By Soni 
Best Gold ETF 2025: Investing in gold has always been a popular choice for Indian investors. But choosing the right option is always challenging. In this article, we will discuss the Best Gold ETF (Exchange Traded Fund) for 2025. Apart from this, we will deeply analyze the benefits of investing in gold, right allocation and various investment options.
Why invest in gold?
- Increases portfolio returns: According to a 20-year study, adding gold to your portfolio increases investors’ average returns from 12.1% to 13.4%.
- Inflation-beating ability: When the stock market performs poorly, gold often performs well.
- Reduces risk: Gold helps bring stability to the portfolio. However, risk may increase if its proportion is more than 20%.
How much should one invest in gold?
According to experts, 15-20% of your total portfolio should be invested in gold. It depends on your risk profile and financial goals.
Options for investing in gold
1- Physical gold
Jewellery: Advantages: Great for personal use.
Disadvantages: 10-12% making charges and 3% GST.
Gold bars/coins: Advantages: Low making charges (5-8%).
Disadvantages: Storage problems and 3% GST.
2- Digital Gold: Advantages: No worry of storage and security., Gold remains safe and insured in the warehouse.
Disadvantages: 2-3% commission on buying and selling. 3% GST.
3-Gold ETF
Advantages: Easy to buy and sell like stock market.
No problem of storage and making charges.
Low expense ratio.
Disadvantages: Buyer must be available in the market.
Best Gold ETFs for 2025
There are 17 Gold ETFs available in India, but while selecting the right fund, it is important to pay attention to the following 3 key parameters:
Tracking Error: ETF should be close to the actual price of gold.
AUM (Assets Under Management): There should be an AUM of at least Rs 1000 crore.
Expense Ratio: Should be less than the category average (0.62%).
Based on these parameters, 4 Best Gold ETFs were identified.
- ICICI Prudential Gold ETF
- Kotak Gold ETF
- HDFC Gold ETF
- UTI Gold ETF
- Among these, ICICI Prudential Gold ETF is the best, due to the following reasons.
Lowest tracking error.
- High AUM.
- Low expense ratio.
- Long track record history.
Conclusion
If you want to invest in gold in 2025, then gold ETF is a smart option. In particular, ICICI Prudential Gold ETF is currently considered to be the best option. It not only provides stability to your portfolio but also helps in increasing returns.
Important Tips:
- Invest only up to 15-20% in gold.
- Make the right choice based on your risk appetite and investment goals.
- Do thorough research before investing and diversify your portfolio.