Physical Gold vs Top Gold ETF Calculations: Which has given higher return on Rs 2,00,000 one-time investment in 3 years?
Physical Gold vs Top Gold ETF: As the share market went through volatility in the last one year and market-linked investments fell, gold took the driver's seat, as its price created new records. Assets linked to the gold price such as gold exchange traded fund (ETF) and gold mutual funds also rise in value.
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07:12 PM IST
Physical Gold vs Top Gold ETF: Gold attracts masses – in the form of ornament and investment both. People buy gold as a mark of prosperity and to get good returns. Physical gold is the preferred choice to its digital form for most people in India. But a lot of them also buy it for investment purposes. Many are not keen on its physical form, and they buy it in its electronic form. This is the reason why the popularity of gold exchange traded funds (ETFs) and gold mutual funds has increased over the years.
But which has created a higher return for investors in 3 years – physical gold or the top gold ETF? See results-
Physical gold
The price of physical gold depends on its purity. The 24-carat gold is considered the purest form of gold, which is 99.9 per cent pure.
The same is considered a benchmark to calculate the gold price.
However, the gold price of any purity is not standard. It may vary from city to city depending on the supply and demand and a lot of other factors.
Gold ETF
Gold ETFs track the price of 99.9 per cent purity gold.
These ETFs invest in bullion, coins, and bars.
ETFs are traded in a share market, where investors with a demat account can sell and buy them.
One can trade them in trading hours like any other stock. Investors who don't want to invest in physical gold directly but want to take advantage of gold's price appreciation invest in gold ETFs.
Top gold ETF in 3 years
Invesco India Gold ETF FoF - Direct Plan has been the top gold ETF with the highest annualised return in 3 years.
The ETF has given an annualised return of 20.52 per cent in 3 years.
It has assets under management (AUM) of Rs 155 crore, while its net asset value (NAV) as on May 12, 2025, was Rs 27.5385.
Benchmarked against the domestic gold price, the fund has given an 8.13 per cent annualised return since its inception.
At an expense ratio of 0.10 per cent, the fund has Rs 500 as the minimum SIP investment and Rs 1,000 as the minimum lump sum investment.
Value of Rs 2 lakh investment in top gold ETF in 3 years
At a 20.52 per cent annualised return, a Rs 2 lakh investment in the top gold ETF has turned into Rs 3,50,112.
Value of Rs 2 lakh investment in physical gold in 3 years
We are taking the 24-carat gold rate for Mumbai today, which is Rs 96,600 per 10 gm.
The price of 10 gm 24-carat gold in Mumbai 3 years back was Rs 49,340.
In Rs 2 lakh, one would have bought 40.54 gm of gold.
The value of that gold today would have been Rs 3,86,400.
Conclusion
Given the 24-carat gold price in Mumbai, physical gold has given a higher return on a Rs 2 lakh investment.
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