Gold ETFs with Low Tracking Error – March 2026

Gold Exchange-Traded Funds (ETFs) are investment products designed to track the domestic price of physical gold by investing in gold bullion or related instruments. As these ETFs trade on stock exchanges like regular shares, investors can participate in gold price movements without worrying about storage, security, or purity issues associated with holding physical gold.

A key metric used to assess gold ETFs is tracking error, which indicates how closely a fund’s returns align with the performance of its benchmark, typically domestic gold prices. In this article, find the best Gold ETFs with low tracking error for March 2026. 

Gold ETFs with Low Tracking Error – March 2026

Note: The Gold ETFs listed here are as of March 4, 2026.

Overview of Gold ETFs with Low Tracking Error

1. 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%

2. SBI Gold ETF 

The scheme from SBI Mutual Fund invests in physical gold and gold-linked instruments with the objective of closely tracking domestic gold prices. 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% 

3. 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: 42.53%
• 5yr CAGR: 28.61%

4. 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: 26.87%
• 3yr CAGR: 40.42%

5. 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.

Key Metrics

• 3yr CAGR: 40.49%
• 5yr CAGR: 26%

How to Choose the Right Gold ETF?

While checking gold ETFs with low tracking error, investors may evaluate the following factors:

• Expense Ratio: Funds with lower costs generally tend to have lower tracking deviation over time.
• Liquidity: Higher trading volumes usually result in narrower bid-ask spreads, making entry and exit more efficient.
• Assets Under Management (AUM): Larger funds often benefit from operational efficiencies and better cost management.
• Historical Tracking Difference: Reviewing performance consistency across multiple timeframes can provide insight into how effectively a fund mirrors gold prices.

Also Read: Quant Mutual Fund Raises Cash Levels, Stays Constructive on Large Caps Amid Volatility!

Conclusion

Gold ETFs with comparatively low tracking error can offer a way to gain exposure to gold while ensuring liquidity and transparency. However, as multiple funds may offer similar characteristics and tracking performance may change over time, investors should regularly review fund metrics, costs, and their own financial goals before making investment decisions.

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.