A decade-long comparison of gold ETFs and index mutual funds showcases their differing roles, with equity funds generally favouring higher returns.

Investing over a decade provides a stark comparison between asset classes, especially when weighing gold ETFs against index mutual funds. Gold ETFs are financial products that track the price of gold, providing exposure to the yellow metal without physically owning it, while index mutual funds are a diversified basket of equities replicating stock market indices. Both serve distinct roles in a portfolio but differ significantly in terms of objectives, risk factors, and long-term returns. Gold, celebrated as a safe haven in volatile times, offers portfolio stability and holds its place as a store of value, particularly during inflation or economic uncertainty. On the other hand, index mutual funds are designed to harness long-term equity growth powered by economic expansion, innovation, and market vibrancy. Over the last decade, equity-based index funds have typically outperformed gold ETFs in terms of returns, reflecting the underlying growth and performance of financial markets during the period. However, such returns can be cyclical, and factors like global economic slowdown or major crises might narrow the gap between the two assets. For an investor placing Rs 10 lakh in these instruments a decade ago, equity funds likely delivered greater cumulative value, offering compounding advantages over gold ETFs, which can often mirror gold’s relatively static pricing trends. Nonetheless, each investor’s choice should be aligned with their financial goals, risk appetite, and need for diversification. The investment story across a ten-year horizon demonstrates how understanding asset behaviours and their interactions with the broader economy forms the cornerstone of building a resilient portfolio.