Gold ETFs tend to give returns that are more or less similar to gold. Gold ETFs are nothing, but, investing in gold in the electronic form. So, as you buy shares in the electronic form through your stock broker, you can buy Gold ETFs in the same.
Since these instruments track gold prices, you get the benefit of gold prices, while you do not have to worry about theft and storage as they are in the electronic form. Here are 3 Gold ETFs that have given returns of more than 30 per cent in the last 1 year.
HDFC Gold Fund
This fund has generated a returns of 34.79 per cent in the last 1 year, in line with rising gold prices. The three year returns has been 17.60 per cent on an annualized basis per annum, while the 5-year returns are placed at near 13 per cent.
HDFC Gold Fund has a 5-star rating from Value Research. It's important to remember that if you are investing in physical gold, it is better to invest in ETFs because they can be sold easily, have no problem with theft and storage. Also, they can be directly bought through the stock exchanges like shares.
To invest in the HDFC Gold Fund one can buy it at the NAV, which is currently placed at Rs 16.50.
Kotak Gold Fund
Kotak Gold Fund too has a 5-star rating from Value Research. The growth fund of the scheme has an NAV of Rs 21.43. Kotak Gold Fund has given a returns of 34.81 per cent in the last 1-year, which is slightly better than the returns given by peers. The three year returns on an annualized basis is also pretty good at 19 per cent, while the 5-year returns is placed at 13.52 on an annualized basis.
The assets under management of the fund is not very large at Rs 905 crores. For those believing that gold prices would rally and would like to hedge their risks, this Gold Fund is a good bet.
SBI Exchange Traded Fund Gold
This is another fund that has done well, though the one year returns are much lower than the returns generated by Kotak Gold Fund and HDFC Gold Fund. The 1-year returns from SBI Exchange Traded Fund Gold is placed at 31.94 per cent, while the 3-year returns is placed at 18.57 per cent on an annualized basis.
The Fund has assets under management of Rs 1,800 crores. For those looking to diversify their holdings this is a good bet. Investors wanting to take a long term view on gold, can buy into this fund. However, there is no certainty that the returns of the past would hold good in the future, given that gold has had a sharp rally in the last few months.
About the author:
Sunil Fernandes has spent 26 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, mutual funds and tax planning.