Should investors combine gold SIP and gold ETF for better returns? Experts weigh in

Gold has been known to offer decent and steady returns over time, but ever since the Covid-led rally, the precious metal has never failed investors and has, in fact, garnered an annual average return not less than 25%. So, as the bullish momentum remains intact, and experts suggest a minimum allocation in gold for portfolio diversification and inflation hedge, here we discuss how you can build and boost your gold portfolio by combining the Gold SIP with Gold ETFs.

For laymen, gold ETF and gold SIPs are two different aspects; the former is the investment instrument backed by physical gold of high purity of 99.5%, while gold SIP is the systematic route of investment in gold.

Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd., President of India Bullion and Jewellers Association Ltd., and Chairman at Jain International Trade Organisation, said, Gold ETF and Gold SIPs are complementary strategies serving different investor needs.

“A Gold ETF is your core, strategic holding — regulated, transparent, low-cost, and now valued using domestic MCX spot prices under SEBI's 2026 framework. Target a lump-sum ETF position when prices dip toward support levels. A Gold SIP, whether through an ETF or digital gold platform, is your disciplined, emotion-free accumulation engine. Target a monthly SIP of at least ₹2,000–₹5,000, regardless of price direction. Together, they deliver rupee-cost averaging, compounding discipline, and portfolio stability.”

Start both this Akshaya Tritiya — auspiciousness and financial wisdom rarely align this perfectly, he added.

Renisha Chainani Head- Research at Augmont, giving out a similar viewpoint said, “Gold ETFs offer stable, consistent returns driven by macro factors like central-bank buying and inflation, making them ideal as a core portfolio holding with relatively lower volatility.”

Similarly, digital gold and SIPs enable disciplined accumulation and reduce timing risk.

Viraaj Shah CFO (Sunil Gold) said, “ A Gold ETF works best for investors who have a lump sum and want liquidity, price transparency, and the ability to enter or exit tactically. A Gold SIP, on the other hand, is ideal for building exposure gradually, averaging out price volatility and instilling discipline over time.”

For a decent gold portfolio, Shah mentioned that gold is best viewed as a hedge and portfolio stabilizer, and a 10–15% exposure is typically sufficient for most investors. The smarter approach is to use SIPs to build this allocation steadily, and ETFs to adjust or rebalance when needed, combining discipline with flexibility rather than choosing one over the other, he added.