Inflows into gold exchange-traded funds (ETFs) surged 282 per cent in September to ₹8,363.13 crore from ₹2,189.51 crore in August as investors rushed to add the yellow metal to their financial portfolio amid a bull run in its price.
Data released by mutual fund industry body AMFI on Friday showed assets under management (AUM) in gold ETFs reached a high of ₹90,135.98 crore in September, up from ₹72,495.60 crore in August. Gold prices breached the $4,000 per ounce mark on October 7 at Comex, clocking over a 51 per cent jump from $2,641 per ounce on January 1.
“AUM in gold ETFs have more than doubled and this momentum is largely driven by gold’s sharp rally, fuelled by rising geopolitical tensions, sustained central bank purchases and a weakening US dollar. Gold continues to reinforce its role as a resilient and strategic asset in diversified portfolios,” said Hemen Bhatia, ED and CEO, Angel One AMC.
“This momentum is mirrored in multi-asset allocation funds, which saw nearly ₹5,000 crore inflows, largely driven by gold and silver allocations,” said Kartik Jain, MD and CEO, Shriram AMC.
Silver inflows shine
Inflows into silver ETFs spiked by over 200 per cent in September at ₹5,341.67 crore compared with ₹1,759 crore in August. AUM in silver ETFs stood at ₹36,460.94 crore in September amid rising domestic prices.
AMFI chief Venkat Chalasani clarified that the surge in prices and premiums is not a structural issue, but rather a short-term imbalance driven by global supply constraints. “The spot price is higher than the futures,” he explained, pointing to a market condition where immediate demand exceeds available supply.
Kotak Mutual Fund temporarily suspended lump sum subscription in its silver ETF fund-of-funds amid domestic silver trading at a significant premium to global prices
“The September data underscores the increasing role of precious metals in long-term wealth diversification. For investors, it’s a reminder that balancing traditional equity and debt hybrid strategies along with strategic asset allocation to metals can strengthen portfolios against economic uncertainties, while tapping into avenues for long-term growth,” Jain said.
Equity inflows slide
On the equity side, net inflows fell 9 per cent to ₹30,421.69 crore in September from ₹33,430.37 crore in August, reflecting cautious investor sentiment in the secondary market, despite the primary market remaining robust with a large number of IPOs.
“The slowdown witnessed in sectoral/thematic fund collections was the prime reason for the moderation of flows,” said Viraj Gandhi, CEO, Samco Mutual Fund.
Debt funds saw outflow of ₹1 lakh crore in September, with investors pulling away from liquid and short-duration funds,” said Anand Vardarajan, CBO, Tata AMC.
SIPs reached a new milestone with record monthly contribution of ₹29,361 crore and 9.25 crore active accounts.