Gold-focused mutual funds and exchange-traded funds (ETFs) have shown solid long-term growth from May 2020 to May 2025. An analysis by Value Research reveals that five gold funds and ETFs achieved annualised returns above 14.6% during this period.
The LIC MF Gold ETF led the pack with a compound annual growth rate (CAGR) of 15.36%. It was followed closely by the Invesco India Gold ETF, which returned 15.05%, and the UTI Gold ETF, with a 14.96% return.
Gold prices have steadily increased over the past five years. This rise was driven by global economic uncertainties, geopolitical tensions, and ongoing inflation. These factors made gold a popular choice for investors seeking a safe haven, boosting investments in gold-backed funds and ETFs.
Top Five Gold Funds and ETFs (May 2025)
| Fund/ETF | 5-Year CAGR | Expense Ratio | Assets Under Management (₹ crore) |
|---|---|---|---|
| LIC MF Gold ETF | 15.36% | 0.41% | 148.89 |
| Invesco India Gold ETF | 15.05% | 0.55% | 277 |
| UTI Gold ETF | 14.96% | 0.48% | 1,919.00 |
| Axis Gold Fund (Direct) | 14.95% | 0.17% | 1,065.00 |
| Axis Gold ETF | 14.93% | 0.54% | 1,710.00 |
While ETFs dominate the list, the Axis Gold Fund (Direct) stands out as the only mutual fund, not an ETF. It delivered a 14.95% return with a very low expense ratio of 0.17%, making it appealing for investors focused on cost efficiency. The Axis Gold ETF rounded out the top five with a 14.93% return.
Despite these strong past returns, investors should not base their decisions solely on performance. Value Research advises examining other factors such as the fund’s risk grade, liquidity, and tracking error before investing.
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