The 3 Best Gold and Silver Funds of 2025: A Year of Precious Metal Dominance

The financial landscape of 2025 has been defined by a resurgence in commodities, with precious metals outperforming many traditional equity indices. While gold continued its historical role as a safe haven during global geopolitical instability, silver emerged as the high-growth asset of the year, driven by unprecedented industrial demand from the electric vehicle and solar energy sectors. For Indian investors, this dual rally provided a unique opportunity to hedge portfolios while capturing significant upside.

Navigating the mutual fund landscape can be challenging, but three specific funds stood out in 2025 for their consistency, liquidity, and ability to track underlying asset prices accurately. These winners span three distinct categories: pure silver exposure, a balanced hybrid approach, and a dedicated gold anchor.

The Aggressive Growth Choice: Nippon India Silver ETF

The Nippon India Silver ETF solidified its position in 2025 as the premier vehicle for investors seeking direct exposure to silver prices. As the largest silver Exchange Traded Fund (ETF) in India by asset size, it offered superior liquidity compared to its peers, a critical factor that allowed investors to enter and exit positions with minimal impact costs even during periods of high market volatility. The fund’s tracking error remained consistently low throughout the year, ensuring that the returns investors saw in their portfolios mirrored the actual rally in domestic silver prices.

This fund is best suited for aggressive investors who are comfortable with volatility. In 2025, silver behaved more like an industrial equity than a stable commodity, swinging sharply but trending upward. The Nippon India Silver ETF captured this "industrial supercycle" effectively. It is an ideal tactical play for those who believe the demand for silver in green technologies will continue to outpace supply, but it requires a stomach for price fluctuations that are typically double that of gold.

The Balanced Performer: Edelweiss Gold and Silver ETF Fund of Funds

For investors who found the choice between gold and silver difficult, the Edelweiss Gold and Silver ETF Fund of Funds (FoF) emerged as the most efficient solution of 2025. Unlike pure commodity funds, this hybrid scheme maintains a dynamic allocation between the two metals. Throughout the year, the fund manager successfully rebalanced the portfolio to capitalise on silver's growth spurts while increasing gold allocation during calmer periods to protect gains. This strategy delivered a smoother return trajectory than pure silver funds, making it a standout in the hybrid category.

The primary advantage of this fund lies in its structure and tax efficiency. Investors attempting to replicate this strategy personally would incur capital gains taxes and exit loads every time they switched between gold and silver. The Edelweiss FoF manages this internally, offering a tax-efficient "all-weather" commodity portfolio. It is particularly well-suited for moderate investors who want to participate in the precious metals boom but prefer a "fill it and shut it" approach rather than actively timing the market cycles of two different metals.

The Defensive Anchor: SBI Gold Fund

While silver grabbed the headlines with its rapid ascent, the SBI Gold Fund remained the top choice for conservative investors prioritising capital preservation. Backed by the institutional trust of SBI Mutual Fund, this Fund of Funds invests in the SBI Gold ETF and is renowned for its stability. In 2025, as equity markets faced intermittent corrections, the SBI Gold Fund acted as a perfect portfolio stabiliser, delivering steady, inflation-beating returns with significantly lower volatility than its silver counterparts.

This fund is recommended for long-term investors building an emergency corpus or a hedge against inflation. Unlike digital gold or jewelry, the SBI Gold Fund offers high liquidity and transparent pricing without the concerns of making charges or purity verification. Its performance in 2025 reinforced the age-old investment wisdom that while silver creates wealth, gold preserves it. For investors looking to diversify their equity-heavy portfolios, this fund remains the gold standard for safety and reliability.

Investor Takeaway for 2025

The data from 2025 offers a clear lesson in asset allocation. Investors who chased the highest absolute returns found them in the Nippon India Silver ETF, driven by industrial fundamentals. Those seeking a balanced, hands-off experience thrived with the Edelweiss Hybrid structure, while conservative savers found their safety net in the SBI Gold Fund. Understanding your own risk appetite is key; in a year where both metals shone, the "best" fund was simply the one that aligned most closely with the investor's financial goals.

  Disclaimer: The article is for informational purposes only and not investment advice.