SBI Gold ETF vs HDFC Gold ETF: Where To Invest?

Over the past few years, when stock market volatility and inflation have plagued investors, one option has slowly become the most popular Gold ETF. The number of accounts investing in gold ETFs in India has grown 13 times in the last 5 years, which shows that people are now moving more towards digital gold than physical gold, till March 2025. Amidst this change, the two most popular options are SBI Gold ETF and HDFC Gold ETF. In this article, we will do an in-depth comparison between the two so that you can know which is the better option for your investment goals, SBI Gold ETF vs HDFC Gold ETF.

What is Gold ETF and why is its popularity increasing?

Gold ETF (Gold Exchange Traded Fund) is an investment option in which you invest in gold, but without buying physical gold. These funds run according to the price of real gold and are listed in the stock market. That is, you can buy and sell them from your demat account like stocks.

How does it work?

Each unit of Gold ETF is usually equal to 1 gram of gold. When you buy an ETF, you are actually buying digital gold of the value that the fund house invests in physical gold. You do not get the gold, but its value appears in your demat account and you can trade it anytime.

Why is Gold ETF becoming so popular?

• There is no storage or locker charge
• There is no making charge like in case of physical gold
• The purity of gold is guaranteed usually 99.5% or more
• Liquidity means it can be easily bought and sold
• Investment can be started even with a small amount (like ₹100 or ₹500)

How has been the performance in the last few years?

Gold ETFs have given an average annual return of 10%-11% in the last 5 years. Especially when the market fell or inflation increased, gold ETFs helped in handling the portfolio. This is the reason why the number of gold ETF investors has increased by 13 times by March 2025 and this boom is still continuing.

Read Also: Gold BeES vs Gold ETF: Meaning, How It Works, Taxation

What is SBI Gold ETF?

SBI Gold ETF is an exchange traded fund launched by SBI Mutual Fund in 2009. The fund tracks the price of 99.5% pure gold in India, giving investors an opportunity to invest in gold without buying physical gold. The ETF trades on the stock exchange under the name SEFTGOLD.

Fund Manager	Vandna Soni
Launch Year	2009
ETF Trade Symbol	SETFGOLD

Key features:

• Less expensive option than physical gold
• 1 unit = approximately equal to 1 gram of gold
• Changes in NAV based on market value of gold
• Easy purchase and sale possible through demat account
• Indexation benefit is available in long term capital gain tax

Who is this ETF for: SBI Gold ETF is a good option for those investors who want to invest in gold but want to avoid hassles like security, storage or making charges. It is an excellent tool for retail investors as well as for portfolio diversification.

SBI Gold ETF – Key Metrics Table

ETF Name	Current Price (₹)	AUM (₹ Crores)	52-Week High (₹)	52-Week Low (₹)	Expense Ratio (%)	Tracking Error (%)
SBI Gold ETF	84.30	9,505.83	97.00	62.85	0.70	0.22

What is HDFC Gold ETF?

HDFC Gold ETF is an open-ended exchange traded fund that allows investors to invest in gold digitally, without the need to hold physical gold. The objective of this ETF is to track the price of 24 carat gold, and investors can benefit from changes in gold prices.

Fund Manager	Bhagyesh Kagalkar
Launch Year	2010
ETF Trade Symbol	HDFCGOLD

HDFC Gold ETF – Key Metrics

ETF Name	Current Price (₹)	AUM (₹ Crores)	52-Week High (₹)	52-Week Low (₹)	Expense Ratio (%)	Tracking Error (%)
HDFC Gold ETF	94.18	11,378.56	96.96	63.31	0.59	0.0

SBI Gold ETF vs HDFC Gold ETF: Key Differences

Feature	SBI Gold ETF	HDFC Gold ETF
Launch Year	May 2009	August 2010
AUM (2025)	9,505.83	11,378.56
Expense Ratio	0.70	0.59
Tracking Error	0.2	0.0
Liquidity	Moderate	Generally better liquidity
3-Year CAGR Returns	27.70%	29.50%
Benchmark Index	Domestic prices of 99.9% purity gold	Domestic prices of 99.9% purity gold
Available Trading Platforms	BSE, NSE	BSE, NSE
Trust Factor	Backed by government-owned bank	Trusted private sector institution

