
Up 29% in 5 months! Should you invest or avoid gold mutual funds?
based funds and ETFs together have offered an average return of 29.11% in the current calendar year so far. There were around 32 funds including both gold funds and gold ETFs in the said time period.
LIC MF
Gold ETF
FoF offered the highest return of around 30.14% in the current calendar year so far, followed by
UTI Gold ETF
which gave 29.75% return in the same period.SBI Gold
ETF
gave 29.37% return in the same period.
Zerodha Gold ETF
delivered a return of 29.28% in the said time period.
Play Video
Pause
Skip Backward
Skip Forward
Unmute
Current Time
0:00
/
Duration
0:00
Loaded
:
0%
0:00
Stream Type
LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
1x
Playback Rate
Chapters
Chapters
Descriptions
descriptions off
, selected
Captions
captions settings
, opens captions settings dialog
captions off
, selected
Audio Track
default
, selected
Picture-in-Picture
Fullscreen
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text
Color
White
Black
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Text Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Transparent
Caption Area Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Transparent
Semi-Transparent
Opaque
Font Size
50%
75%
100%
125%
150%
175%
200%
300%
400%
Text Edge Style
None
Raised
Depressed
Uniform
Drop shadow
Font Family
Proportional Sans-Serif
Monospace Sans-Serif
Proportional Serif
Monospace Serif
Casual
Script
Small Caps
Reset
restore all settings to the default values
Done
Close Modal Dialog
End of dialog window.
Best MF to invest
Looking for the best mutual funds to invest? Here are our recommendations.
View
Details
»
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Most Cat Parents Miss This About Their Aging Cats
Dr. Marty
Click Here
Undo
Also Read |
ITC and Cochin Shipyard among stocks that Quant Mid Cap Fund bought and sold in May
Invesco India Gold ETF FoF and Groww Gold ETF FOF gave 28.34% and 28.14% returns respectively in the current calendar year so far.
Experts attribute this surge to a combination of global economic and geopolitical factors such as geopolitical uncertainty and central bank buying.
Live Events
'Gold prices have rallied in recent times due to a combination of global economic and geopolitical factors such as rising tensions globally, such as conflicts in the Middle East, and Trump tariffs, have increased demand for gold as a safe-haven asset and several countries, including China and India, have been aggressively adding gold to their reserves to diversify away from the US dollar and enhance financial security,' Shweta Rajani, Head -
Mutual Funds
, Anand Rathi Wealth Limited shared with ETMutualFunds.
The expert further shared country wise gold purchases over the years and mentioned that with India seeing a huge jump to 72.6 tonnes of gold in 2024, the highest annual purchase in this three-year period and a 347% increase from 2023 and this sharp rise indicates a strategic focus on gold as a reserve asset, aligning with global trends of de-dollarization and building resilience due to the geopolitical and economic uncertainties.
Echoing a similar opinion, another expert mentions that fresh investments should be made cautiously. 'Gold has rallied due to rising global geopolitical tensions and increased central bank buying early in the year. While it has given strong YTD returns, fresh investments should be made cautiously, as much of the rally may already be priced in,' Shruti Jain, Chief Strategy Officer, Arihant Capital Markets told ETMutuaFunds.
Quant Mutual Fund, in a recent note, highlighted that gold may be due for a short-term correction of 12-15% in dollar terms over the next two months. The fund house cautioned investors that the metal may have "peaked out" in the short term, noting that while
gold prices
have surged recently, the momentum could slow down, and a retracement in prices could be on the horizon.
While commenting on whether one should increase their gold investment or wait for further correction, Jain advises that after this steep run-up, it's better to wait for a dip before adding more and gold should ideally make up 3–5% of the total portfolio as a diversification and risk-hedging tool.
On the other hand, Shweta Rajani suggests investors to maintain a balanced portfolio, with an asset allocation of 80:20 in equity to debt but if one wants exposure to gold, it should not exceed 5-10% of their portfolio.
Also Read |
Eternal and Vedanta among stocks which Edelweiss Mutual Fund bought and sold in May
'Gold should be treated as a defence asset, with maximum exposure at 20%. Combined allocation to gold and debt should not exceed 20% of the overall portfolio to maintain growth potential,' she added.
Amid safe-haven buying triggered by Israel-Iran tensions and weakness in the dollar index, gold August futures contracts on the MCX opened sharply higher by Rs 2,011 or 2.04%, crossing the Rs 1 lakh mark to trade at Rs 1,00,403 per 10 grams on last Friday, according to a report by ETMarkets
By attributing the recent gold rally to mainly driven by demand and supply, not underlying fundamental metrics, the expert from Anand Rathi Wealth mentions that investing in Gold through SIP is not the best option for investors. They would generate a better return investing in equity mutual funds.
She further shared that if an investor does an SIP in Gold ETFs and another investor does an SIP in 5 diversified equity mutual funds, the XIRR return for gold is 12.53%, whereas for an equity mutual fund portfolio, it is almost 15%.
