Gold, silver commodity based funds shine with 51% annual returns

New Delhi: Gold and silver commodity based funds have delivered similar stellar returns of around 51 per cent over the past year, but experts say investors should focus on volatility and risk-adjusted performance rather than just returns. Historically, gold has provided better returns per unit of volatility, making it a more stable investment than silver.

“Silver is more volatile. While it could outperform gold in the short term, gold remains the preferred long-term asset class due to its relatively lower volatility,” said Prasanna Pathak, Deputy CEO, The Wealth Company Mutual Fund. Certified Financial Planner Pallav Agarwal added that silver’s industrial demand can drive short-term gains, but gold offers better capital preservation.

Gold funds and ETFs delivered an average return of 50.94 per cent in the past year, with Tata Gold ETF leading at 52.27 per cent. Silver ETFs averaged 51.14 per cent, with Tata Silver ETF topping at 52.81 per cent. Over three years, gold funds and ETFs returned about 32 per cent, while silver ETFs gained around 33 per cent.

Advisors recommend maintaining a 15–20 per cent gold allocation in long-term portfolios for stability, with a tactical 5–10 per cent allocation to silver during industrial upcycles. “Gold also acts as a hedge against equity volatility and inflation, forming a vital part of an asset-allocation framework,” Pathak noted. Investors can gain exposure through multi-asset allocation funds that invest in equity, debt, and commodities, offering diversification and tax efficiency.

Gold futures on MCX traded at Rs 1,20,702 per 10 grams, while silver stood at Rs 1,47,660 per kg, both showing mild gains. Analysts expect the recent correction in both metals to be a healthy pause before the next uptrend. Experts remain bullish on gold and silver over the next 3–5 years, citing expectations of US rate cuts, persistent inflation, and geopolitical uncertainties as key tailwinds for precious metals. Agencies