Top Gold ETF vs Physical Gold in 10 Years: Which has given higher return on Rs 10 lakh investment? See examples
Top Gold ETF vs Physical Gold in 10 Years: Gold's charm is everlasting. Its glitter has attracted masses since ages. People use it as ornaments, investors as investments, and indexes as benchmarks. However, in the modern world, it is not limited to its physical form. The digitised form of gold is getting prominance fast as it has emerged as a source of investment. People who don't want to carry gold in its physical form but want to take advantage of its price appreciation prefer it in the digital form. Gold exchange traded funds (ETFs) are its digitised form that track the price of pure physical gold and are traded like stocks in the share market. Know more about physical gold and gold ETF in this article, and know which of the two investments has given a higher return on a Rs 10 investment each in 10 years.
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What is physical gold?
Physical gold is bought in the form of jewellery, coins, and bars. Individuals buy it for personal use and as price possession. It can be purchased from jewellers shops, mints, and precious metal dealers.
What is physical gold?
Pure gold is 99.90 per cent pure. People also buy gold as an investment since its price increases in the long run. Gold, at times, has provided handsome returns in just a couple of years.
What is gold ETF?
Gold ETFs are passive investments that track the domestic physical gold price and invest in gold bullion.
What is gold ETF?
One needs to have a Demat account to trade ETFs. These ETFs can be purchased and sold on BSE and NSE.
Historical price of gold
As per BankBazaar.com, the price of 24k (99.9 per cent) pure gold in 2014 was Rs 28,006.50. The gold price today (Tuesday, September 24, 2024) is 76,835.00.
Top-performing ETF in 10 years
The top-performing gold ETF in the last 10 years has been LIC MF Gold ETF.
LIC MF Gold ETF
The ETF has given 10.07 per cent annualised returns (CAGR) in 10 years (As per Value Research data).
Its assets under management (AUM) are Rs 137 crore, while its net asset value (NAV) is Rs 6,773.1587.
The ETF that tracks the domestic price of gold has given 6.66 per cent annualised returns since its launch in November 2011.
LIC MF Gold ETF
With an expense ratio of 0.41 per cent, the ETF has Rs 10,000 as the minimum investment.
The ETF's 99.44 per cent investments are in equity, while 0.56 per cent are in cash and cash equivalents.
Top gold ETF vs physical gold: Which has given more on Rs 10 lakh investment in 10 years?
At Rs 28,0006.50/10g, a Rs 10 lakh investment in 2014 would have brought estimated 357.05 grammes of gold.
The current estimated price of 357.05 grammes of gold is Rs 27,43,393.675.
Top gold ETF vs physical gold: Which has given more on Rs 10 lakh investment in 10 years?
It means the estimated growth of Rs 10 lakh investment in physical gold is Rs 17,43,393.675.
Top gold ETF vs physical gold: Which has given more on Rs 10 lakh investment in 10 years?
On the other hand, at 10.07 per cent annualised return, the value of Rs 10,000,00 investment in LIC MF Gold ETF is Rs 26,10,295.44.
It means the estimated growth of the investment in 10 years is Rs 16,10.295.44.