Precious Metal ETFs: A Strategic Diversification Tool

Investor Takeaway

Gold and silver exchange-traded funds (ETFs) have generated significant returns in recent years, with some funds delivering returns of up to 82.32% and 171.30% over one year. However, investors should exercise caution and consider the risks involved before investing in these assets.

Performance Overview

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

Gold ETFs

• Quantum Gold ETF delivered the highest 1-year return at 82.32%
• UTI Gold ETF showed greater consistency over 2 to 10-year time horizons
• Returns from 13 gold ETFs ranged from 16.65% to 82.32% as of February 25, 2026
• Domestic futures gold gained nearly 87% from a year ago

Silver ETFs

• Tata Silver ETF emerged as the top-performing asset with a 1-year return of 171.30%
• ICICI Prudential Silver ETF outperformed its peers with a 2-year return of 92.19%
• Returns from 10 silver ETFs ranged from 57.19% to 168.85% as of February 25, 2026
• Domestic silver futures gained nearly 181% from a year ago

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

Key Considerations

• Risk level: High
• Tracking error: Differences between ETF prices and physical metal prices
• Expense ratio: Investors should evaluate the expense ratio before investing
• Volatility: Experts advise investors to assess volatility before investing

Strategic Diversification

Piyush Jhunjhunwala, Founder & CEO of Stockify, recommends using gold and silver ETFs as strategic diversification tools in an overall portfolio. He advises investors to allocate between 5-15% of their portfolio to these asset classes based on their personal risk tolerance.