Gold prices in India have been rising steadily for the past few years. If we look at the data after March 2020, gold prices (24 karat) have more than doubled to Rs 88,500 per 10 grams. This tremendous surge has now further increased the inclination of investors towards various other gold-linked investments, including gold exchange-traded funds (ETFs). Rather, many investors are preferring to invest in gold ETFs instead of buying gold traditionally. The reason for this is clear — investing in gold ETFs neither causes the hassle of keeping the metal physically, nor the worry of theft or other risks. This is the reason why gold ETFs have now become a popular way to provide stability in the portfolio and protection from inflation.
Buying gold ETFs means you are keeping with you the precious metal in an electronic form. You can buy and sell gold ETFs just as you would trade in stocks. One gold ETF unit is equal to 1 gram of the metal.
Unlike equity mutual funds, where investors often take decisions by comparing the past returns of the funds, the case of gold ETFs is slightly different. Since these funds directly track gold prices, their returns are almost the same. In such a situation, the most important thing for investors is the ‘expense ratio’ — that is, the cost of managing the fund. Choosing a gold ETF with a low expense ratio means lower costs and higher returns. There are several gold ETFs available in the Indian market, and if investors wisely choose the low-cost option, they can get better returns in the long run.
Also read: Top 10 gold ETFs in India
In this story, we will take a look at 5 cheapest gold ETFs available in India based on their expense ratio (low to high).
1. Zerodha Gold ETF
Expense Ratio: 0.32%
Launch Date: 26 February 2024
2. Mirae Asset Gold ETF
Expense Ratio: 0.34%
Launch Date: 20 February 2023
3. LIC MF Gold ETF
Expense Ratio: 0.41%
Launch Date: 9 November 2011
4. Tata Gold ETF
Expense Ratio: 0.42%
Launch Date: 12 January 2024
5. Baroda BNP Paribas Gold ETF
Expense Ratio: 0.48%
Launch Date: 13 December 2023
(Data: Value Research)
Gold ETFs: Benefits,
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