Sharing a different opinion, Jain mentions that the rally is largely driven by geopolitical tensions and global factors, including safe-haven demand and foreign central bank purchases and having gold in your portfolio is always a good idea because it adds diversification and additionally it's also a good idea to invest via SIP to spread out your entry and manage risk.
In the last one year, gold based funds have offered up to 38.16% returns with an average return of around 37.16%. Tata Gold ETF offered the highest return of around 38.16% in the last one year, followed by UTI Gold ETF which gave 38.09% return in the same period.
Zerodha Gold ETF offered a 37.69% return in the last one year. Invesco India Gold ETF FoF gave the lowest return of around 35.61% in the last one year period.
Post looking at the last one year performance and current rally, Jain shared that Gold may face some pressure if geopolitical tensions subside and also there is news on selling by China. 'Expect it to trade in a range, and avoid aggressive buying at current highs,' she adds.
'Gold ETF holdings have declined in May 2025 to 930 tonnes compared to April 2025. However, the expectation is that the investors will continue to invest in yellow metal for portfolio diversification,' according to commodity communique by Tata Mutual Fund.
Also Read |
Deepak Shenoy's Capitalmind Mutual Fund files its first draft document with Sebi for a flexi cap fund
After analysing the different probabilities of CAGR of Nifty vs. Gold over different time frames, Shweta Rajani firmly says that Gold's ability to deliver high long-term returns significantly declines over time and the chance of earning over 12% CAGR from gold is just 0.58% over 10 years and drops to 0% over 15 years and despite similar volatility to equity, its long-term upside is limited, making it less rewarding on a risk-adjusted basis.
'When considering long-term wealth creation, Nifty maintains a much stronger probability of beating inflation and compounding wealth versus Gold, which have a higher standard deviation and lower risk adjusted return potential. As mentioned, gold is a defence asset like debt. Hence, the total allocation to gold and debt in your portfolio should not exceed 20%,' Shweta Rajani said.
Gold is considered a hedge against inflation and with global economic conditions remaining uncertain, gold is expected to retain its appeal as a hedge against market instability.
Gold ETFs are exchange-traded funds that track the price of physical gold. Each unit of a Gold ETF is backed by a specific quantity of gold, usually equivalent to one gram. They are listed on stock exchanges, and you need a demat and trading account to buy and sell them.
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on
ETMFqueries@timesinternet.in
alongwith your age, risk profile, and Twitter handle.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Mint
15 minutes ago
- Mint
Nvidia CEO Jensen Huang reveals America's ‘unique advantage' — Donald Trump seems to love it
Nvidia CEO Jensen Huang recently heaped praise on US President Donald Trump, saying that America has a 'unique advantage' by having him as its leader. Speaking on Wednesday at an AI summit in Washington, Huang said that no other country has that advantage — a compliment that Donald Trump seemed to like as he shared a video of the Nvidia CEO's talk on his Truth Social platform. 'America's unique advantage that no other country can possibly have is President Trump,' Huang said. In a chat at the AI Summit that was also attended by Trump, Huang said that the President realised the importance of AI and energy as soon as he took over his role at the White House. 'On the first day of his administration, he realised the importance of AI, and he realised the importance of energy. For the last I don't know how many years, energy production was vilified, if you guys remember,' he said. Donald Trump, since returning as President for the second time, has rallied for various energy projects, signing executive orders one of which requires 'the automatic rescission of outdated regulations to unleash American innovation and energy production'. 'We can't create new industries without energy. You can't reshore manufacturing without energy. You can't sustain a brand new industry like artificial intelligence without energy. If we decide, as a country, the only thing we want is IP—to be an IP-only, a services-only country—then we don't need much energy. But if we want to produce things, something as vital as artificial intelligence, then we need energy.' The AI summit at Washington also saw Donald Trump heaping praise on Huang. America's unique advantage that no other country can possibly have is President Trump. 'What a job you've done,' Trump said. Throughout his address, the president name-checked and complimented Huang for his investments in tech in the US. Huang met earlier this month with the president at the White House, and last week the company announced it would be allowed to resume selling its H20 artificial intelligence chips to China as part of a recent trade truce with Beijing. The Trump administration had previously frozen the sale of those chips to China.
