Interview from 2020
Gold and silver ETFs, or exchange-traded funds, allow investors to gain exposure to these precious metals without needing to buy or store them physically.
These ETFs typically invest in gold or silver bullion and futures contracts, aiming to closely track the price of the metals.
For those who don't have demat accounts or find trading complicated, gold or silver funds offer an easier option by investing in a gold or silver ETF.
Investing in precious metals through mutual funds is advantageous as it eliminates storage costs, concerns about purity, making charges, or theft.
Gold serves as a portfolio diversifier and a hedge against rising inflation. Wealth managers recommend allocating 10-15% of portfolios to gold and silver, depending on individual risk appetite and asset allocation.
Purchasing units of an MF scheme provides exposure to gold or silver as an asset class and allows price tracking at a low cost. Investors can choose a gold or silver ETF/fund, or opt for a multi-asset fund that includes gold or silver in its portfolio.
As of July 31, 2025, 21 gold ETFs manage ₹66,664 crore in assets, while 15 silver ETFs handle ₹15,500 crore as of May 31, 2025.
Gold has delivered strong returns over the past decade. In rupee terms, gold funds have provided a 42.5% return over the last year. Over three, five, and ten years, these schemes have offered average annualized returns of 26%, 13.6%, and 13.2%, respectively.
Also see - Sovereign Gold Bonds (SGB)