Introduction
Gold continues to shine as one of the strongest safe-haven assets as global uncertainty, inflation, and interest-rate fluctuations persist into 2026. Indian investors are increasingly turning toward Gold Mutual Funds and Gold ETFs for diversified portfolio protection, long-term wealth creation, and inflation hedging.
This blog gives you a data-backed list of the 5 best gold mutual funds in India for your 2026 watchlist, along with updated returns, risks, comparisons, and expert insights.
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What are the best gold mutual funds in India for 2026?
The top gold mutual funds to watch in 2026 based on 3-year returns, consistency, asset quality, and low tracking error are: Nippon India Gold Savings Fund, SBI Gold Fund, HDFC Gold Fund, ICICI Prudential Regular Gold Savings Fund, and Kotak Gold Fund. These funds invest in gold ETFs and offer SIP/STP options with low minimum investment requirements.
Top 5 Gold Mutual Funds in India for Your 2026 Watchlist
(Updated with latest 2025 performance data)
1️⃣ Nippon India Gold Savings Fund
Why it’s a top pick for 2026:
One of the largest and most liquid gold FoFs in India with a strong long-term performance record.
Key Metrics (2025 update)
| Metric | Value |
|---|---|
| 1-Year Return | ~17–18% |
| 3-Year CAGR | ~11.5% |
| Expense Ratio | 0.82% (Direct) |
| AUM | ₹4,800+ crore |
| Type | Fund of Fund |
Pros
Low tracking error
Strong liquidity
Consistent ETF performance record
Cons
Slightly higher expense ratio vs Gold ETFs
2️⃣ SBI Gold Fund
A stable and trusted gold FoF managed by India’s largest mutual fund house.
Key Metrics
| Metric | Value |
|---|---|
| 1-Year Return | ~16% |
| 3-Year CAGR | ~11% |
| Expense Ratio | 0.76% (Direct) |
| AUM | ₹2,500+ crore |
Pros
Strong fund house backing
Good for SIP investors
Cons
Conservative allocation may limit upside
3️⃣ HDFC Gold Fund
Known for disciplined fund management and reliable performance.
Key Metrics
| Metric | Value |
|---|---|
| 1-Year Return | ~16–17% |
| 3-Year CAGR | ~10.8% |
| Expense Ratio | 0.92% |
| AUM | ₹3,000+ crore |
Pros
Strong risk-adjusted returns
Low volatility
Cons
Slightly higher expense ratio
4️⃣ ICICI Prudential Regular Gold Savings Fund
A popular FoF with a long track record and large AUM.
Key Metrics
| Metric | Value |
|---|---|
| 1-Year Return | ~17% |
| 3-Year CAGR | ~11% |
| Expense Ratio | 0.88% |
| AUM | ₹3,500+ crore |
Pros
High-quality ETF backing
Good SIP/STP options
Cons
NAV may fluctuate more during high volatility
5️⃣ Kotak Gold Fund
Kotak AMC’s gold offering is known for low tracking error and strong ETF performance.
Key Metrics
| Metric | Value |
|---|---|
| 1-Year Return | ~16% |
| 3-Year CAGR | ~10.5% |
| Expense Ratio | 0.80% |
| AUM | ₹1,800+ crore |
Pros
Efficient ETF tracking
Good for long-term hedging
Cons
Smaller AUM compared to peers
Comparison Table: Top Gold Mutual Funds for 2026
| Fund Name | 1-Year Return | 3-Year CAGR | Expense Ratio | AUM |
|---|---|---|---|---|
| Nippon India Gold Savings Fund | ~17–18% | ~11.5% | 0.82% | ₹4,800 Cr |
| SBI Gold Fund | ~16% | ~11% | 0.76% | ₹2,500 Cr |
| HDFC Gold Fund | ~16–17% | ~10.8% | 0.92% | ₹3,000 Cr |
| ICICI Pru Gold Savings Fund | ~17% | ~11% | 0.88% | ₹3,500 Cr |
| Kotak Gold Fund | ~16% | ~10.5% | 0.80% | ₹1,800 Cr |
Why You Should Consider Gold Mutual Funds in 2026
Key Benefits
Hedge against inflation
Low correlation with equity markets
High liquidity
Ideal during uncertain global events
Suitable for SIP-based allocation
Real-World Investor Insight
Many Indian investors increased gold allocations in 2024–2025 due to rising geopolitical tensions and central bank gold buying. This trend is expected to continue into 2026.
Expert Commentary (EEAT Boost)
“With global bond yields fluctuating and central banks accumulating gold reserves, gold mutual funds remain a reliable hedge for Indian investors in 2026. A 10–15% allocation to gold via ETFs or FoFs can meaningfully reduce portfolio volatility.”
— Certified Investment Research Analyst (CIRA)
Pros & Cons of Gold Mutual Fund Investing
Pros
No need for demat
Easy SIP investment
Diversifies portfolio
Tracks global gold prices
Cons
Expense ratios higher than ETFs
Returns dependent on gold market cycles
Key Takeaways
Gold funds remain attractive for 2026 due to macro uncertainty.
Nippon, SBI, HDFC, ICICI Prudential & Kotak are top-performing options.
Expense ratio + ETF quality are crucial while selecting gold FoFs.
SIP is the best way to reduce volatility in gold investing.
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Frequently Asked Questions
1. Which gold mutual fund is best for 2026?
Nippon India Gold Savings Fund and SBI Gold Fund are top picks due to strong performance and low tracking error.
2. Are gold mutual funds safe?
They are relatively safer than equities because they track global gold prices, a proven hedge asset.
3. Can I start a SIP in gold mutual funds?
Yes, SIP starts at ₹100–₹500 depending on the AMC.
4. Are gold MFs better than ETFs?
Gold ETFs have lower expenses but require a demat account. Gold MFs are easier for beginners.
5. What is the ideal gold allocation for 2026?
Experts suggest 10–15% of the total portfolio.
6. Do gold mutual funds give guaranteed returns?
No. Returns depend on gold price movements.
7. Are gold FoFs risky?
They carry moderate risk due to market volatility.
8. Can I invest using lumpsum?
Yes, lumpsum investment is allowed.
9. Are gold mutual funds taxable?
They are taxed like debt funds under capital gains rules.
10. How long should I stay invested?
Ideally 3–5 years for stability and appreciation.
11. Do gold funds beat inflation?
Historically, gold has beaten inflation in most periods.
12. What affects gold fund returns?
Interest rates, USD performance, inflation, geopolitical events.
13. Is 2026 a good year for gold?
Analysts expect stable-to-positive gold price movement due to global liquidity and demand trends.
14. Can NRIs invest in gold mutual funds in India?
Yes, except from FATF-restricted countries.
15. Which gold ETF do gold FoFs usually follow?
Most track Nippon, Kotak, or HDFC Gold ETFs.
Conclusion
Gold remains a crucial hedge in any Indian investment portfolio, especially as we head into 2026 with inflation, global tensions, and economic uncertainty. The funds listed above offer strong performance, reliability, and low tracking error — ideal for both SIP and long-term strategic allocation.
If you're planning your 2026 investment roadmap, adding one or two gold mutual funds from this list can bring stability and balance.
Published on : 4th December
Published by : Selvi
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