- September 17, 2025
| Basis | Gold Fund | Sovereign Gold Bonds |
| What | The gold mutual fund invests in physical gold or gold-related securities, such as gold ETFs.
These funds are actively managed to follow gold price changes. Some of these schemes buy physical gold and keep it in the vaults. | SGBs are debt securities issued by the RBI on behalf of the Indian government.
They are directly tied to gold prices, providing a fixed 2.5% interest rate. However, SGB does not buy physical gold. The price is only pegged to gold. |
| Time Horizons | They provide flexible time horizons. Investors can even exit the very next day paying some nominal exit load. | SGBs have an 8-year term, but allowing early redemption after 5 years or exiting through the secondary market is another option. |
| Risk | They are low-risk instruments, less volatile than equity schemes. Offer consistent long-term returns. | SGBs are backed by the government, making them minimal-risk instruments. Only Price pegged to gold. |
| Returns | Gold price movements influence returns. | SGBs offer a fixed rate along with potential capital appreciation (appreciation in the gold price is the capital appreciation) |
| Taxation | Taxable based on the investor’s tax slab | SGBs are tax-exempt if held until maturity |
Gold Funds Returns
| Gold Funds | Returns (P.A) (as of 9 Feb 2024) (last 5yrs) |
| Invesco India Gold ETF FoF | 10.65% |
| Axis Gold Fund | 10.58% |
| SBI Gold Fund | 10.54% |
| ICICI Prudential Regular Gold Savings Fund (FOF) | 10.46% |
| HDFC Gold Fund | 10.41% |
Also Read: How to Find a Good Mutual Fund Distributor?
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Sovereign Gold Bonds Returns
| Financial Year | Series | Issue Price (Rs) | Current Price (Rs) | Return of SGBs (%) |
| 2021-22 | XI | 6777 | 5926 | -12.6 |
| 2021-22 | XII | 6850 | 5926 | -13.5 |
| 2022-23 | I | 6927 | 5926 | -14.5 |
| 2022-23 | II | 7000 | 5926 | -15.3 |
| 2022-23 | III | 7077 | 5926 | -16.3 |
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About the Author
Mr Shashi Kant Bahl
Our founder Mr. ShashiKant Bahl and core team members have been associated with the financial services and mutual fund industry for several years. Over time, we have helped a wide range of investors – salaried professionals, business owners, self-employed individuals, and retirees – plan and manage their mutual fund investments.
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