Best Gold Mutual Funds to Invest in India

Gold mutual funds and ETFs offer a simple way to participate in gold’s rally without worrying about lockers, purity or making charges. These funds either buy physical gold directly through an ETF or invest in another gold ETF on your behalf, while you hold units in your Demat or mutual fund account.​

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How gold mutual funds work

Gold mutual funds (also called gold savings funds or FoFs) usually invest in one underlying gold ETF that holds 99.5%+ purity physical gold stored with a custodian.​

Returns broadly track domestic gold prices, but there can be a small tracking error because of expenses and cash holdings.​

For most investors, these funds become a hedge in the portfolio – they tend to do well when inflation is high, the rupee is under pressure, or equity markets are volatile.​

Quantum Gold Savings Fund

Quantum Gold Savings Fund is a fund‑of‑funds that mainly buys units of Quantum Gold ETF, which in turn holds physical gold bars in secure vaults. For someone who doesn’t want to open a Demat account but still wants an ETF‑like gold exposure, this route is convenient because the investment and redemption happen like any normal mutual fund.​

With an AUM of around ₹357 crore, it is a relatively compact scheme, which helps the manager keep the portfolio straightforward and liquid. The expense ratio in the regular plan stays on the lower side for its category, and over the past one year the fund has delivered a strong return of about 78% in line with gold’s sharp rally.​

UTI Gold ETF

UTI Gold ETF is a classic gold ETF that holds 99.5% purity gold; each unit represents a small fraction of a gram of gold. Because it trades on the stock exchanges just like a share, investors who already use a Demat account often prefer this option to accumulate gold steadily.​

The scheme has been around since 2007, which means it has seen several cycles of gold prices, currency moves and policy changes. With AUM above ₹3,000 crore and a competitive expense ratio, it has enough liquidity for most retail investors, while the 1‑year return of roughly 78% reflects how closely it has tracked the underlying metal.​

Aditya Birla Sun Life Gold Fund

Aditya Birla Sun Life Gold Fund is a gold savings fund that invests primarily in Aditya Birla Sun Life Gold ETF. From an investor’s point of view, this means you can do SIPs or lumpsum investments without worrying about buying the ETF directly or handling exchange trades.​

The fund’s AUM is over ₹1,100 crore, which shows there is healthy participation from retail investors in this scheme. Its expense ratio in the regular plan is moderate, and the 1‑year return in the high‑70% range mirrors the move in gold while offering an easy entry point for first‑time investors.​

Quantum Gold Fund ETF

Quantum Gold Fund is the underlying ETF used by Quantum AMC’s gold savings fund, and it directly holds physical gold on behalf of unitholders. Since it is an ETF, units are bought and sold on the stock exchange, so investors need a Demat and trading account to use it efficiently.​

The fund has been listed since 2008 and focuses purely on tracking domestic gold prices, without taking any view on currencies or mining stocks. Its AUM is a little over ₹500 crore, and the recent one‑year return of about 77–78% highlights the tight linkage with the metal after fund costs.​

ICICI Prudential Gold ETF

ICICI Prudential Gold ETF is one of the largest gold ETFs in India with an AUM of around ₹13,600 crore. Size here works as an advantage because it usually translates into better trading volumes and narrower bid‑ask spreads for investors buying or selling on the exchange.​

The fund’s stated benchmark is the domestic price of gold/LBMA AM fixing in INR, and it has delivered about 77–78% return over the last year while maintaining a reasonable tracking error. The expense ratio of 0.5% is in line with other large gold ETFs, making it a popular core holding for investors who prefer a liquid and transparent product.​

Aditya Birla Sun Life Gold ETF

Aditya Birla Sun Life Gold ETF directly owns gold bars that meet international purity and delivery standards, and it aims to mirror domestic gold prices as closely as possible. Because it is an ETF, pricing is visible throughout the trading day, which appeals to investors who like intraday flexibility.​

The fund’s AUM is close to ₹1,900 crore with an expense ratio in the sub‑0.5% range, keeping overall costs competitive. Its one‑year return sits comfortably in the mid‑ to high‑70% band, broadly matching the move in gold prices during the period.​

Invesco India Gold ETF

Invesco India Gold ETF tracks the price of gold by investing in physical gold of prescribed fineness and standard bars stored in custodial vaults. For investors, this provides a way to allocate to gold through the stock market without storage worries or making‑charge leakage.​

The ETF has a more modest AUM of under ₹500 crore as per the dataset, but it still offers adequate liquidity for small and medium‑ticket investors. The expense ratio is around 0.55%, and the one‑year return of about 77–78% shows that it has broadly captured the gold uptrend.​

Axis Gold ETF

Axis Gold ETF focuses solely on physical gold exposure and does not mix in mining or derivative strategies, which makes its behaviour easier to understand. Each unit is backed by gold of specific purity stored with a reputed custodian, with the fund aiming to follow domestic gold prices.​

With AUM above ₹3,000 crore and an expense ratio near 0.56%, it sits in the mainstream bucket of gold ETFs in terms of cost. The past year’s return of roughly 77–78% keeps it in line with peers, so investors usually differentiate it based on comfort with the Axis brand and trading spreads on their preferred exchange.​

SBI Gold Fund

SBI Gold Fund is a fund‑of‑funds that channels money into SBI Gold ETF, giving the same underlying exposure without needing a Demat account. For investors who already use SBI’s mutual fund or banking platforms, this becomes a straightforward way to add a gold allocation via SIPs.​

An interesting point is that the scheme tracks the LBMA gold price (London) converted to INR, rather than only local futures, which offers a slightly different flavour of diversification. The regular plan’s expense ratio, at around 0.35%, is quite low for a gold FoF, helping the fund deliver around 77% return over the last year as per the given numbers.​

Kotak Gold ETF

Kotak Gold ETF is one of the older gold ETFs in the market, having started operations back in 2007. Longevity brings a long performance history across multiple bull and bear phases in both gold and equity markets, which many seasoned investors value.​

The fund manages over ₹11,000 crore in assets, and its expense ratio is around 0.55%, again in line with most large ETFs. The recent one‑year return of about 77% shows that it has closely followed the domestic gold price, making it a sturdy option for long‑term asset allocation.

Conclusion

To sum up, a Gold ETF offers a simple and efficient way to add stability to your portfolio. It provides exposure to gold without the challenges of storage, purity or liquidity, while helping balance risk during uncertain market phases. Used wisely alongside equities, a Gold ETF can act as a steady hedge and support long-term wealth preservation.