Gold ETF returns
Investors are busy looking for multibagger stocks in the stock market, but gold is secretly brightening the portfolios of those who have been holding it for a long time. Anyway, these days there is a tremendous rise in the prices of gold. But in the meantime, there is another option to invest in gold which has given bumper returns to the investors. Here we are talking about gold ETF. The country’s oldest gold ETF, Nippon India ETF Gold BeES, has given a whopping return of 950% since its launch in 2007. That is, if someone had invested Rs 10 lakh in it 18 years ago, today it would have become more than Rs 1 crore.
Gold is currently breaking records in the global and Indian markets. In the future market in India, the price of gold has crossed Rs 1.22 lakh per 10 grams, and silver has crossed Rs 1.5 lakh per kg. In the global market, gold is trading at more than $ 4,000 per ounce. This is because investors are running towards safe investments amidst inflation, geopolitical tension and stock market fluctuations. Support of billionaires: This week gold crossed the historic level of $ 4,000 per ounce and it is getting the support of big billionaires.
American billionaire Ray Dalio has said that investors should keep about 15% of their portfolio in gold. He told Bloomberg that gold is a great way to balance your portfolio. Especially when most investments depend heavily on debt. Dalio says that gold performs well even when other assets go down. He also advised avoiding “dead assets” i.e. some government bonds, because credit spreads are very low.
Nippon India Gold ETF
Investors currently have Rs 24,000 crore invested in Nippon India Gold BeES. It has grown by more than 56% in the last one year and in 18 years it has grown by 950% with a CAGR of 13.5%. These returns remind us of times like the dot-com crash, the financial crisis of 2008 and the Covid shock of 2020, when people ran towards gold for safety. Gold ETFs in India saw record monthly inflows in September, with total managed assets reaching $10 billion. So far this year, investments worth $2.18 billion have come in gold ETFs, breaking all previous records. In comparison, there was investment of 1.28 billion dollars in 2024, 295.3 million dollars in 2023 and only 26.8 million dollars in 2022. After rising 21% last year, gold prices have risen 60% so far in 2025.
De-dollarization game
The main reason behind this rise in gold is de-dollarization. When the value of the dollar falls, the price of gold increases. In the first quarter of 2025, the share of dollars in the reserves of central banks will be reduced to only 43%. Countries like China (6.8% gold reserve) and Russia (37.1% gold reserve) are accelerating the purchase of gold. Russia bought 274 tonnes of gold in 2018 and sold off almost half of its US Treasury holdings. Gold purchases by central banks have almost doubled in the last 10 years.
Geopolitical uncertainty, purchases by central banks, expectations of Federal Reserve interest rate cuts and questions over the independence of the Fed have further strengthened gold. The government shutdown in the US is in its second week, causing delays in economic data. Still, traders are expecting a rate cut of 25 basis points in October and December.
Experts’ advice
In the ET report, Tata Mutual Fund says that investors should remain invested in gold for the long term. If there is a small fall in prices, consider it a buying opportunity. He believes that amidst the fear of inflation, geopolitical tension and currency value decline, gold is a solid investment. They suggest that it may be good to invest in gold and silver in the ratio of 50:50, because silver also looks quite attractive.