Gold ETFs with Low Tracking Error - February 2026

Gold exchange-traded funds (ETFs) are investment instruments that aim to mirror the domestic price of physical gold by holding gold bullion or gold-related assets. Since they are traded on stock exchanges like shares, investors can gain exposure to gold prices without dealing with storage or purity concerns associated with physical gold.

One important factor used to evaluate gold ETFs is tracking error, which measures how closely a fund’s returns match the performance of the underlying gold price. Differences may arise due to fund expenses, cash holdings, or operational factors. In this article, find the best Gold ETFs with low tracking error in February 2026. 

Gold ETFs with Low Tracking Error

Note: The Gold ETFs listed here are as of February 11, 2026.

Overview of Gold ETFs with Low Tracking Error

1. SBI Gold ETF 

The scheme invests in physical gold and gold-linked instruments with the objective of closely tracking domestic gold prices. Its units are listed on the National Stock Exchange and can be traded like equity shares. The fund aims to deliver returns that largely mirror the movement in gold prices by investing primarily in physical gold.

Key Metrics

• 3yr CAGR: 40.3%
• 5yr CAGR: 26.05% 

2. Kotak Gold ETF

Kotak Gold ETF is an open-ended exchange traded fund that invests in physical gold with the objective of closely tracking the domestic spot price of gold.

Key Metrics

• 3yr CAGR: 38.26%
• 5yr CAGR: 25.44%

3. HDFC Gold ETF 

HDFC Gold ETF is an exchange-traded fund designed to mirror the performance of gold, offering investors a simple and efficient way to gain gold exposure in digital form. It removes the hassles of physical storage while assuring the purity and quality of the underlying gold.

Key Metrics

• 3yr CAGR: 41.11%
• 5yr CAGR: 26.11%

4. UTI Gold Exchange Traded Fund 

UTI Gold ETF is an open-ended scheme that aims to replicate and track the performance of gold. The fund seeks to deliver returns, before expenses, that closely correspond to the price and yield of gold. However, due to tracking error, the scheme’s performance may differ from that of the underlying asset, and there is no assurance that the investment objective will be fully achieved. 

Key Metrics

• 3yr CAGR: 40.49%
• 5yr CAGR: 26%

5. Quantum Gold Fund

The Quantum Gold Fund (QGF) invests in physical gold and provides investors with a simple, cost-effective way to gain exposure to gold without the burden of making charges or storage concerns.

Key Metrics

• 5yr CAGR: 26.11%
• 3yr CAGR: 40.53%

How to Choose the Right Gold ETF?

When evaluating gold ETFs with low tracking error, consider the following:

• Expense ratio: Lower cost typically means lower tracking deviation.
• Liquidity: Higher average daily volumes support tighter bid-ask spreads.
• AUM: Larger funds often manage operations more efficiently.
• Historical tracking difference: Compare ETFs over multiple periods to assess consistency.

Conclusion

Gold ETFs with relatively low tracking error can serve as a way to gain exposure to gold prices while maintaining transparency and liquidity. However, investors should remember that several funds may offer comparable features, and performance may vary over time, making it important to periodically review available options, fund metrics, and personal investment objectives before choosing a suitable investment avenue.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private 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.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.