&w=3840&q=100)

Business Standard
15 minutes ago
- Business Standard
India-US trade deal will be a game changer for investors: Arvind Panagariya
The proposed trade agreement between India and the United States could be a major breakthrough for India's investment climate, said Arvind Panagariya, chairman of the 16th Finance Commission. The deal, currently under negotiation, is expected to significantly liberalise India's trade regime and enhance the country's attractiveness for global investors, he said. 'This will be a big shot in the arm,' Panagariya stated during an interaction hosted at the Consulate General of India in New York this week. Agreement with EU likely to follow US deal Panagariya expressed optimism that the India-EU trade agreement would follow closely on the heels of the US deal. 'Once the India-US trade deal happens, the one with the European Union will also fall into place conveniently,' he said. 'These are the two largest markets. For any future investor, having open access to both will make India an extremely attractive destination.' The economist emphasised that reduced trade friction with the US and the EU would be a game changer, significantly lowering barriers for foreign companies looking to invest in or trade with India. Tariff cuts and liberalisation on the cards Regarding tariffs, Panagariya noted that the agreement would likely involve India lowering some of its duties. 'Potentially, a lot of good can come out of it. India will be reducing its tariffs as part of the process, which in itself is a tremendous opportunity,' he said. Panagariya said the most significant outcome of the trade deal would be domestic liberalisation. Improved access to the US market over competing nations would also be a major advantage. Trump administration signals deal is close US President Donald Trump has repeatedly stated that a trade agreement with India is imminent. As recently as last week, he remarked, 'We're very close to a deal with India, where they open it up.' He has reportedly set August 1 as a deadline for several countries, including India, to finalise trade agreements or face increased tariffs. Trade figures and future targets According to the latest figures, total goods trade between the US and India stood at $129.2 billion in 2024. US goods exports to India reached $41.8 billion, marking a rise of 3.4 per cent ($1.4 billion) from 2023. Meanwhile, goods imports from India totalled $87.4 billion, up 4.5 per cent ($3.7 billion) from the previous year. The resulting trade deficit stood at $45.7 billion. India and the US have also announced a new ambition, dubbed 'Mission 500,' which aims to more than double the bilateral trade to $500 billion by 2030. (With inputs from PTI, agencies)
&w=3840&q=100)

Business Standard
15 minutes ago
- Business Standard
Trump's immigration overhaul: What it means for H-1B and citizenship tests
The Trump administration is planning sweeping changes to the United States immigration system, including an overhaul of the H-1B visa programme for skilled foreign workers and a tougher citizenship test. The proposed reforms signal a renewed push to align immigration policy with the administration's economic and ideological goals. Joseph Edlow, newly confirmed director of US Citizenship and Immigration Services (USCIS), revealed the administration's plans in an interview with T he New York Times on Friday (local time). Edlow, who previously served in an acting capacity in 2020, now leads the agency overseeing work visas, citizenship certification, and asylum programmes. What is the H-1B visa? The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations requiring theoretical or technical expertise. These roles typically span fields such as technology, engineering and medicine. Each year, the government issues 85,000 new H-1B visas through a lottery system, including 20,000 reserved for individuals with advanced degrees from US institutions. The visa is widely used by the tech industry, which argues it is critical to filling talent gaps in a competitive global labour market. H-1B visa reform: High wages over lottery At the centre of the administration's plans is a revamp of the H-1B scheme. Edlow said the current randomised lottery process should be replaced with a system that prioritises employers offering higher wages. 'The way H-1B needs to be used… is to supplement, not supplant, the US economy and US workers,' Edlow said. He argued that prioritising higher-paid positions would help the programme better serve the national interest and reduce criticism from Republican hardliners who claim it suppresses American wages. Vice-President JD Vance added to that criticism this week, accusing firms of laying off domestic employees while hiring foreign workers. The proposed changes have drawn criticism from immigration policy experts, who argue that the H-1B programme is key to ensuring US companies can hire the best and brightest international graduates of US universities. Citizenship test: Return to tougher standards The administration is also preparing changes to the naturalisation test required of immigrants seeking US citizenship. Edlow said the current version is too easy and undermines the law's intent. 'It's very easy to kind of memorise the answers,' he said. 'I don't think we're really comporting with the spirit of the law.' Currently, applicants study 100 civics questions and must correctly answer six out of 10 during the test. Under Trump's first term, the test was toughened to include more questions and a higher passing threshold. Edlow said the administration plans to reinstate that version soon. US tightens asylum procedures USCIS under Edlow has already begun tightening asylum procedures, echoing policies from Trump's first term that had been partially blocked in court. While Edlow has ruled out reviving the controversial 'public charge' rule — which denied green cards to immigrants using public benefits — his approach has been consistent, with efforts to restrict access to permanent residency and citizenship unless it can be clearly linked to economic or national interest benefits. Edlow has also signalled that future policy decisions will focus on 'net positive' immigration. 'If we're looking at the people that are coming over… to advance certain economic agendas that we have and otherwise benefit the national interest — that's absolutely what we need to be taking care of,' he said. Donald Trump's US immigration agenda Since returning to office in January 2025, the Trump administration has moved swiftly to reshape the H-1B visa landscape. The Department of Homeland Security has proposed replacing the current lottery-based selection system with a wage-weighted model that would prioritise higher-paying job offers—a move aimed at aligning the visa programme more closely with the national economic interest. The proposal is currently under review by the Office of Management and Budget. Separately, Republican lawmakers have introduced legislation, the Colleges for the American People Act of 2025, that would eliminate long-standing exemptions allowing universities and non-profit research institutions to bypass the H-1B visa cap, meaning foreign academic staff could soon face the same restrictions as those in the private sector.