Gold ETFs, particularly Nippon India ETF Gold BeES (Gold BeES), offer a convenient way to invest in gold without the need to physically hold the precious metal. These Exchange Traded Funds (ETFs) mirror the price movements of physical gold, providing investors with a transparent and efficient investment avenue.

What are Gold ETFs and Gold BeES?

Gold ETFs are commodity-based Mutual Funds that invest in assets like gold bullions or futures contracts. The price of a Gold ETF is directly linked to the price of gold, so any movement in gold price is reflected in the ETF's price. Gold BeES, or Gold Benchmark Exchange Traded Schemes, are open-ended ETFs designed to replicate the price movements of physical gold. Launched in March 2007, Nippon India ETF Gold BeES is one of the oldest and most traded gold ETFs in India. Each unit of Gold BeES represents a small quantity of gold, typically 0.01 gram, in dematerialized form, backed by physical gold bullion of 99.5% purity.

How Gold BeES Works

When investors buy units of Gold BeES, the fund manager uses the pooled investment to purchase physical gold in the form of bars and coins (bullion). These units are stored with a custodian on behalf of the bank. The value of the Gold BeES units then fluctuates in line with the price of gold, allowing investors to benefit from gold price appreciation.

Advantages of Investing in Gold ETFs

• Convenience: Gold ETFs offer a hassle-free way to invest in gold without the need for physical storage or concerns about purity.
• Liquidity: Gold ETFs are highly liquid, just like stocks, and can be easily bought and sold on stock exchanges. This high liquidity ensures that investors can easily buy or sell their Gold ETF units without significantly affecting the market price.
• Low Cost: Investors can buy the desired quantity of gold at a low cost in the form of ETF units.
• Diversification: Gold ETFs allow investors to diversify their portfolios and hedge against inflation.
• Transparency: Gold ETFs offer a transparent investment mechanism, as their prices are directly linked to the price of gold.

Performance of Gold ETFs

Gold ETFs have delivered impressive returns in recent years. For example, a monthly SIP of ₹10,000 in Nippon India ETF Gold BeES over the past five years would have grown to ₹9.83 lakh, with an XIRR of 20.50%. As of July 7, 2025, the Net Asset Value (NAV) of Nippon India ETF Gold BeES is ₹80.46. The fund has provided returns of 32.21% in the last one year, 21.14% in the last three years, 13.73% in the last five years, and 12.4% since its launch.

Investing in Gold BeES

Investing in Gold BeES is simple and can be done through a regular Demat account. Here are the general steps:

1. Open a Demat and trading account with a broker.
2. Log in to your trading account and search for "Gold BeES" or the ticker symbol "GOLDBEES".
3. Place a buy order for the desired number of units.
4. Units will be credited to your Demat account upon execution of the order.

Key Considerations

• Expense Ratio: Gold ETFs have an expense ratio, which is a percentage of the fund's assets deducted to cover management and operational costs.
• Market Risk: Investments in Gold ETFs are subject to market risks, and the value of the investment may fluctuate.
• Investment Horizon: A long-term investment horizon of greater than 3 years is suggested to reduce downside risk and ensure more predictable returns.

Nippon India ETF Gold BeES is managed by Vikram Dhawan since February 23, 2022. The fund's objective is to provide returns that closely correspond to the returns provided by the domestic price of gold through physical gold. While the fund aims to replicate the price of gold, performance may vary due to expenses and other factors.