|
Getting your Trinity Audio player ready...
|
Gold ETFs have become a convenient way for Indian investors to gain exposure to gold without buying, storing, or insuring physical metal. But the cost of owning one Gold ETF can differ meaningfully from another. The expense ratio is one of the easiest numbers to compare, but it isn’t the whole story.
As of the latest 2026 data available from the fund houses, SBI Gold ETF reported an expense ratio of 0.65% as of July 31, 2026, while HDFC Gold ETF reported a 0.59% base expense ratio. Nippon India ETF Gold BeES reported a 0.69% base expense ratio in its latest verified 2026 Abridged Report. But an investor comparing Gold ETFs should also consider tracking error, trading liquidity, bid-ask spreads, and how closely the ETF actually follows gold.
Start investing with just ₹10K & grow your wealth with fixed return opportunities.
Invest Now
What Is the Expense Ratio of a Gold ETF?
The expense ratio, or Total Expense Ratio (TER), represents the recurring costs charged by the mutual fund scheme for managing and operating the ETF. These expenses are reflected in the fund’s NAV rather than being separately deducted from an investor’s trading account.
A TER of 0.60%, for example, means that the annual expense represented by the TER is approximately ₹600 for every ₹1 lakh invested, although the actual impact varies with the investment’s value over time. Importantly, the expense ratio is not an upfront fee. It is incorporated into the fund’s NAV on an ongoing basis.
SBI Gold ETF vs Nippon Gold BeES vs HDFC Gold ETF
Here is the latest comparison based on the most recent AMC data available:
| Gold ETF | Latest cost figure | Data date | Tracking error | AUM |
| SBI Gold ETF | 0.65% | 31 Jul 2026 | 0.4267% | ₹24,424.66 crore |
| HDFC Gold ETF | 0.59% base expense ratio | 31 Jul 2026 | 0.39% | ₹22,285.40 crore |
| Nippon India ETF Gold BeES | 0.69% base expense ratio | 30 Jun 2026* | 0.40% | ₹53,341.21 crore |
*Tracking-error periods and methodologies can differ, so these figures should not be treated as a perfectly standardized ranking.
One caution: these are point-in-time figures. TERs can change, so investors should check the latest AMC disclosure before investing.
Which Gold ETF Has the Lowest Expense Ratio in 2026?
Among these three, HDFC Gold ETF has the lowest reported base expense ratio among the three at 0.59%, followed by SBI Gold ETF at 0.65% and Nippon India ETF Gold BeES at 0.69%. However, HDFC’s 0.59% is specifically its base expense ratio, while Nippon has moved to the newer BER disclosure framework, so these figures should not be treated as perfectly identical measures. The difference may look small, but it becomes more relevant as the investment amount and holding period increase.
Does a Lower Expense Ratio Mean Better Gold ETF Returns?
Not necessarily. Gold ETFs aim to track the price of gold, but the return investors actually receive can differ from the underlying gold price. Expenses are one reason. Other factors include transaction costs, cash holdings, market conditions, and tracking differences. This is why tracking error and tracking difference are worth examining alongside TER.
A fund with a slightly higher expense ratio can sometimes deliver competitive tracking if it manages its portfolio efficiently. Conversely, a very low TER doesn’t guarantee that the ETF will produce the closest possible return to gold. The objective should therefore be to find a reasonable combination of low cost and efficient tracking, rather than simply choosing the ETF with the smallest TER.
Latest Bond Updates:
- NPS Debt vs Direct Bonds: Which Gives More Control & Better Returns?
- Gold ETF Expense Ratio 2026: SBI vs Nippon vs HDFC
- NCD YTM vs. Coupon Rate: Which Should Investors Compare?
SBI Gold ETF: Expense Ratio and What to Know
SBI Gold ETF’s latest AMC data shows an expense ratio of 0.65% as of July 31, 2026 [1]. Its AUM stood at ₹24,424.66 crore on that date, while its latest disclosed tracking error was 0.4267% as of August 20, 2026. The ETF is listed on NSE under the symbol SETFGOLD and seeks to provide returns corresponding closely to the price of gold through investment in physical gold.
Nippon India ETF Gold BeES: Expense Ratio and Liquidity
Nippon India ETF Gold BeES had a 0.69% [2] base expense ratio and 0.40% tracking error in the AMC’s June 30, 2026, Abridged Report. Its July 31, 2026 product note [3] shows a month-end AUM of ₹53,341.21 crore and 98.33% of the portfolio in gold, with 1.67% in cash and other receivables. The fund is listed on NSE under GOLDBEES.
