The Edelweiss Gold and Silver ETF Fund of Funds (FoF) posted a 7.4% return over the last six months, outperforming competitors like Kotak Gold Fund and SBI Gold. While this fund shows higher returns across multiple timeframes, investors should be aware of the added price volatility that comes from including silver in the portfolio compared to pure gold funds.
What Happened
The Edelweiss Gold and Silver ETF Fund of Funds (FoF) has emerged as the top performer in the gold mutual fund category over the past six months, delivering a return of 7.4% as of June 24, 2026. This performance was notably higher than its peers in the category. For instance, the Kotak Gold Fund and the SBI Gold Fund recorded returns of 3.9% and 3.8% respectively during the same period. The data focuses on funds with an asset base exceeding Rs 1,500 crore, providing a comparable group for investors.
Performance vs Peer Funds
While the Edelweiss fund topped the six-month return charts, investors often look at the size of the fund as an indicator of stability. The SBI Gold Fund holds the largest corpus among the top five funds in this peer group, with assets under management (AUM) of Rs 16,532.9 crore. Larger funds typically provide better liquidity, though smaller funds like the Edelweiss offering may show more aggressive returns due to their specific portfolio composition.
The Gold and Silver Difference
It is important for investors to understand that the Edelweiss fund is not a pure gold fund. It functions as an ETF Fund of Funds (FoF) that provides exposure to both gold and silver. Silver is generally more volatile than gold, meaning it can experience sharper price swings—both up and down. This structural difference explains why the fund's returns may differ significantly from traditional gold-only funds. When global demand for silver fluctuates or industrial use cases shift, the performance of this fund will likely be impacted differently than a pure gold investment.
Historical Returns and Volatility
The fund has shown strong growth over longer horizons, with a one-year return of 75.2% and a three-year return of 40.3%. These figures have significantly outperformed their respective benchmarks. However, investors should be cautious when viewing high historical returns in commodity-based funds. Gold and silver prices are driven by global macroeconomic factors, such as central bank policies, inflation, and currency movements. A high return in the past does not guarantee similar results in the future, especially if metal prices correct.
What Investors Should Monitor
Investors looking at this fund should track a few key factors. First, evaluate the fund's expense ratio, which is the annual cost of managing the fund, as FoFs often have slightly higher costs due to the underlying ETF investment. Second, watch for divergence in gold and silver prices. Since the fund holds both metals, its performance will depend on the performance of both. Finally, remember that short-term performance numbers in commodity funds can be volatile. Long-term goals are generally better served by understanding the underlying asset class risks rather than chasing short-term return rankings.