Gold ETFs Gave High Returns; Rs.10,000 Monthly SIP Grows to more than Rs.9 Lakh in 5 Years
In the past five years, Gold Exchange-Traded Funds (ETFs) have provided very good returns. If an investor had invested Rs.10,000 every month through a SIP, then they would have made more than Rs.9 lakh now, according to a report. There are around 11 gold ETFs in the market for five years doing strong growth.
LIC MF Gold ETF delivered Rs.9.28 lakh on a total investment of Rs.6 lakh with a return rate of 17.71%. UTI Gold ETF made Rs.9.24 lakh with a return rate of 17.54%.
Other ETFs also performed very well, HDFC Gold ETF and Axis Gold ETF turned same SIP amount into Rs.9.21 lakh and Rs.9.19 lakh, respectively. While Aditya Birla Sun Life Gold ETF and Kotak Gold ETF both made Rs.9.16 lakh with a return rate of 17.19% and 17.18% respectively.
Quantum Gold Fund ETF delivered Rs.9.15 lakh and SBI Gold ETF made Rs.9.14 lakh over five years. The largest gold ETF based on AUM, Nippon India ETF Gold BeES made Rs.9.12 lakh with the same investment amount, achieving return rate of 17%. As of January 31, 2025, this fund handled assets worth Rs.16,975 crore.
Increased Investments in Gold ETFs
Gold ETFs saw a huge rise in investments in January 2025, with Rs.3,751 crore coming in, this is almost a 486% rise from the Rs.640 crore invested in December. Experts stated that investors move towards gold when there is fluctuations in the market or geopolitical tensions.
Gold ETFs, gold funds, or multi-asset funds are mostly recommended as a part of balanced investment plan, not for making quick profits. After the pandemic, the prices of gold have increased a lot. The value of gold increases when the rupee becomes weak as the gold is priced in U.S. dollars. Experts suggest that gold should be used for diversifying investments and not for gambling on price changes.
Impact of Market Conditions and Interest Rate Expectations
The recent ups and downs in the global and domestic market made investors to choose gold ETFs. The increased economic problems and world tensions resulted in the higher demands for these funds. Falling interest rates also make gold a more attractive investment. Prospects of additional rate cuts by major central banks, such as the U.S. Federal Reserve, lower the cost of holding gold, enhancing its attractiveness as a safe asset.
Since gold remains a popular pick in times of uncertainty, experts recommend that investors hold it as part of an equally diversified asset allocation strategy and not as the sole bet on speculative returns.