HDFC Gold ETF: Expense Ratio and Tracking
HDFC Gold ETF’s July 31, 2026 factsheet reports a 0.59% [4] base expense ratio, 0.39% annualized tracking error, and ₹22,285.40 crore AUM. Its portfolio held 98.44% in gold, with the remaining 1.56% in cash, cash equivalents, and net current assets.
This illustrates another reason not to look at TER in isolation: the investor is ultimately buying an ETF whose job is to track gold, not simply to minimize expenses.
How Much Does the Expense Ratio Matter?
For a small investment held for a short period, the difference between 0.59% and 0.80% may not be decisive. For a larger portfolio held over many years, however, recurring costs can compound into a meaningful difference.
A simple way to think about it is the following: Annual cost ≈ Investment × Expense ratio
So, on ₹10 lakh:
- 0.59%: approximately ₹5,900 a year
- 0.65%: approximately ₹6,500 a year
- 0.80%: approximately ₹8,000 a year
These are illustrative calculations, not separate charges deducted from your account. Actual expenses and their impact vary with the fund’s NAV and assets.
What Else Should You Check Before Choosing a Gold ETF?
The expense ratio should be just one part of the checklist. Investors should also examine:
- Tracking error: How closely the ETF has historically followed its benchmark.
- Tracking difference: How much the ETF’s return has differed from the benchmark over a period.
- Liquidity: Higher trading volumes can make it easier to buy or sell without materially affecting the price.
- Bid-ask spread: A wider spread can increase the effective cost of entering or exiting.
- AUM: Not a quality guarantee, but useful context when considering the scale of the ETF.
- Gold exposure: Check the portfolio and scheme documents to understand how the ETF gets its gold exposure.
- Brokerage and other transaction costs: These are separate from the ETF’s TER.
For exchange-traded products, the price you pay on the exchange can also differ from the ETF’s NAV, so investors shouldn’t assume that TER is the only cost of ownership.
Gold ETF Taxation in India in 2026
The tax treatment of Gold ETFs changed significantly from April 1, 2026. For listed Gold ETFs, units held for more than 12 months qualify as long-term capital assets, with LTCG generally taxed at 12.5% without indexation. Units held for 12 months or less are generally treated as short-term and taxed at the applicable slab rate.
The ₹1.25 lakh annual LTCG exemption under Section 112A for equity-oriented investments does not apply to Gold ETFs, so it should not be assumed when calculating Gold ETF post-tax returns.
Tax rules can depend on the nature and acquisition date of the investment, so investors should verify their individual position with a tax professional.
Frequently Asked Questions
The expense ratio is the annual cost charged by the fund for managing and operating the ETF, expressed as a percentage of assets. It is deducted from the fund’s assets rather than charged separately to investors.
Not necessarily. Expense ratio matters, but investors should also compare tracking difference, liquidity, bid-ask spreads, AUM, and how closely the ETF follows domestic gold prices.
Yes. The fund’s expenses are reflected in its NAV, so they reduce the return investors receive relative to the underlying gold price, all else being equal.
Both matter, but tracking differences can be more useful for judging the investor’s actual experience. A fund with a slightly higher expense ratio may still deliver better results if it tracks gold more efficiently.
The published TER incorporates applicable expenses and statutory levies according to the fund’s disclosure methodology. Investors should refer to the latest factsheet when comparing TERs because the disclosed figure can change over time.
Sources
- SBI Gold ETF — June 2026 Factsheet
- Nippon India ETF Gold BeES — June 2026 Abridged Report
- Nippon India ETF Gold BeES — July 2026 Product Note
- HDFC Mutual Fund — Passive Index Funds, ETF & FoF Reckoner, July 2026
Disclaimer
Fixed returns do not constitute guaranteed or assured returns. Investments in corporate debt securities and municipal debt securities/securitized debt instruments are subject to credit risks, market risks, and default risks, including delay and/or default in payment. Read all the offer-related documents carefully. This blog/article should not be construed as financial advice or as an offer or recommendation to buy or sell any security or any products/services of/on GoldenPi or any product/services of its third-party client(s). For a detailed calculation of YTM, visit our website. T&C’s Apply.
