Gold ETF vs Sovereign Gold Bond vs Gold mutual fund

Tue, 12 May 2026 00:00:00 +0000

India offers three regulated paper-gold investment instruments: Gold ETFs (exchange-traded funds backed by physical gold), Sovereign Gold Bonds (SGBs) (government-issued bonds denominated in grams of gold), and Gold Mutual Funds (fund-of-fund schemes investing in gold ETFs). Each tracks the domestic price of 24-carat gold but differs in structure, cost, taxation, and liquidity.

Physical gold (jewellery, coins, bars) is excluded from this comparison.

Instrument overview

Gold ETF

A Gold ETF is an exchange-traded fund that holds physical gold (minimum 99.5% purity) as the underlying asset. Each unit of a Gold ETF typically represents 1 gram (or 0.01 gram for some fund-specific units) of gold. Gold ETFs are SEBI-regulated mutual fund schemes listed on NSE and BSE. A demat account is required. AMFI-registered AMCs offering Gold ETFs include Nippon India, HDFC, SBI, Axis, Kotak, UTI, and ICICI Prudential, among others.

Sovereign Gold Bonds on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Sovereign Gold Bonds (SGBs) are government securities denominated in grams of gold. They are issued by the Reserve Bank of India on behalf of the Government of India. SGBs offer investors exposure to gold price returns plus a fixed annual interest of 2.5% per annum on the issue price, without the need to hold physical gold. Zerodha provides access to SGB subscriptions during primary issue windows and to secondary market SGB trading through Kite.

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Gold ETF vs Sovereign Gold Bond vs Gold mutual fund

Instrument overview

Gold ETF

Sovereign Gold Bonds on Zerodha