Gold ETFs vs Gold Funds: Key Differences, Returns & Smart Investment Options Explained
Gold prices have surged sharply in 2025, boosting interest in Gold ETFs, Gold Funds, and multi-asset investments. Compare their key differences, average returns, expert views, and find out whether investing in gold now is a smart choice.
Gold ETFs and Gold Funds deliver strong returns in 2025 as investors explore safer and more diversified investment options.
Gold continues to be a preferred investment choice in India, especially with its sharp price surge this year. While many investors still rely on physical gold, options like Gold ETFs and Gold Funds have gained popularity for offering easier, more flexible ways to invest. Here’s a detailed comparison of these options, along with expert insights on whether gold is worth buying now.
Gold Investment: What Experts Say
Certified Financial Planner Pallav Aggarwal warns that the short-term outlook for gold may be risky after this year’s steep rise. According to him, easing geopolitical tensions could lead to a correction in gold prices.
Meanwhile, Tanvi Kanchan, Strategy Head at Anand Rathi, stresses that choosing between ETFs and Gold Funds depends on cost, liquidity needs, and convenience.
Gold ETFs vs Gold Funds: Performance in 2025
Gold has delivered exceptional returns this year, with both ETFs and Gold Funds performing strongly.
Gold Funds average return (2025): 65%
Gold ETFs average return (2025): 66%
Top performers:
UTI Gold ETF: 67.58%
Quantum Gold Saving Fund: 66%
Key Differences:
Gold ETFs allow real-time trading but require a Demat account.
Gold Funds can be bought through SIP without needing a Demat account.
Should You Buy Gold Now?
Experts believe 2025 has been an extraordinary year for gold, with returns crossing 60% and prices touching historic highs. Going forward, two scenarios may unfold:
Soft Landing: Interest rate cuts could boost gold by another 10–15%.
Risk-Off Scenario: Economic slowdown or geopolitical risks may push gold up by 20–30%.
Hence, investors are advised to invest gradually through SIPs to manage volatility.
Multi-Asset Funds & Silver: Better Alternatives?
Silver has also delivered an impressive rally this year. However, Multi-Asset Funds, which invest across equity, debt, and gold, have historically outperformed gold ETFs in the long run with lower risk.
Both experts recommend Multi-Asset Funds as a more balanced and safer investment option, especially at current elevated gold prices, as they diversify risk across multiple asset classes.
