Looking to invest in gold and silver mutual funds? Discover top-performing funds in India, compare returns, understand risks, and learn how to start investing in 2026.
Rajat Kulshrestha
Head of Mutual Fund Distribution
If you are looking for the top 5 gold and silver mutual funds in India, the first thing to understand is that these funds are not designed to beat the market like actively managed equity funds. Instead, they primarily aim to provide exposure to gold or silver prices.
That means the real question is not simply, “Which fund gives the highest return?” The better question is, “Which fund tracks the underlying metal efficiently, has reasonable costs, and fits your investment purpose?”
In this guide, we compare gold and silver mutual funds in India, explain how they work, highlight important funds investors can consider, and discuss the factors you should evaluate before investing.
Gold and silver mutual funds provide investors with exposure to gold or silver without requiring them to buy and store the physical metal themselves.
Most gold funds in India are structured as Fund of Funds (FoFs), which invest in gold ETFs. Silver mutual funds generally follow a similar structure by investing in silver ETFs.
These gold and silver mutual funds primarily track the underlying metal's price rather than actively attempting to outperform a benchmark like an equity fund.
The structure is relatively simple:
- You invest money in a mutual fund.
- The fund invests in an ETF.
- The ETF provides exposure to physical gold or silver.
- Your investment value therefore moves broadly in line with the underlying metal, after considering expenses and tracking differences.
Well, much advice simply says “for diversification,” but that does not explain when or why you actually need these funds.
Let’s break it down clearly.
When stock markets fall sharply, gold does not always fall at the same pace. In many situations, it either stays stable or falls less. This helps reduce overall losses in your portfolio.
Gold prices in India are influenced by both global gold prices and the rupee. If inflation rises or the rupee weakens, gold prices tend to adjust upward.
Silver is not just a precious metal. It is used in:
Now, because of this reason, silver prices often move faster when the economy is growing. But they can also fall faster when demand slows down.
You do not need to worry about storage, theft, or purity. You can invest and redeem easily through mutual fund platforms.
This is why investors consider the best gold and silver mutual funds as a supporting part of their portfolio, not the main investment.
When searching for the top 5 gold and silver mutual funds in India, it is important to look beyond recent returns. Since these funds generally track the underlying metal, differences in performance can be relatively small within the same category.
Investors should therefore compare factors such as expense ratio, AUM, tracking consistency, fund structure and the investment objective before selecting a fund.
The funds discussed below represent options across gold and silver categories. However, investors should evaluate them according to their own financial goals and risk tolerance rather than selecting a fund solely because of its recent performance.
Gold mutual funds have a longer track record compared with silver mutual funds in India. When evaluating the best gold and silver mutual funds, gold funds can therefore be easier to compare because there is more historical performance data available.
Here are the important factors to check when evaluating the best gold mutual funds:
Keeping the same in mind, here are some options listed for you:
|
Fund Name |
AUM (₹ Cr approx) |
3Y Return |
5Y Return |
Expense Ratio |
Structure |
|
Nippon India Gold Savings Fund |
7,000+ |
~44.35% |
~32.65% |
Low |
FoF |
|
HDFC Gold ETF Fund of Fund |
11,000+ |
~44.07% |
~32.54% |
Moderate |
FoF |
|
ICICI Prudential Gold ETF FoF |
6,500+ |
~44.44% |
~25.7% |
Low |
FoF |
|
Kotak Gold Fund |
6,800+ |
~44.25% |
~32.45% |
Moderate |
FoF |
|
Axis Gold Fund |
2,900+ |
~43.79% |
~32.74% |
Moderate |
FoF |
At first glance, all funds show similar returns. This is expected because they track the same asset.
So, instead of focusing only on returns, you should look at:
When selecting from the best gold and silver mutual funds, gold funds are easier to compare because they have a longer performance history.
