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Gold ETFs Deliver Up to 61% Gains Since Last Akshaya Tritiya: Time to Exit Now?
In India, purchasing gold transcends mere investment—it’s steeped in cultural significance. Festivals like Akshaya Tritiya are particularly auspicious for buying gold, symbolizing prosperity and long-term wealth. In this context, gold exchange-traded funds (ETFs) have emerged as a smart modern alternative for investors.
Outstanding Performance of Gold ETFs
Gold ETFs have reported remarkable returns of up to 61% since the last Akshaya Tritiya, according to an analysis by ETMutualFunds. As the demand for gold as an inflation hedge continues to rise, market expertise suggests that maintaining allocation discipline is crucial. Investors should proactively manage their portfolios by booking profits when their gold exposure exceeds set targets.
Key Insights from Experts
– Akshat Garg, Head of Research & Product at Choice Wealth, emphasizes aligning profit booking with long-term asset allocation. If gold surpasses the target weight of 5-15%, trim exposure by 20-30% and reallocate to underweight assets like equities or debt.
– Vishal Dhawan, Founder & CEO of Plan Ahead Wealth Advisors, reiterates that sensible profit-booking should be applied with portfolio discipline in mind. He advises against exiting gold solely due to strong returns, as it plays a critical role in diversifying and cushioning portfolios during market stress.
Factors Fueling the Gold Rally
The impressive rise in gold ETF returns can be attributed to various global dynamics, including:
– Geopolitical tensions
– Strong central bank buying
– A more favorable interest rate outlook
– Persistent macroeconomic uncertainties
Gold’s position as a safe-haven asset has been bolstered as investors seek refuge from market volatility, highlighting demand not only for short-term gains but also as a hedge against inflation.
Performance of Notable Gold ETFs
Since Akshaya Tritiya on April 30, 2025, gold ETFs have delivered an average return of 59.63%. The top performers include:
– Tata Gold ETF: +60.59%
– Aditya Birla SL Gold ETF: +60.27%
– ICICI Pru Gold ETF: +60.22%
– Zerodha Gold ETF: +60.12%
– Kotak Gold ETF: +60.06%
– Quantum Gold Fund ETF: +58.55%
Is the Surge Sustainable?
While returns have been impressive, the sustainability of this rally remains in question. Valuations might seem stretched after such rapid gains, yet the structural demand for gold endures. Garg suggests that the rally’s foundation—particularly ongoing Asian and central bank demand, alongside macroeconomic hedging benefits—remains robust. Long-term investors are encouraged to continue systematic investment plans (SIPs) with targeted allocations of 5-10%.
Timing the Market: When to Invest?
Geopolitical uncertainties complicate the gold investment narrative. Factors such as energy price spikes and central bank policies indicate potential volatility ahead. As suggested by Dhawan, lump-sum investors waiting for corrections could find it emotionally appealing but practically challenging, as market rallies are usually ignited by unpredictable events.
For strategic long-term allocation, a staggered approach over timing the market is advisable. Maintaining a 5-10% exposure to gold effectively balances risk and rewards in a diversified portfolio.
Historical Performance and Future Expectation
In the last six months, gold ETFs achieved a gain of up to 21.19%, while the last nine months saw returns of up to 55%. So far in the current calendar year, an approximate gain of 16% has been noted, with LIC MF Gold ETF leading at a return of 15.50%.
Looking ahead, experts forecast consolidation prices of $4,000-$5,000 per ounce through 2026-27, driven by policy easing, steady demand, and geopolitical risks. While the medium-term outlook remains positive, investors should brace for corrections and fluctuations in ETF inflows.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of The Economic Times.)
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