The cheapest gold FoF is still costlier than you'd think

Summary: Most investors compare only the headline expense ratio. That’s the mistake. Here’s what you’re really paying for a gold FoF and how it stacks up against ETFs. How do I calculate the expenses of a Gold ETF versus a Gold FoF? I see the expense ratio used for comparison. SBI Gold FoF shows an expense ratio of 0.1 per cent, which seems much lower than typical ETFs. Please explain how to evaluate and compare them  – Anantha PS Numbers can be dangerously persuasive. A gold ETF has an average expense ratio of 0.5 per cent. A gold FoF is usually lower at 0.2 per cent. This immediately declares FoF as the cheaper option. But this is one of those comparisons where the factsheet can be technically correct and still leave you with the wrong conclusion. A gold FoF can display a lower expense ratio and still be costlier than an ETF. The answer to this lies in knowing how FoFs are structured and how they work. Why FoFs appear cheaper than they are Start with how the two products are built. A gold ETF is straightforward, which holds physical gold and charges an expense ratio, say 0.5 per cent. That is the cost you bear annually, adjusted in the NAV. A gold

This article was originally published on February 23, 2026.