Investing in gold has always been a popular strategy, especially during uncertain times. While buying physical gold comes with storage and safety concerns, Gold ETFs offer a smart, digital alternative. These funds allow investors to benefit from changes in gold prices without actually holding physical gold. Among many factors to consider when choosing a gold ETF, tracking error is one of the most important.
Tracking error is the difference between the returns of the gold ETF and the actual price of gold. The lower the tracking error, the better the ETF has performed in matching gold prices. This makes it a key indicator for investors.
Below are some of the top-performing gold ETFs in India based on their tracking error for direct plans:
| Ranking | Scheme Name | Tracking Error (%) |
| 1 | UTI Gold Exchange Traded Fund | 0.14 |
| 2 | Quantum Gold Fund | 0.15 |
| 3 | Axis Gold ETF Fund | 0.22 |
| 4 | ICICI Prudential Gold ETF | 0.22 |
| 5 | LIC MF Gold Exchange Traded Fund | 0.22 |
| 6 | Nippon India ETF Gold BeES | 0.22 |
| 7 | SBI Gold ETF | 0.22 |
Choosing a gold ETF with low tracking error means you’re getting a product that closely follows the price of gold. Over time, this ensures better returns compared to high-tracking-error funds, especially during volatile market conditions.
If you're considering long-term gold investments for wealth protection or diversification, these ETFs can be a solid choice.
Read more: Upcoming NFOs in August 2025: Baroda BNP Paribas Gold ETF FoF NFO Opens August 4, 2025.
If you're looking to invest in gold without the hassle of physical storage, gold ETFs offer an efficient and safe alternative. Among them, UTI Gold ETF and Quantum Gold Fund stand out among investors due to their low tracking errors. These funds aim to mirror the price of physical gold and are backed by 99.5% pure gold, giving investors exposure to the yellow metal without worrying about purity or storage. They are listed on stock exchanges, so you can buy and sell them easily through your demat account, just like shares.
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.
Published on: Aug 7, 2025, 10:43 AM IST
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