The sharp rise in gold and silver prices has encouraged many investors to increase their exposure to these metals through Exchange-Traded Funds (ETFs). These ETFs are offered by SEBI-registered asset management companies and allow investors to buy units that reflect the market value of gold or silver.

Since the NAV of these ETFs moves with global prices, mainly those from the London Bullion Market Association (LBMA), they often differ from domestic spot prices. Factors like tracking error and expense ratio also affect returns.

What Investors Should Know Before Investing

Gold and silver ETFs can be volatile. It is advisable for investors to study the fund’s tracking error, costs, and past performance before investing. Long-term investment tends to give better results, so checking performance over several years helps understand consistency.

Performance of Top Gold and Silver ETFs

According to news reports:

Top Gold ETFs

3 major gold ETFs—HDFC Gold ETF, Kotak Gold ETF, and Nippon India Gold BeES, have given more than 17% returns in the last 5 years. Their 1-year returns are around 50%, with 3-year returns above 32%.

Top Silver ETFs

2 popular silver ETFs, ICICI Prudential Silver ETF and Nippon India Silver ETF, delivered around 35% returns over 3 years. The price of physical silver rose roughly 29% during the same period.

Physical Metal Returns

• Gold: 52% (1-year), 34% (3-year), 19% (5-year)
• Silver: 49% (1-year), 29% (3-year)

Read More: SEBI Digital Gold Advisory: Do Investors Need to Worry?

Market Trends and Inflows

The report highlights strong inflows into gold ETFs. Year-to-date inflows stand at $65 billion, with almost $20 billion added in the last 3 months. Central banks and institutional buyers have consistently increased their gold holdings since 2021–22.

Investment Caution

Past performance does not guarantee future returns. Investors should assess risks, understand market movements, and consult financial advisors or registered fund managers before investing in precious metal ETFs.

Conclusion

Gold and silver ETFs have delivered impressive returns due to rising global metal prices. While they offer a convenient way to invest in precious metals, investors should review risk factors, fund performance, and market trends before taking any position.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.