As Diwali 2026 and Samvat 2083 approach, investors have more options than just buying physical gold jewelry or coins. Two popular alternatives are Gold Exchange-Traded Funds (ETFs) and Electronic Gold Receipts (EGRs), both of which allow investors to gain exposure to gold without the hassle of physical storage. However, these instruments differ in structure, trading, and redemption processes.
Gold ETFs represent ownership of units in a mutual fund scheme that tracks domestic gold prices and is backed by physical gold. These units can be bought and sold on stock exchanges like shares. In September 2026, 26 Gold ETFs collectively received inflows of ₹4,451 crore. EGRs, on the other hand, are electronic receipts representing ownership of physical gold deposited in a regulated vault. The National Stock Exchange (NSE) launched trading in the EGR segment in May 2026, offering products in 999 and 995 gold purity across six denominations.
Sachin Kabra, Co-founder of Foliyo.ai, explained that ETF investors own units in a fund tracking gold prices, while EGR investors own a receipt representing gold held in a regulated vault. ETF purchases typically start at one unit, whereas NSE lists EGR denominations starting at 10 mg. Kabra also noted that physical redemption for ETFs is subject to large-lot requirements, while EGRs allow for conversion of electronic receipts into physical gold.
Experts suggest that Gold ETFs are generally the simpler choice for most retail investors seeking gold exposure. Eshaan Lazarus, Founder & CEO of 021 Trade, highlighted that the average daily trading volume of Gold ETFs in India is around ₹200-300 crore, making them a more stable option compared to the relatively new EGR segment. Investors should compare expenses, tracking performance, liquidity, and trading spreads when choosing between these options.