Gold ETF vs Nifty 500 Calculator: Where Rs 10 lakh investment has grown faster in 10 years; know calculations

Gold ETF vs Nifty 500: Gold investment garners significant attention during festivals of Dhanteras and Diwali. Investors majorly invest in physical gold, but investment is gold ETFs, gold mutual funds, and Sovereign Gold Bond (SGB) are also popular digital investment options.

Gold Exchange Traded Funds (ETFs) are a type of mutual funds which can be traded in a share market like any other stock. 

Nifty 500, on the other hand, is the index of India's top 500 companies in terms of highest market capitlalisation and the average daily turnover.

Unlike Nifty 50, Nifty 500 does not have futures to trade in the market, so investment in it isn't possible.

But it can always be shown as a benchmark to compare the performance of any asset class. 

In this write-up, know more about gold ETF and Nifty 500, and based on their annualised performance, know where the value of Rs 10 lakh investment has increased faster.

Gold ETF vs Nifty 500: Gold ETF

A gold ETF is a form of digital gold. It tracks the price of 99.5 per cent  pure gold.

One gold ETF unit is equal to 1 gramme of physical gold.

It is a good investment option for investors who don't want to invest in physical gold but want to take the benefit of its price appreciation.

The other benefit of investing in a gold ETF is that there are no premium or making charges on it, so investors save money compared to when they invest in physical gold.

Apart from that, purity of gold in ETF is also guaranteed.

The price of the net asset value (NAV) of a gold ETF keeps changing throughout the trading session, unlike the price of a normal mutual fund NAV, which is set at market close.    

Gold ETF vs Nifty 500: Nifty 500

Nifty 500 is a broad-based share market index that represents India's top 500 companies in terms of highest market capitalisation and average daily turnover.

Five hundred firms in the index are disintegrated into 72 industry indices.

The weight of an industry in the index reflects its weight in the market.

The index has some of India's top large, mid, and small cap companies.

They are from sectors such as banking, consumer goods, pharma, chemicals, oil and gas, IT, textiles, etc. The index shows stable performance in the long run.  

Gold ETF vs Nifty 500: Top gold ETF in 10 years

As per GoalTeller, an investment firm, SBI Gold ETF has been the top performer gold ETF in the 10-year period.

Its direct plan has given 10.15 per cent annualised returns in 10 years, while its regular plan has given 9.68 per cent annualised returns in the same period.  

Gold ETF vs Nifty 500: Nifty 500's performance in 10 years

GoalTeller says the annualised return of Nifty 500 in the 10-year period is 12.90 per cent. 

Gold ETF vs Nifty 500: Value of Rs 10 lakh investment in top gold ETF in 10 years

On a Rs 10 lakh investment made in October 2014, the direct plan of SBI Gold ETF has given estimated Rs 26,30,003.89 in total. 

On the other hand, its regular plan has given estimated Rs 25,18,518.52 in total on investing Rs 10 lakh.

Gold ETF vs Nifty 500: Value of Rs 10 lakh in Nifty 500 in 10 years

Since Nifty 500 doesn't have its own futures, an investor can invest only in Nifty 500 companies.

But if we look at its performance of Nifty 500 and hypothetically calculate maturity on a Rs 10 lakh investment made 10 years ago, the current value of that investment is Rs 33,65,744.20.