September 2025’s Top Gold ETFs: Which Funds are Leading the Precious Metal Rally?

Gold has always been a safe haven for investors during times of economic uncertainty. In September 2025, with global markets experiencing volatility and inflation on the rise, gold has surged to unprecedented heights, reaching over $3,600 per ounce. This has led to a renewed interest in gold ETFs, offering investors a convenient way to gain exposure to this precious metal. As of mid-2025, the Indian gold ETF market has surpassed ₹60,000 crore in assets under management, reflecting the rising demand for easy, cost-effective ways to invest in gold. But which gold ETFs are leading this precious metal rally? This blog will explore the top-performing gold ETFs in September 2025, examining their performance, expense ratios, and investment strategies.

Gold’s Blockbuster Year: A Perfect Storm of Factors

Gold has had a blockbuster year, with domestic prices up more than 40% in 2025. This surge has been driven by several factors:

Federal Reserve Rate Cut Expectations: Weak economic data and cooling inflation have increased the likelihood of the U.S. Federal Reserve cutting interest rates. A September rate cut now has a high market probability. Lower interest rates reduce the appeal of interest-yielding assets, making non-yielding assets like gold more attractive.
Geopolitical Tensions: Ongoing global conflicts and diplomatic standoffs have accelerated investor flight to safe-haven assets, with gold being the primary beneficiary.
Central Bank Buying: Central banks, especially in Asia, have been consistently purchasing gold, providing strong demand support.
Weakening U.S. Dollar: The U.S. dollar’s weakness has made gold more affordable for international buyers, stimulating global demand.

Top-Performing Gold ETFs in September 2025

Several gold ETFs have delivered stellar gains in 2025, benefiting from the powerful rally in gold prices. Here are some of the top performers:

Franklin Responsibly Sourced Gold ETF (FGDL): This ETF has the best one-year performance, with gains of over 44%. Its expense ratio is 0.15%.
iShares Gold Trust Micro ETF (IAUM): IAUM offers the lowest expense ratio at 0.09% and a one-year return of over 44%.
SPDR Gold Trust (GLD): GLD is the most liquid gold ETF, making it ideal for active trading strategies. Its expense ratio is 0.40%, and its one-year performance is also around 44%.
HDFC Gold ETF: This fund delivered approximately 38% returns in the past year. Over the last 5 years, it has given around 15% annualised returns, and over the last decade, it has compounded at approximately 13% annually.
UTI Gold ETF: Topped the list with approximately 39% returns over the last year. Its 5-year and 10-year annualised returns stand at approximately 14% and approximately 13%, respectively.

Gold ETFs in India

The Indian gold ETF market has also seen significant growth. Some of the top Gold ETFs in India include:

Nippon India ETF Gold BeES: This ETF invests in 99.5% pure gold bullion and has delivered competitive returns.
SBI Gold ETF: SBI Gold ETF is another popular choice, offering investors a convenient way to invest in gold.
Kotak Gold ETF: Kotak Gold ETF aims to closely match the returns of gold in the domestic market.
HDFC Gold Exchange Traded Fund: HDFC Gold ETF provides investors with an option to invest in gold without the need to physically store it.
ICICI Prudential Gold ETF: ICICI Prudential Gold ETF is designed to replicate the performance of gold in India.

Factors to Consider When Choosing a Gold ETF

When selecting a gold ETF, investors should consider the following factors:

Expense Ratio: The expense ratio is the annual fee charged by the ETF. Lower expense ratios translate into higher retained returns for investors over time.
Liquidity: Liquidity refers to the ease with which ETF shares can be bought and sold. Higher liquidity is generally better, as it allows investors to enter and exit positions quickly.
Tracking Error: Tracking error is the difference between the ETF’s performance and the performance of the underlying gold price. Investors should look for ETFs with low tracking errors.
Investment Strategy: Some gold ETFs track the price of gold, while others invest in gold mining companies. Investors should choose an ETF that aligns with their investment goals and risk tolerance.

Risks of Investing in Gold ETFs

While gold ETFs offer several benefits, investors should also be aware of the risks:

Price Volatility: Like physical gold, the price of gold ETFs is subject to fluctuations based on market demand, international gold prices, and economic factors.
Tracking Error: Gold ETFs aim to replicate the performance of gold, but slight discrepancies can arise due to management fees, storage costs, and other operational factors.
Liquidity Risks: While gold ETFs are traded on stock exchanges, liquidity risks can arise if there are few buyers or sellers in the market.

The Rise of Silver

While gold has captured most of the headlines, silver’s performance has been equally impressive. Silver has surged to its strongest position since 2011, driven by its dual appeal as both an industrial commodity and a monetary asset. The anticipated shift in Federal Reserve monetary policy stands as perhaps the most significant catalyst for silver’s impressive rally.

Conclusion

September 2025 has been a remarkable month for gold ETFs, with several funds delivering strong performance amid a precious metal rally. The surge in gold prices has been driven by a combination of factors, including Federal Reserve rate cut expectations, geopolitical tensions, central bank buying, and a weakening U.S. dollar. Investors seeking to capitalize on this trend should carefully consider the factors mentioned above when choosing a gold ETF.