Prices of both gold and silver rose fast in recent times, leading to high interest from retail investors. Investors can now accumulate both these metals through the mutual fund route.
What is gold, silver ETFs? How to buy them?
Gold and silver ETFS or exchange-traded funds, are vehicles that help investors buy these precious metals and take exposure to them, without the need to physically buy them or store them. Gold and silver ETFs typically invest in gold/silver bullion, gold/silver futures contracts and they aim to track the price of the precious metal closely. Investors who do not have demat accounts or find it cumbersome to trade, can buy a gold or silver fund, which invests in a gold or silver ETF.
Benefits of buying gold/silver through MFS
Buying precious metals through the mutual fund route is beneficial as there is no storage cost, worries of purity, making charges or chances of theft. Buying units of the MF scheme gives you exposure to gold or silver as an asset class and helps you track prices at a very low cost. Investors can buy either a gold or silver ETF/fund, or get exposure to metal through a multi-asset fund that has gold/ silver in its portfolio.
No. of gold/silver ETFs to choose from
There are 20 gold ETFS that manage assets worth Rs 62,124 crore as of as May 31, 2025. In the case of silver there are 15 ETFs managing Rs 15,500 crore.
Return that gold and silver funds have given
Gold has rewarded investors well over the last decade. In rupee terms, over the last one year, gold funds have returned 30.9%, while silver funds have returned 15.2%. Over longer tenures of three years they have returned 22% and 18.3%, respectively.
How much gold, silver to have in portfolio?
Gold acts as a portfolio diversifier and acts as a hedge against rising inflation, while silver has industrial use and is used to make jewellery, coins, photography, electronics and solar panels. Wealth managers believe investors should allocate 10-15% to gold and silver in their portfolios, based on their risk appetite and asset allocation. Investors could stagger their purchases in these precious metals through systematic Investment plans (SIPS).
Disclaimer: – Mutual funds investments are subject to market risk. Please read the offer documents carefully before investing