Key Risk Factors Before Investing in Gold ETFs

Gold ETFs are a convenient and transparent investment option, but they also have some hidden risks that every investor should be aware of. If you invest without full understanding and just thinking “gold is safe”, then sometimes it can prove to be harmful. Let us know what things should be kept in mind before investing in Gold ETFs:

1. Volatility in Gold Prices : The international prices of gold depend on many global factors such as dollar index, interest rates, geo-political tensions and central bank policies. These have a direct impact on the returns of your ETF.
2. Currency Risk : Since gold is purchased in India in INR against the dollar, changes in the USD-INR rate can affect the returns of gold ETFs even if international gold prices are stable.
3. Tracking Error : Gold ETFs track the price of gold, but their returns may differ slightly from physical gold due to reasons such as management fees, expense ratio and liquidity.
4. Liquidity Risk : The trading volume of some gold ETFs is very low, which may make it difficult to sell the ETF in the market at the time of need or may not get the right price.
5. Regulatory Changes : Any new guidelines of the government or SEBI regarding taxation or ETFs may affect the investment, such as changing the rates of long term capital gains tax.

What to keep in mind while choosing between SBI and HDFC Gold ETF?

1. AUM (Assets Under Management) : The total AUM of an ETF indicates how many investors have invested in that scheme. Generally, funds with higher AUM are considered more trusted and liquid.
2. Tracking error : Tracking error shows how much the return of an ETF differs from its benchmark (such as gold price). A low tracking error means that the ETF is tracking its benchmark correctly.
3. Expense ratio : This is the fee that the AMC charges you every year. Funds with a low expense ratio keep more of your money invested.
4. Liquidity and trading volume : You buy ETFs on the exchange like stocks. If the trading volume in the ETF is high, you will find it easy to buy/sell.
5. History and performance of the fund : It is important to see how many years the fund has been running and how it has performed in the past years. ETFs with a long and stable track record are more reliable.
6. Expertise of the fund manager : The skill and experience of the professional managing the fund is also an important factor. Under an experienced manager, the fund operates in a more professional manner.
7. Platform access and buying facility : It is important whether your brokerage platform supports that ETF or not. Also, check features like SIP facility, login process and mobile access.
8. Age and stability of investment : If you are young and can invest for a long time, then high-risk options may be right. On the other hand, if you are close to retirement, then stable and low-risk ETFs may be better.
9. Benchmark Index : It is important to know which benchmark the ETF is tracking such as domestic gold price or international gold price. This helps in understanding the direction of the ETF’s performance.
10. Taxation Rules : Gold ETFs are considered non-equity for taxation purposes. If sold before 3 years, it attracts short-term capital gains and thereafter long-term capital gains, which is 20% with indexation.

How to Invest in Gold ETFs? Easy Step-by-Step Guide

Step 1: Open Demat & Trading Account on Pocketful

The first step is to open a Demat and Trading Account. You can use a trusted and SEBI-registered stock broking platform like Pocketful. 

Step 2: Search for ETF

After logging into the Pocketful app or website, type in the search box – “SBI Gold ETF” or “HDFC Gold ETF”. Here you get important data like price, NAV, past returns.

Step 3: Buy ETF as per stock

You can buy or sell Gold ETF in real-time just like stocks. Just enter the quantity, check the price and place the order.

Step 4: SIP is also an option

If you want to invest a little every month, then Pocketful also has the facility of SIP. With this you can average the price fluctuations.

Step 5: Track Your Portfolio

Pocketful lets you track your ETF holdings in real-time. You can also sell it when needed.

Read Also: Best ETFs in India to Invest

Conclusion

Today, the way of investing in gold has completely changed. Gold ETF is a smart, digital and secure option that allows you to invest without worrying about lockers, jewellery or physical gold. These can be bought and sold just like stocks and can also be cashed immediately when needed. If you are looking for easy, transparent and low-cost gold investment, then Gold ETF can prove to be an excellent option.

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