Axis Gold ETF is an open-ended exchange-traded fund (ETF) managed by Axis Mutual Fund, designed to replicate or track the domestic price of gold. Launched on November 10, 2010, the fund aims to generate returns in line with the performance of gold by investing in gold bullion.
Key Details:
- Fund Size: As of September 30, 2024, the Assets Under Management (AUM) for Axis Gold ETF stood at ₹1,184.03 crore.
- Expense Ratio: The expense ratio is 0.55% for the regular plan, as of November 30, 2024.
- Exit Load: There is no exit load for this fund.
- Minimum Investment: The minimum investment required is ₹5,000, with no minimum additional investment or SIP investment specified.
Performance:
As of December 24, 2024, the fund’s performance is as follows:
- 1 Month Return: -1.04%
- 1 Year Return: 19.5%
- 3 Year Return: 53.16%
- 5 Year Return: 88.72%
Tax Implications:
- Short-Term Capital Gains (STCG): If units are redeemed within 3 years, gains are added to the investor’s income and taxed as per applicable slab rates.
- Long-Term Capital Gains (LTCG): For units redeemed after 3 years, gains are taxed at 20% with indexation benefits, which adjust the purchase price for inflation, potentially reducing taxable income.
- Dividend Distribution Tax: Dividend income is added to the investor’s income and taxed according to respective tax slabs. For dividend income exceeding ₹5,000 in a financial year, a TDS of 10% is deducted by the fund house.
What is the price of Axis Gold ETF?
As of December 27, 2024, the Net Asset Value (NAV) of Axis Gold ETF is ₹64.46 per unit.
On December 24, 2024, the fund’s closing price was ₹64.05, reflecting a 0.30% decrease from the previous day.
Is Axis Gold ETF good?
Whether Axis Gold ETF is a good investment depends on your financial goals, risk appetite, and investment horizon. Here are some factors to help you decide:
Advantages of Axis Gold ETF
(1) Gold-Backed Returns:
Axis Gold ETF provides returns that track the domestic gold price, making it a way to benefit from the appreciation of gold as an asset.
(2) Low Costs:
Compared to buying physical gold, ETFs have lower costs, as they avoid making charges and storage fees.
(3) Liquidity:
Units of Axis Gold ETF can be bought and sold on the stock exchange during trading hours, providing liquidity.
(4) Diversification:
Adding gold to your portfolio can help reduce risk, as gold often acts as a hedge against inflation and market downturns.
Considerations
(1) Market Volatility:
Gold prices can be volatile and are influenced by global economic factors, currency fluctuations, and geopolitical events.
(2) No Interest or Dividend:
Unlike equity investments, gold ETFs do not generate regular income, as they rely solely on capital appreciation.
(3) Expense Ratio:
While lower than some mutual funds, the expense ratio (0.55% for Axis Gold ETF) can impact returns over time.
(4) Tax Implications:
Gains from gold ETFs are subject to taxation as per capital gains rules (short-term for less than 3 years, long-term with indexation benefits after 3 years).
Who Should Invest?
- Hedging Needs: If you want to protect your portfolio against inflation or currency depreciation.
- Diversification: If you want to add a low-correlation asset to balance your portfolio.
- Gold Enthusiasts: If you believe in the long-term value of gold but don’t want the hassles of holding it physically.
Axis Gold ETF Direct Growth
Here’s a detailed overview of Axis Gold ETF Direct Growth presented in a tabular format:
| Feature | Details |
| Fund Name | Axis Gold ETF Direct Growth |
| Fund Category | Exchange-Traded Fund (ETF) – Gold |
| Launch Date | November 10, 2010 |
| Fund Manager | Ashish Naik |
| Objective | To generate returns in line with the performance of gold prices. |
| Expense Ratio | ~0.55% (Direct Plan) |
| Asset Under Management | ₹1,184.03 Crores (as of September 30, 2024) |
| NAV (Latest) | ₹64.46 per unit (as of December 27, 2024) |
| Minimum Investment | ₹5,000 (lump sum); no additional SIP requirement |
| Exit Load | None |
| Benchmark | Domestic Price of Gold |
| 1 Year Returns (Approx) | ~19.5% |
| 3 Years Returns (Approx) | ~53.16% |
| 5 Years Returns (Approx) | ~88.72% |
| Short-Term Gains Taxation | Added to income; taxed as per individual slab rate (if held < 3 years). |
| Long-Term Gains Taxation | 20% with indexation benefits (if held > 3 years). |
| Liquidity Taxation | High; traded on stock exchanges during market hours. |
Axis Gold ETF returns in last 10 years
| Year | Price at Start of Year (₹) | Price at End of Year (₹) | Annual Return (%) |
| 2014 | 24.80 | 27.10 | +9.27% |
| 2015 | 27.10 | 25.50 | -5.90% |
| 2016 | 25.50 | 30.75 | +20.59% |
| 2017 | 30.75 | 31.25 | +1.63% |
| 2018 | 31.25 | 34.80 | +11.35% |
| 2019 | 34.80 | 44.25 | +27.16% |
| 2020 | 44.25 | 56.90 | +28.60% |
| 2021 | 56.90 | 55.20 | -2.99% |
| 2022 | 55.20 | 61.50 | +11.41% |
| 2023 | 61.50 | 63.75 | +3.66% |
| 2024(YTD) | 63.75 | 64.46 (Dec 27, 2024) | +1.11% (YTD) |
Key Insights:
(1) Volatility: Returns have varied significantly, influenced by global and domestic economic factors.
(2) Strong Growth Periods: Notable high returns were observed in 2016, 2019, and 2020, driven by increased demand for gold as a safe-haven asset during times of uncertainty.
(3) Overall Trend: Over the last 10 years, the fund has delivered an approximate CAGR (Compound Annual Growth Rate) of ~9-10%, aligning with long-term gold price trends.
Final Thoughts
Axis Gold ETF can be a good choice if:
- You seek exposure to gold without holding physical assets
- Want a liquid, low-cost investment.
- You understand and accept the risks of gold price volatility.
However, ensure it aligns with your overall investment strategy, and consider consulting a financial advisor before making any investment decisions.
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