Gold Funds vs Gold ETFs vs Sovereign Gold Bonds
Three popular ways to own gold without the locker. How they differ on returns, liquidity, costs and tax.
Gold can diversify a portfolio and hedge uncertainty. Today you can own it digitally through three main routes — each with trade-offs.
Sovereign Gold Bonds (SGBs)
Issued by the RBI, SGBs pay 2.5% annual interest and exempt capital gains if held to maturity — making them the most tax-efficient long-term option, though liquidity is limited.
Gold ETFs and Gold Funds
Both track gold prices. ETFs trade on the exchange (you need a demat account); gold funds invest in ETFs and suit SIP investors without demat. Expense ratios apply to both.
Which is right for you?
For long-horizon allocation, SGBs usually win on tax. For flexibility and SIPs, gold funds are convenient. We help match the instrument to your goal and time horizon.
Dilshad Billimoria
Founder & Principal Officer, SEBI RIA
Dilshad Billimoria is the Founder and Principal Officer of Dilzer Consultants, a SEBI-registered investment advisory firm with over two decades of experience in financial planning and wealth management.