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Summary: Ever wondered why two Gold ETFs tracking the same metal show different NAVs? This piece breaks down the handful of reasons behind that gap, and why a lower NAV doesn't necessarily mean a cheaper or better fund.
Why are the NAVs of different gold ETFs different? – P R Dilip
If all gold ETFs ultimately track the same metal, why does one quote an NAV (net asset value) of a few thousand rupees and another quote far less? The difference rarely reflects fund quality but comes down to how each fund is structured.
There are three main reasons for the differences in the NAVs of gold ETFs.
#1 Gold denomination
ETFs differ in how much gold one unit represents. In most gold ETFs, one unit equals one gram of gold, but some funds peg a unit to a smaller quantity. A fund where one unit represents half a gram will naturally show a NAV roughly half that of a one-gram fund — even though the underlying gold is identical.
#2 Allocation to debt and cash
A gold ETF invests primarily in gold but may hold a small portion in debt and cash or cash equivalents for liquidity. The NAV is calculated by combining the value of all underlying assets (gold, cash and debt) and dividing by the number of units. Differences in this mix feed into NAV differences.
#3 Expense ratios
ETFs deduct expenses from the fund on a daily basis, so a difference in expenses translates into a difference in NAV. The higher the expense ratio, the lower the NAV and vice versa.
Also read: Why gold ETFs aren't always the cheaper choic
This article was originally published on April 30, 2013, and last updated on June 17, 2026.
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