecosystem.
The fund is increasingly gaining traction among younger investors and passive investing enthusiasts.
| Gold ETF | Estimated AUM (₹ Cr) | 1-Year Return | 5-Year CAGR |
|---|---|---|---|
| Nippon India Gold BeES | ~14,129 | 53.78% | 24.60% |
| ICICI Prudential Gold ETF | ~24,470 | 53.81% | 24.83% |
| SBI Gold ETF | ~24,549 | 53.21% | 24.74% |
| Kotak Gold ETF | ~5,438 | 54.28% | 24.55% |
| HDFC Gold ETF | ~5,237 | 52.77% | 24.79% |
| Mirae Asset Gold ETF | ~3,117 | 53.09% | N/A |
While returns across Gold ETFs appear similar because all funds track physical gold prices, several important factors differentiate them.
Liquidity is extremely important for ETF investors. Higher trading volume ensures:
Nippon India Gold BeES continues to lead in overall exchange liquidity.
Tracking error measures how closely an ETF mirrors actual domestic gold prices.
Lower tracking error indicates:
Kotak and SBI Gold ETFs currently maintain some of the lowest tracking errors in the segment.
Expense ratios directly affect long-term compounding returns.
Lower expense ratios help investors retain more gains over extended investment periods.
| Gold ETF Advantage | Investor Benefit |
|---|---|
| No storage risk | Safer investment |
| No making charges | Lower cost |
| Exchange liquidity | Easy buying/selling |
| High purity exposure | Standardized investment |
| Digital ownership | Simplified tracking |
| Portfolio diversification | Better risk management |
Gold ETFs are increasingly becoming the preferred route for investors looking to diversify portfolios without the operational hassles associated with physical bullion.
If Gold ETF units are sold within 12 months, gains are taxed according to the investor’s income tax slab.
If held for more than 12 months, gains attract a flat 12.5% tax rate under current FY26 rules.
Investors are advised to consult tax professionals for updated regulations and individual applicability.
Gold continues to play a major role in portfolio diversification due to:
Many wealth advisors continue recommending a strategic gold allocation within long-term investment portfolios.
Analysts believe Gold ETFs may continue witnessing strong inflows throughout 2026 if:
However, experts also caution that bullion prices could remain highly volatile in the short term depending on global macroeconomic developments and US Federal Reserve policy expectations.
Gold ETFs have emerged as one of India’s strongest-performing investment categories in 2026, delivering exceptional returns amid a volatile global environment.
Funds like Nippon India Gold BeES, SBI Gold ETF, ICICI Prudential Gold ETF, Kotak Gold ETF, HDFC Gold ETF, and Mirae Asset Gold ETF continue attracting massive investor participation as gold maintains its status as a preferred defensive asset.
As uncertainty across global markets continues, Gold ETFs are increasingly becoming a core portfolio allocation tool for both retail and institutional investors seeking long-term wealth preservation, liquidity, and diversification.
Gold ETFs are exchange-traded funds that track domestic gold prices and allow investors to gain exposure to gold without buying physical bullion.
Kotak Gold ETF delivered one of the highest 1-year returns among major Gold ETFs at around 54.28%.
Gold ETFs offer liquidity, purity assurance, lower costs, and easier portfolio diversification compared to physical gold.
Gold ETFs eliminate storage risks, theft concerns, and purity verification issues associated with physical gold ownership.
SBI Gold ETF and ICICI Prudential Gold ETF currently rank among the largest by assets under management.
Tracking error measures how closely an ETF follows actual gold prices. Lower tracking error indicates better fund performance efficiency.
Many investors use Gold ETFs as long-term portfolio diversification and inflation-hedging tools.
Short-term gains are taxed according to income slabs, while long-term gains after 12 months are taxed at 12.5%.
Gold prices are being supported by geopolitical tensions, inflation concerns, global uncertainty, and strong central bank demand.
Yes. Gold ETFs are traded on stock exchanges like NSE and BSE just like regular equities.
Financial journalist specializing in market analysis, stock research, and investment trends. Dedicated to providing accurate, timely insights for informed decision-making.
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