Building Wealth: See How These Gold ETFs Performed In The Last 5 Years

With investing in a gold ETF, an individual can avail all the benefits of pouring their funds into gold without any of the hassles required in maintaining physical gold

With gold rates touching the sky, investment in gold has become a lucrative avenue for individuals to safeguard their funds and build their wealth. The liquidity and income generation offered by gold make investment in the precious metal extremely lucrative. 

However, physical gold can be a bit tedious to invest in and maintain. The safe keeping of physical gold in the form of jewellery, biscuits, etc can be a tiresome process. Further, if not bought from a trusted source, the purity of the metal can also be questioned. Therefore, gold ETFs (Exchange Traded Funds) provide a simple solution to these issues.

What Is A Gold ETF?

With investing in a gold ETF, an individual can avail all the benefits of pouring their funds into gold without any of the hassles required in maintaining physical gold.

A gold ETF provides a passive investment option to individuals that keeps a track of the price of the physical gold. It can be traded in an exchange during market hours and is backed by real gold of very high purity. One unit of a gold ETF is equivalent to 1 gram of physical gold. All you need to invest in a gold ETF is a demat account and a professional adviser to help you select the best fund for your financial needs and goals. 

Let’s take a look at some of the best gold ETFs in the country and how they have fared in the last five years. This list has been compiled based on Bankbazaar's data.

Axis Gold ETF

This gold ETF is an open-ended gold commodity scheme offered by the Axis Mutual Fund House. It perfectly suits those seeking to build their capital over the long to medium term and are pouring their funds into the metal to generate more returns in comparison to the performance of gold. This fund is of high risk in nature and has an expense ratio of 0.53 per cent. Further, it requires a minimum lumpsum investment of Rs 5,000 and has yielded returns of 10.87 per cent and 12.58 per cent in three and five-year periods respectively.

Invesco India Gold ETF

This fund was introduced by Invesco Asset Management (India) Private Ltd and has yielded an average return on investment (ROI) of 8 per cent since its inception. It comes with no lock-in period and suits those seeking for long-term investment avenue. It is high-risk in nature and requires at least Rs 5,000 in lumpsum investment. With an expense ratio of 0.55 per cent, the fund has generated 11.64 per cent returns in three years and 12.99 per cent return in five years. 

Kotak Gold ETF

This is a unique open-ended gold ETF and invests in the precious metal while keeping a tab on its current market price. It can almost be seen as investing in gold without receiving any of it physically. It is high-risk in nature and the starting lumpsum investment amount is Rs 5,000. It has an expense ratio of 0.55 per cent. Investors have earned 11.50 per cent returns from the ETF in a three-year period, while the yield for five years stands at 12.90 per cent.

SBI Gold ETF

This scheme is very popular in the country and is managed by SBI Mutual Funds House. It suits those individuals who have long-term investment goals and want to use their capital to invest in gold, gold-based securities, and gold bullion. The fund has an expense ratio of 0.64 per cent and is very high-risk in nature. It requires a minimum investment of Rs 5,000 and has yielded 12.9 per cent returns in five years. Its return for a three-year period stands at 11.6 per cent.

Aditya Birla Sun Life Gold ETF

Incorporated by Aditya Birla Sun Life Mutual Fund, this fund majorly invests in physical gold in order to earn returns close to the gold price. It is apt for individuals seeking to generate long-term gains in line with the performance of gold and wants to invest in 99.5 per cent pure physical gold. High-risk in nature, the fund requires a minimum of Rs 5,000 in investment and has an expense ratio of 0.54 per cent. Its return average for a three-year period stands at 11.6 per cent, while the yield for a five-year period is 12.9 per cent.

Now that you are aware of some of the best gold ETFs available for investors in the market, make your choice wisely and conduct your own research before finalising anything. Always take advice from a professional as investment is a risky business.