Zerodha's Gold ETF: Gold Seems To Have Generated High Returns Than Nifty Since 2000: Nithin Kamath

Gold Prices: Zerodha's founder, Nithin Kamath on Thursday stated, that gold has been kind to Indian investors over the two decades compared to equities. He said, "Nobody can explain what makes gold prices move, but it seems to work." His statement comes after gathering performance between gold and Nifty since 2000, where yellow metal has given better returns. However, he believes that gold ETFs are probably the best way to get exposure to the precious metal.

Nithin Kamath On Gold:

Through his X handler, Nithin said, 'I'm cherry-picking the date, but it's kinda crazy that since 2000 gold seems to have generated higher returns than Nifty."

He added, "Gold has been kind to Indian investors and has provided some diversification benefits. Nobody can explain what makes gold prices move, but it seems to work."

Furthermore, he said, "We couldn't time the launch of the GOLD CASE, Zerodha AMC's Gold ETF any better. First, gold prices started shooting up and then the stopping of sovereign gold bonds (SGBs). Now that SGB issuance has stopped, Gold ETFs are probably the best way to get exposure to gold."

Zerodha Gold ETF:

An Exchange Trade Fund (ETF), Zerodha's Gold ETF scheme is focused on tracking the performance of yellow metal in the market. On its website, Zerodha highlighted that Gold is often considered to act as a hedge against market volatility as its price generally moves independently of assets like stocks and bonds.

Thus introducing gold into your portfolio can potentially reduce overall volatility, providing a more stable path towards achieving your financial objectives, it added.

Indian households cumulatively hold about $2 trillion worth of gold, as per the latest data from the World Gold Council.

Moreover, Zerodha Gold ETF is backed by the performance of physical gold. The scheme offers a simple & optimized way to invest in gold.

As of now, Zerodha's Gold ETF has a net asset value of Rs 14.4337 crore, while it has given about 39.67% returns.

Gold Prices In India:

On April 3, 10 grams of gold is at new highs to Rs 93,380 in 24K, at Rs 85,600 in 22K, and at Rs 70,040 in 18 K. The price of 1 gram of gold in India is Rs 9,338 per gram for 24-karat gold, Rs 8,560 for 22-karat gold and Rs 7,004 per gram for 18-karat gold (also called 999 gold).

In March month, gold prices surged by over 6%, followed by nearly 3% gains in February, and over 8% upside in January 2025. Meanwhile, MCX gold touched a new record of Rs 91,423 per 10 grams, and has given around 18% returns year-to-date.

Gold is currently at record-high levels.

Why Invest In Gold ETF?

As per AMFI FAQs, Buying Gold ETFs means you are purchasing gold in an electronic form. You can buy and sell gold ETFs just as you would trade in stocks. When you actually redeem Gold ETF, you don't get physical gold, but receive the cash equivalent. Trading of gold ETFs takes place through a dematerialised account (Demat) and a broker, which makes it an extremely convenient way of electronically investing in gold. Because of its direct gold pricing, there is a complete transparency on the holdings of a Gold ETF. Further due to its unique structure and creation mechanism, the ETFs have much lower expenses as compared to physical gold investments.

Here are some key advantages of buying gold ETF are highlighted by AMFI:

- Purity of the gold is guaranteed and each unit is backed by physical gold of high purity.

- Transparent and real time gold prices.

- Listed and traded on stock exchange.

- A tax efficient way to hold gold as the income earned from them is treated as long term capital gain.

- No wealth tax, no security transaction tax, no VAT and no sales tax.

- No fear of theft - Safe and secure as units held in Demat. One also saves on safe deposit locker charges.

- ETFs are accepted as collateral for loans.

- No entry and exit load.

Disclaimer: The write-up is just for information purposes, and is not a recommendation to buy, sell or hold. We have not done fundamental or technical analysis and have no opinion on article mentioned. Neither, the author nor Greynium Information Technologies should be held liable for any losses. Please consult a professional advisor.