Top Gold ETF vs Popular Gold Investment: Where has Rs 10 lakh grown faster in 6+ years; historic data may surprise you
Top Gold ETF vs Top SGB: Gold ETFs are like any other ETF that can be bought and sold on the stock exchange. They follow the price of the pure domestic gold. Gold ETFs are represented by 99.5 per cent pure physical gold bars. Issued by the Reserve Bank of India (RBI), SGBs are government securities denominated in grammes of gold. Investors can pay in cash to buy and redeem them in cash.
Top Gold ETF vs Top SGB: Investing in gold in its physical form is a popular way. But if someone aspires to take advantage of gold price appreciation but wants to avoid having it in its physical form? For them, there can be options such as gold exchange-traded funds (Gold ETFs) and Sovereign Gold Bonds (SGBs). Both represent gold's digital form and track its prices. Know what the differences are between the two; which has been the best ETF and the best SGB since January 1, 2018 (the day the top-performing SGB was launched), and which of them has given a higher return on a Rs 10 lakh investment ever since.
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What are gold ETFs?
Gold ETFs are like any other ETF that can be bought and sold on the stock exchange. They follow the price of the pure domestic gold. Gold ETFs are represented by 99.5 per cent pure physical gold bars.
What are gold ETFs?
The basic difference between physical gold and gold ETFs is that the price of physical gold can vary in different cities, but the price of ETF remains the same throughout India. One Gold ETF unit is equal to 1 gramme of gold.
What are sovereign gold bonds (SGB)?
Issued by the Reserve Bank of India (RBI), SGBs are government securities denominated in grammes of gold. Investors can pay in cash to buy and redeem them in cash. The maturity period in SGBs is 8 years, but investors also get the early exit option after 5 years.
What are sovereign gold bonds (SGB)?
SGBs are issued in denominations of one gramme of gold and in multiples. The minimum investment in SGBS is 1 gramme, while the maximum limit of subscription is 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities.
Best SGB in terms of performance
The top SGB in terms of performance since inception is Sovereign Gold Bond Scheme 2017-18 – Series XIV 2.50%. The SGB, launched on January 1, 2018, has given 170.7 per cent absolute returns since its inception.
Best SGB in terms of performance
The SGB's issue price was Rs 2,881, while its current price is Rs 7,799.00. The bond matures on January 1, 2026. It has a yield of 0.92 per cent, while its coupon rate is 2.50 per cent.
Best gold ETF in 10 years
Since the launch date of the top SGB was January 1, 2018, we will take that as the date to count the return of the top gold ETF. The top gold ETF from that date has been Axis Gold Fund - Direct Plan. It has given 14.48 per cent annualised returns since January 2018.
Best gold ETF in 10 years
Nearly 12-year-old gold ETF has asset under management (AUM) of Rs 556 crore, while its net asset value (NAV) is Rs 24.3645. The ETF has given 6.67 per cent annualised returns (CAGR) since its inception in January 2013. At an expense ratio of 0.17 per cent, the fund has Rs 100 as the minimum SIP and lump sum investments.