Gold funds: 24% in a year, 17% below their peak

The year in one line

A gold fund of funds in the Direct plan returned roughly 24% over the 12 months to 1 October 2026. Over the same funds' last five years the figure is almost identical, 24.5% to 24.8% a year. And yet the NAVs are well off their highs: 16% to 18% below the best NAV of the past 52 weeks.

Both facts are true at once, and the second is the one that matters for anyone buying today. These numbers are computed from daily NAVs for each fund's Direct plan, Growth option, for the 17 gold-only fund of funds with at least a year of history. Gold-and-silver blends and the gold-mining fund are left out.

What a gold fund of funds actually is

A gold fund of funds does not hold bars. It buys units of one or more gold ETFs, which hold the metal. You get gold exposure without a demat account, and you can run a SIP into it. The price of that convenience is a second layer of cost: the ETF's own expenses sit inside the ETF's price, and the fund of funds adds its expense ratio on top.

That is why the direct expense ratios in AMFI's disclosures matter here. As of 1 October 2026 they range from 0.06% (Nippon India Gold Savings Fund and Quantum Gold ETF FOF) through 0.14% (Groww), 0.15% (Kotak), 0.18% (ICICI Prudential), 0.21% (Aditya Birla Sun Life) to 0.31% for Axis Gold Fund.

The returns, fund by fund

A selection of the 17. Where a fund is younger than the period, the cell is blank.

Two things stand out. Over five years the eight funds that have a record are within 0.35 of a percentage point of each other, and over ten years within 0.7. Over the last 12 months the spread is wider, mostly because of one laggard: LIC MF Gold ETF FoF at 20.89%, while 15 funds returned between 23.0% and 24.8%.

Cost explains part of the gap and not all of it. Zerodha's fund has a direct expense ratio of 0.28% and tops the one-year column; Axis, at 0.31%, is near the bottom. Which ETF a fund holds, how fast it deploys new money and its cash level all leak into the number.

The shorter windows tell a different story

A year of 24% sits alongside a six-month loss and a month in which every one of these funds fell. Annual figures smooth over this.

The older funds are 15.9% (Aditya Birla Sun Life) to 17.8% (ICICI Prudential) below their 52-week high. Their worst fall from a peak in the last three years was 23.3% to 25.8%, and their annualised volatility over three years runs between 20.7% and 25.5%. That is the range you would expect from a large-cap equity fund in a rough year, not from a "safe" asset.

Reading this without drawing the wrong conclusion

A strong trailing year is a statement about the past. A fund that has returned 24% is not more likely to repeat it; some of the drop from the high may be the other side of the same move. The gold and silver price recap has the rupee price path behind these NAVs.

A gold fund is a different job from an equity fund. Over ten years these funds returned around 15% a year, a good result but one that came with falls of a quarter or more. How gold sits next to equity over a decade is covered in gold versus the Nifty 50 over ten years.

Costs compound quietly. The difference between a 0.06% and a 0.31% direct expense ratio is a quarter of a percentage point a year, which on a ten-year holding is worth checking before you choose. For other ways to own gold, see SGB vs gold ETF vs physical gold.

None of this is a recommendation to buy or sell. Check each fund's current expense ratio and holdings before relying on any figure here.

Where to go from here

The fund screener lets you filter fund of funds by category and sort by return, volatility or drawdown. The earlier gold fund returns post from April shows how different the one-year number looked then.