Silver mutual funds in India are relatively new compared with gold funds, so investors have less long-term performance data available for comparison. This is an important consideration when evaluating the best gold and silver mutual funds.
|
Fund Name |
AUM (₹ Cr approx) |
Return Data |
Expense Ratio |
Structure |
|
Aditya Birla Sun Life Silver ETF FoF |
1,400+ |
Limited |
Moderate |
FoF |
|
Axis Silver FoF |
1,200+ |
Limited |
Slightly higher |
FoF |
|
Nippon India Silver ETF FoF |
4,500+ |
Limited |
Lower |
FoF |
|
HDFC Silver ETF FoF |
4,500+ |
Limited |
Moderate |
FoF |
|
ICICI Prudential Silver ETF FoF |
7,000+ |
Limited |
Moderate |
FoF |
What you need to understand here:
As of now, most silver funds do not show long-term returns yet. This does not mean they are underperforming. It simply means they have not spent enough time in the market.
Therefore, when comparing the best gold and silver mutual funds, investors should not evaluate silver funds only on the basis of long-term return history. Instead, consider:
Before choosing between gold and silver mutual funds, it is important to understand that the two metals can behave differently and may serve different purposes within a portfolio.
|
Factor |
Gold Funds |
Silver Funds |
|
Purpose |
Stability and protection |
Growth and industrial exposure |
|
Price movement |
Gradual |
Sharp ups and downs |
|
Demand driver |
Investment demand |
Industrial demand |
|
Risk level |
Lower |
Higher |
What this means in simple terms:
This is why many investors combine both instead of choosing only one.
Instead of looking only at past returns, you should evaluate a few practical factors that directly affect your actual outcome.
Gold and silver mutual funds are meant to follow metal prices. However, some funds track more efficiently than others. If a fund shows consistent deviation from gold or silver prices, your returns will be lower than expected over time. You can check this by comparing fund returns with gold or silver price trends over the same period.
Since most funds in this category deliver similar returns, cost becomes a key differentiator. Even a small difference of 0.2%–0.3% in expense ratio can reduce your overall returns over a long period. This is especially important in gold funds where performance differences are otherwise minimal.
Most investors choose Fund of Funds (FoF) because they are easy to invest in without a demat account. ETFs, on the other hand, require a demat account and are traded on the stock exchange. They may offer slightly better pricing, but require more involvement. If you prefer simplicity, FoF is usually more suitable.
A higher Asset Under Management (AUM) generally indicates that the fund is widely used and has better liquidity. However, do not rely on size alone. Also, check whether the fund has maintained consistent performance and stable tracking over time.
This is where most decisions go wrong. Do not choose a fund just because it is popular or has recently performed well. If your goal is to reduce portfolio risk, gold funds are more suitable. However, if you are looking for additional growth and can handle fluctuations, silver funds can be considered as a smaller allocation.
Moreover, this is the approach experienced investors use when selecting the best gold and silver mutual funds, because it focuses on how the fund behaves, not just how it performed recently.
When comparing gold and silver mutual fund returns, the numbers may look similar over certain periods, but the underlying drivers and volatility can be very different.
|
Gold Fund Return Pattern |
Silver Fund Return Pattern |
|
Gold funds usually deliver steady and predictable returns over time. For example, in the last few years, most gold funds in India have delivered around 25–28% annualised returns over 5 years and slightly higher in shorter periods when gold prices moved up. The important point is not just the return percentage, but the consistency. Gold prices tend to move gradually, which means your investment does not see extreme swings in short periods. |
Silver funds can show higher gains in shorter timeframes, especially when industrial demand rises. However, these gains are not consistent. Silver prices tend to move sharply in both directions. A strong upward phase can be followed by quick corrections. Since most silver funds are relatively new, long-term return data is limited. This makes it harder to judge their consistency compared to gold funds. |
Now, what you need to understand here is that if you see similar returns between gold and silver recently, do not assume they behave the same.
Silver’s performance depends more on economic cycles, while gold depends more on global financial conditions. This difference is important when selecting the best gold and silver mutual funds.
Gold and silver mutual funds are often seen as “safe,” but they are not risk-free. The risks are different from equity funds, and you should understand them before investing.
Gold and silver prices are driven by global factors such as interest rates, inflation trends, and geopolitical events. This means prices can change even when there is no major development in India. As an investor, you may see periods where returns remain flat or decline despite stable local conditions.
