These 9 Gold ETFs delivered nearly 27% return since last Diwali; check details | Mint

If you plan to invest in digital gold this Diwali, remember that you have several options, including gold mutual funds, gold ETFs and gold bonds. With the government planning to discontinue gold bonds, investors can consider investing in gold ETFs and gold mutual funds.

There are 17 gold exchange-traded funds (ETFs) with total assets under management (AUM) amounting to ₹39,823 crore, of which ₹1,233 crore worth inflow was added in September alone.

This is quite a humble figure compared to other schemes. For example, there are 243 schemes under the ‘index funds’ category with total AUMs of ₹2.69 lakh crore. Wealth advisors believe that the lack of popularity of gold ETFs can be partly attributed to the fact that they require investors to possess a demat account. No such restriction exists for investing in other mutual funds.

As of October 29, 2024, 24 karat gold is priced at ₹7,996 per gram and 22 karat gold at ₹7,331 per gram. Check this for more details.

(Source: AMFI; Regular returns as of Oct 28, 2024)

Similar returns

As we can see in the table above, almost all the gold ETFs have delivered nearly similar returns, i.e., 27 per cent in the past year. Gold prices have risen around 28 per cent since last Diwali. The same level of returns can be seen in these exchange-traded funds (ETFs).

For instance, Aditya Birla Sun Life Gold ETF returned 27.03 per cent in the past year, Axis Gold ETF returned 26.31 per cent, and DSP Gold ETF delivered a return of 26.90 per cent. Other schemes also returned similar amounts during this period.

“It is better to buy gold ETFs since you don’t have to pay the making charges (around 10 per cent) and GST (3 per cent). Another advantage of buying digital gold is that you can buy even for ₹1,000, an option not available in the case of hard jewellery,” says Sridharan S., a Sebi-registered investment advisor and founder of Wealth Ladder Direct.

It is worth mentioning that investors can ride the gold wave by investing in digital gold without having to incur any making charges or 3 per cent GST. On the contrary, when you invest in physical gold, you are meant to incur making charges and GST. As a result, the potential to earn higher gains is stunted in the case of physical gold vis-a-vis digital gold.