Nippon India ETF Gold BeES: Give your portfolio the gold advantage

With the festive season approaching, buying gold jewellery is part of festivities of many Indian households. The wedding season that will follow is one of the busiest periods for jewellers in India. Gold is considered to be an auspicious metal according to our ancient cultural traditions, at the same time, it has great economic significance as an asset class since time immemorial.

Gold as an asset class

Gold has been considered a store of value since ancient times. Gold is a scarce metal. Its physical properties do not erode over time i.e. it does not rust, corrode or lose its chemical integrity for thousands of years. Unlike other commodities, gold retains its purchasing power over time (see the chart below).

Source: MCX spot prices, World Bank, as of 31^st December 2025

Gold as a safe haven asset

Gold acts as the traditional safe haven asset in times of wars, geo-political uncertainties and economic crisis. In times of economic uncertainty when equity underperforms, gold provides stability to your portfolio (see the chart below). In times of geo-political and economic crises, investors tend to shift their asset allocation to gold causing gold prices to appreciation during market downturns or economic slowdown.

Source: NSE, MCX spot prices, Advisorkhoj, as of 31^st October 2026

Role of gold in diversifying asset allocation

• Gold, as an asset class, is often counter cyclical to equities. Gold outperforms when equity underperforms and vice versa (see the chart below).
  
  

  

  Source: NSE, MCX, as on 31^st October 2026. Equity is represented by Nifty 50 TRI and Gold by MCX spot prices



• Gold has low correlation with debt (see the chart below). Gold adds richer diversification to your portfolio beyond traditional asset allocation.
  
  

  

  Source: NSE, MCX, as on 31^st October 2026. Debt is represented by Nifty 10 year Benchmark G-Sec Index and Gold by MCX spot prices

Gold is a hedge against currency

Gold is a hedge against currency. Since gold is priced in USD globally, when the INR depreciates versus dollar, the price of gold increases (see the chart below). You can benefit from the depreciation in Indian Rupee by investing in gold.

Source: MCX, Bloomberg, as on 31^st October 2026

Central banks increasing their gold purchases

Central banks usually add gold in their reserves to diversify from fiat currencies like the US Dollar. Over the last few years, central banks have increased their gold purchases due to increasing geo-political risks and threat of sanctions (see chart below). This trend is likely to continue in the future also. Gold purchases by central banks are likely to drive the price of gold higher in the long term, even though it may be volatile in interim periods due to various factors e.g. high US Treasury Bond Yields.

Source: World Gold Council, as of 31^st December 2025

How to invest in Gold?

Though physical gold, especially in the form jewellery is the traditional way of buying Gold, investment experts recommend Gold as a financial asset for investment purposes. There are a number of benefits of investing in Gold as a financial asset rather than physical asset:-

• Gold in the form of jewellery has impurities, which will get deducted from the value of Gold if you are selling or remaking your gold jewellery.


• Gold jewellery cost includes making charges. Fashion changes over time and you may have the remake the jewellery again, if you plan to gift to your children or their spouses in the future. If you are buying Gold for the purpose of your child’s marriage, it is better to buy it as a financial asset, so that you can avoid double making charges and impurities.


• Gold in physical form involves storage charges i.e. bank locker charges. Gold in financial form does not require separate storage costs.

You can invest in Gold in the financial form by investing in Gold ETFs or Gold Fund of Funds, which are mutual fund schemes which invest in Gold ETFs. In this article we will review Nippon India ETF Gold BeES.

Nippon India ETF Gold BeES

Gold exchange-traded fund (or Gold ETF) is an exchange-traded fund (ETF) that aims to closely track the price of gold. Unlike gold jewellery which invariably has impurities Gold ETF units represent the value of pure 24 carat gold. The units of the gold ETFs are traded on the stock exchange just like shares of a company. There are a number of gold ETFs listed on the stock exchanges. To buy and sell gold ETFs on the stock exchange you need to have demat and trading accounts. Nippon India ETF Gold BeES is the oldest Gold ETF in India. It aims to track the domestic price of Gold.

Why invest in Nippon India ETF Gold BeES?

• Low tracking error: Nippon India ETF Gold BeES has lower tracking compared to most of its Gold ETF peers (see the chart below).
  
  

  

  Source: AMFI, Advisorkhoj Research, as on 30^th September 2026



• Liquidity: ETF units can only be sold in stock exchanges, unless you are transacting in lot sizes (creation unit size). Liquidity is a concern for ETF investors, since you need to find a buyer if you are selling in stock exchanges. Average daily trading volumes of an ETF is an indicator of liquidity.
  
  

  

  Source: NSE, Advisorkhoj Research, as on 30^th September 2026



• Low premium / discount over NAV: ETF transactions (unless in creation unit sizes) are based on market price. The NAV of an ETF is the indicator of the fair price of the ETF. An ETF can trade at premium or discount to the NAV. The premium or discount of market price of Nippon India ETF Gold BeES over its NAV is usually very low.


• Invest with a small amount: Buying gold jewellery usually involves considerable cost. However, you can invest in gold with a small amount by investing in Nippon India ETF Gold BeES. If you are investing in ETFs through stock exchange, the minimum investment amount is the cost of 1 unit. If you want to invest in Gold for your children’s marriage you do not have save a large amount of money for buying jewellery. Simply, keep buying gold ETF units are regular intervals from your regular savings over a long period of time.


• Invest / redeem with the AMC in lot sizes: If you are transacting in lot sizes (creation unit size), then you can invest or redeem Nippon India ETF Gold BeES units directly with the AMC. The creation unit size of Nippon India ETF Gold BeES is 120,000 units of the ETF.

Conclusion

Gold is an auspicious investment for many Indian families. You can invest in gold for purposes of asset allocation, children’s marriage or leaving an estate for your loved ones. Gold ETF is the cheapest and safest way of purchasing Gold. If you do not have a demat account and / or are not comfortable trading in stock exchanges, you can invest in Nippon India Gold Savings Fund, which invests in Nippon India ETF Gold BeES. You should consult with your financial advisors or mutual fund distributors if Nippon India ETF Gold BeES is suitable for your gold investing needs.