These funds aim to replicate gold or silver prices, but they do not match them exactly. Differences arise due to fund expenses, cash holdings, and timing of investments. Over time, even a small tracking gap can affect your overall returns, especially if you stay invested for several years.
Gold and silver are globally priced in US dollars. In India, their prices are also influenced by the rupee’s movement against the dollar. For example, even if global gold prices remain stable, a weaker rupee can push domestic gold prices higher, and vice versa. This adds an extra layer of movement to your returns.
Silver has a strong industrial use. Its demand depends on sectors like solar energy, electronics, and manufacturing. If these sectors slow down, silver prices can fall quickly. This makes silver funds more volatile compared to gold funds.
Unlike equity funds, these funds do not invest in businesses that generate profits or dividends. Your returns depend entirely on price movement. If gold or silver prices do not increase over a period, your investment may not generate meaningful returns.
Moreover, understanding these risks helps you use the best gold and silver mutual funds correctly as a supporting allocation, not just as your primary growth investment.
These funds are useful only if you know why you are adding them.
You can consider them if:
On the other hand, you should avoid them if:
That being said, here’s a practical allocation approach. Many investors use:
This is a more balanced way to use the best gold and silver mutual funds.
There is no single answer when comparing gold and silver mutual funds.
Gold is generally viewed as the more stable precious-metal allocation and can be considered when the objective is portfolio diversification and protection. Silver tends to experience greater price movements and has additional exposure to industrial demand.
Therefore, the better choice depends on your investment objective, risk tolerance and existing portfolio. If you prioritise stability, gold may be more suitable. If you are comfortable with greater volatility and want exposure to silver's industrial demand, silver can be considered as a smaller allocation.
For many investors, the decision does not necessarily have to be gold vs silver. A combination of both may be considered depending on their overall asset allocation.
My Mudra helps you explore and compare financial products. If you are considering the best gold and silver mutual funds, we can simplify your decision process.
Also Read:
- How to Invest in Silver Mutual Funds in India
- Short-Term Debt Mutual Funds: Returns, Risks & Best Options
Some of the commonly chosen options include SBI Gold Fund, Nippon India Gold Savings Fund, HDFC Gold ETF FoF, and ICICI Prudential Gold ETF FoF. These funds have large AUM, consistent tracking, and reasonable costs.
Aditya Birla Sun Life Silver FoF, Axis Silver FoF, and Nippon India Silver ETF FoF are among the main options available. Since this category is new, selection should be based on fund structure and cost rather than long-term returns.
They are relatively stable compared to equity funds, but they are not risk-free. Prices depend on global markets, and silver funds in particular can be more volatile.
Gold funds focus on stability and wealth protection. Silver funds are more volatile and are influenced by industrial demand, which can lead to sharper price movements.
Yes, many investors use a combination. Gold provides stability, while silver can add growth potential. The allocation should be balanced based on your risk level.
Most funds allow SIP investments starting from ₹100–₹500. Lump sum investments typically start from ₹1,000, depending on the fund.
Gold funds are more stable and suitable for conservative investors. Silver funds may offer higher upside but come with higher risk. The better option depends on your investment goal.
Focus on expense ratio, tracking efficiency, AUM, and fund structure. Choose based on your purpose, stability or growth, rather than recent returns alone.
Head of Mutual Fund Distribution
Rajat Kulshrestha brings over seven years of experience in public markets, specialising in fundamental analysis and valuation frameworks. In his role as Mutual Fund Distribution Head, he oversees portfolio strategy, asset allocation decisions, and fund evaluation processes. On this blog, he offers structured, research-oriented perspectives on SME-listed companies, aiming to enhance financial literacy and analytical depth among market participants.
Mutual Fund · Aug 20, 2026
Explore the ideal number of mutual funds and discover how financial goals, risk profile and investment horizon influence your portfolio.
Mutual Fund · Aug 13, 2026
Understand how mutual funds can support retirement planning through SIPs during your working years and SWPs after retirement, along with fund selection, taxation and risk considerations.
Mutual Fund · Aug 8, 2026
Learn how inflation affects SIP returns, understand real returns, and see how long-term SIP investing can help manage inflation's impact.
