Gold and Silver ETF Inflows Surpass Equity Funds for First Time Ever
In a historic shift for India's investment landscape, net inflows into gold and silver exchange traded funds (ETFs) outpaced those into equity funds for the first time ever last month. This unprecedented trend was fueled by a dramatic rally in precious metals prices, coupled with volatility in the equity markets.
Record Inflows Driven by Precious Metals Rally
According to data released by the Association of Mutual Funds in India (AMFI), gold and silver ETFs together attracted net inflows of approximately Rs 33,000 crore in January. In stark contrast, equity schemes recorded net inflows of Rs 24,029 crore during the same period. Fund managers attribute this phenomenon to 'performance chasing behaviour' among investors, who were drawn to the soaring returns of precious metals.
The rally in gold and silver was nothing short of spectacular. On the New York Commodity Exchange, gold prices surged by 23% or nearly $1,000 per ounce between December 31, 2025 and January 29, reaching an all-time high of $5,586. However, the month ended with a dramatic 12% fall in just one session. Silver's performance was even more remarkable, rallying over 60% from $70 per ounce to $121 before settling at $84 by month-end.
Domestic Market Impact and Investor Sentiment
In the domestic market, compounded by a weak rupee, gold prices soared to around Rs 2 lakh per 10 grams, while silver hit Rs 4 lakh per kilogram—both setting new record highs. This rally occurred at a time when equity markets were exhibiting volatility with a downward bias, prompting investors to flock to gold and silver ETFs as safer havens.
"Performance chasing behaviour was clearly visible in AMFI data," said Viraj Gandhi, CEO of Samco Mutual Fund. "Compared to their average collections over the preceding 12 months, gold and silver ETFs saw record inflows, and multi-asset schemes also experienced this trend."
Breakdown of ETF Inflows and Industry AUM
Of the total Rs 33,000 crore net inflows into precious metals ETFs, Rs 24,040 crore was channeled into gold-focused schemes, with the remaining approximately Rs 9,000 crore flowing into silver ETFs, as per industry players. The mutual fund industry's total assets under management (AUM) crossed a significant milestone, exceeding Rs 81 lakh crore in January.
Data from Nippon Life MF, the largest player in the gold and silver ETF space by AUM, revealed that gold ETFs held total assets worth Rs 1.63 lakh crore, while silver ETFs accounted for Rs 1.13 lakh crore. AMFI's separate reporting showed AUMs of Rs 1.84 lakh crore for gold ETFs and Rs 10 lakh crore for silver ETFs aggregated with similar funds in January.
SIP Contributions Remain Strong
Despite the shift in investor preferences, systematic investment plan (SIP) contributions remained robust. Gross inflows through SIPs in January were Rs 31,002 crore, barely changed from December 2025 but still marking a new all-time high. This indicates sustained investor confidence in long-term equity investments, even as short-term trends favored precious metals.
The convergence of record precious metals prices, equity market volatility, and investor appetite for performance has created a unique scenario in India's financial markets. As gold and silver ETFs break new ground, this development underscores the dynamic nature of investment strategies in response to global economic cues.
