Nippon India ETF Gold BeES and Gold Savings Fund: Add stability to your portfolio in uncertain markets

Current market scenario

Global financial markets have been roiled after outbreak of war in the middle east. The war has caused major disruptions in global oil and gas supplies. Brent crude price has surged past $100 per barrel. The Dow Jones is down 6% since the war began. The Nifty 50 has fallen by 9% and is now close to 23,000 level while the Sensex has broken below the 75,000 level. Unlike the 12 day War in June 2025, we are already in the third week of the war. The conflict seems to be escalating with Iran targeting energy infrastructure of the Gulf States. While the stock market is tanking, gold prices are holding firm. In uncertain market conditions, investors often turn to safe have assets like gold. In this article, we will discuss how you can use exchange traded funds and gold fund of funds, to invest in gold.

Why invest in gold?

• Gold, as an asset class, is often counter cyclical to equities. Gold outperforms when equity underperforms and vice versa (see the chart below). Gold provides risk diversification in your investment portfolio
  
  

  

  Source: NSE, MCX, as on 31^st December 2025. Equity is represented by Nifty 50 TRI and Gold by MCX spot prices



• Gold is also seen as a long term hedge against inflation. Historically, gold has beaten inflation (see the chart below). However, there might be periods when gold can give below inflation returns. You need to long investment horizons for gold.
  
  

  

  Source: MCX, World Bank as on 31^st December 2025.



• 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 28^th February 2026.



• With war raging in the Middle East, the repercussion on the global economy is unknown. Rising energy prices will undoubtedly lead to higher inflation. With the Strait of Hormuz virtually closed, through which the 20% of world's oil and LNG flows, recession risks are likely to increase. Historically, gold has usually outperformed in times of economic recession and high inflation.

Why you need to start early?

In the last 20 years, price of gold has gone up almost 20X from around Rs 8,000 (per 10 grams) in 2006 to around Rs 1.6 lakhs (per 10 grams). If you are planning to gift gold to your children during their weddings or other auspicious occasions, you should start investing systematically in gold from an early age, so that you can accumulate gold at relatively lower cost.

Source: MCX, as on 28^th February 2026.

How to invest in Gold?

Though physical gold, especially in the form of 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 to 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. In this article we will discuss about Nippon India ETF Gold BeES and Nippon India Gold Savings Funds which are Gold ETF and Gold Fund of Funds respectively.

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: The tracking error of Nippon India ETF Gold BeES is only 0.33%. This is one of the lowest tracking errors among all Gold ETFs.


• 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. The 52 week daily average trading volume of Nippon India ETF Gold BeES is in National Stock Exchange is 98.6 million (986 lakhs), one of the highest among all gold ETFs.


• 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 to save a large amount of money for buying jewellery. Simply, keep buying gold ETF units at 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.

Nippon India Gold Savings Fund

As mentioned earlier, you need to have demat and trading account for investing in ETFs. If you do not have a demat account and do not want to setup one, simply for the purpose of buying Gold, you can invest in Gold fund of funds. Nippon India Gold Savings Fund is the oldest gold fund of funds in the mutual fund industry in India and has completed 15 years since launch. The FOF invests in Nippon India ETF Gold BeES.

Why invest in Nippon India Gold Savings Fund?

• Low cost: Nippon India Gold Savings Fund has the lowest TER among all Gold FOFs. The total expense ratio (TER) of the scheme for regular plan is 0.35% only. Lower the cost, lower is the tracking error i.e. the difference in Net Asset Value (NAV) of the scheme and actual Gold Price.


• Invest with a small amount: The minimum investment amount for Nippon India Gold Savings Fund is just Rs 100 and multiples thereafter.


• Invest through SIP: If you want to invest in Gold for your children's marriage you do not have to save a large amount of money for buying jewellery. Simply, keep investing in Nippon India Gold Savings Fund from your regular savings over a long period of time through SIP.


• Invest / redeem with the AMC: The biggest advantage of a Gold Fund of Funds is that, you do not have to sell your units in the stocks exchange, where the market price may be different from the NAV. You can redeem your units of Nippon India Gold Savings Fund directly with the AMC.

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 Gold fund of funds. You should consult with your financial advisors or mutual fund distributors if Nippon India ETF Gold BeES and Nippon India Gold Savings Fund are suitable for your gold investing needs.