Best Gold Mutual Funds in India

From weddings to religious occasions, gold is an integral part of customs and rituals in India. Apart from holding a sentimental value, gold has been a preferred investment avenue for Indian households for ages. Today, investing in gold has become easy through investment vehicles like gold funds. In this article, we will look at the best gold mutual funds that you can invest in and how they can help your portfolio.

Best Gold Mutual Funds 2025

Gold mutual funds invest directly or indirectly in gold bullion or gold-related assets. These assets are linked to the price of gold and include instruments like exchange-traded funds (ETFs), gold futures & options, and gold mining companies.

Here are the best gold mutual funds based on their 3-year annualised returns.

(Data as of February 7, 2025)

Overview of the Best Gold Mutual Funds in India

(Please note, the data is as of February 7, 2025)

LIC MF Gold ETF FoF Direct - Growth

•       3Y Annualised Returns – 20.51%
•       Carries high risk
•       Assets Under Management (AUM) – Rs 71.63 crore
•       Minimum SIP amount – Rs 200
•       Holdings include LIC MF Gold ETF
•       Expense Ratio – 0.20%
•       Inception Date – January 1, 2013

Aditya Birla Sun Life Gold Fund

•       3Y Annualised Returns – 19.85%
•       Carries high risk
•       AUM – Rs 428.10 crore
•       Minimum SIP amount – Rs 100
•       Holdings include Aditya Birla Sun Life Gold ETF
•       Expense Ratio – 0.20%
•       Inception Date – March 20, 2012

Axis Gold Direct Plan - Growth

• 3Y Annualised Returns – 19.79%
• Carries high risk
• AUM – Rs 706.42 crore
• Minimum SIP amount – Rs 100
• Holdings include Axis Gold ETF - Growth
• Expense Ratio – 0.17%
• Inception Date – January 1, 2013

SBI Gold Direct Plan - Growth

• 3Y Annualised Returns – 19.79%
• Carries high risk
• AUM – Rs 2,583.37 crore
• Minimum SIP amount – Rs 500
• Holdings include SBI Gold ETF
• Expense Ratio – 0.10%
• Inception Date – January 1, 2013

Invesco India Gold ETF FoF Direct - Growth

• 3Y Annualised Returns – 19.73%
• Carries high risk
• AUM – Rs 114.20 crore
• Minimum SIP amount – Rs 500
• Holdings include Invesco India Gold ETF
• Expense Ratio – 0.10%
• Inception Date – December 5, 2011

 HDFC Gold ETF Fund of Fund Direct Plan - Growth

• 3Y Annualised Returns – 19.72%
• Carries high risk
• AUM – Rs 2,765.21 crore
• Minimum SIP amount – Rs 100
• Holdings include HDFC Gold ETF
• Expense Ratio – 0.18%
• Inception Date – January 1, 2013

  Quantum Gold Savings Fund Direct - Growth

• 3Y Annualised Returns – 19.70%
• Carries high risk
• AUM – Rs 140.35 crore
• Minimum SIP amount – Rs 500
• Holdings include Quantum Gold Fund
• Expense Ratio – 0.03%
• Inception Date – May 19, 2011 

Nippon India Gold Savings Fund Direct - Growth

• 3Y Annualised Returns – 19.52%
• Carries high risk
• AUM – Rs 2,203.20 crore
• Minimum SIP amount – Rs 100
• Holdings include Nippon India Gold ETF BeES
• Expense Ratio – 0.14%
• Inception Date – January 1, 2013 

ICICI Prudential Regular Gold Savings (FOF) Direct - Growth

• 3Y Annualised Returns – 19.46%
• Carries high risk
• AUM – Rs 1,385.31 crore
• Minimum SIP amount – Rs 100
• Holdings include ICICI Prudential Gold ETF
• Expense Ratio – 0.09%
• Inception Date – October 1, 2011 

Kotak Gold Fund Direct - Growth

• 3Y Annualised Returns – 19.33%
• Carries high risk
• AUM – Rs 2,291,35 crore
• Minimum SIP amount – Rs 100
• Holdings include Kotak Gold ETF
• Expense Ratio – 0.16%
• Inception Date – January 1, 2013

Why Invest in Gold Mutual Funds?

Here are several benefits of investing in gold funds. Let’s take a close look at how investing in one can help investors.

Diversification

Diversifying one’s portfolio is a great way to mitigate risks and stabilise returns. Along with diversifying across sectors and stocks, investors can also diversify by investing in multiple asset classes such as gold. Investing in a gold mutual fund can help investors achieve this goal.

Ease and Convenience

Although investing in gold can be a fruitful activity, this traditional way of investing holds several challenges. A gold mutual fund solves these challenges by allowing investors to digitally invest in gold and gold-related assets. Further, a gold mutual fund also eliminates the need to physically store gold.

Professional Management

A key hurdle that many investors face is deciding when to buy or sell a particular asset. Since gold mutual funds are managed by professional fund managers, investors do not have to make these key decisions.

Investing Through SIP

Investors can invest in a gold mutual fund through a systematic investment plan (SIP). An SIP eliminates the need for a large capital, making investing easy. One can begin their investment journey with as little as Rs 100. Moreover, SIP offers high flexibility and a better cost-price average.

Key Limitations of Gold Mutual Funds

Similar to most investments, gold mutual funds have several limitations too.

• The value of gold mutual funds is typically linked to the value of gold which can be highly volatile. Several micro- and macroeconomic factors can impact the value of the yellow metal.
• Since gold mutual funds are managed by professional fund managers, they may not be suitable for investors who want to be more proactive in their decision-making process and prefer a more hands-on approach.

Conclusion

The best gold mutual funds can be suitable options for investors looking to widen their asset allocation and diversification. Additionally, they can also be viable investment options for those looking to invest in physical gold as gold mutual funds solve the challenges of investing in physical gold. While investing, it is important to compare the different gold funds and understand the factors that can impact the value of gold prices.

 Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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Research Analyst - Bavadharini KS