Gold's Strategic Role
Experts generally view gold as a protective asset rather than a primary vehicle for portfolio growth. ETFs offer efficiency and cost-effectiveness compared
to the complexities and expenses associated with physical gold ownership. Himanshu Shrivastava of Morningstar noted that Indian investors have increasingly favored gold ETFs, seeing them as a regulated and liquid alternative to physical gold, especially during times of uncertainty in the equity and bond markets. He observed that consistent investment in gold ETFs, even amidst market volatility, underscores their strategic use as a hedge and diversification tool, rather than a speculative investment. This positive sentiment has been further fueled by rising domestic gold prices, encouraging more investments in gold-linked products.
Top Performing ETFs
Nippon India Gold BeES emerged as a leading performer among Indian gold ETFs, as these funds accounted for close to 5% of global inflows in 2025. Other notable ETFs also witnessed significant investment. ICICI Prudential Gold iWIN ETF, ranking 22nd globally, concluded the year with 13.2 tonnes of holdings and assets totaling $1.95 billion, registering net inflows of $683 million. SBI Gold ETF and HDFC Gold ETF, ranked 26th and 25th worldwide respectively, also saw continuous inflows, managing assets over ₹17,000 crore and offering one-year returns of about 73–74%. Mid-sized products, including Kotak Gold ETF, Axis Gold ETF, Zerodha Gold ETF, Mirae Asset Gold ETF, DSP Gold ETF, UTI Gold ETF, Aditya Birla Sun Life Gold ETF, and Quant Gold ETF, contributed to the influx of domestic investments, demonstrating widespread investor involvement.
Investor Perspective
According to Shweta Rajani, Head – Mutual Funds at Anand Rathi Wealth, investors should have a clear understanding of their investment goals and the nature of gold. Gold traditionally serves as a hedge against inflation, geopolitical risks, and global uncertainties, but it also experiences cycles similar to those of equity investments. She further elaborated that gold's performance may vary, influenced by central bank activities and jewelry demand. Gold, in her view, is not a replacement for equity; it is more suited to function like a debt allocation within portfolios, rather than a growth asset. Rajani emphasized that ETFs provide the most effective investment method, eliminating storage issues and associated costs, and generally remaining more economical than fund-of-funds.
