Indian investors demonstrated a massive shift towards safety in December 2025, channeling a record-breaking sum into gold exchange-traded funds (ETFs). The allure of the yellow metal as a reliable store of value amid global uncertainty led to an unprecedented monthly surge in investments.
Record-Breaking Numbers for Gold ETFs
According to the latest data released by the Association of Mutual Funds in India (AMFI), inflows into gold ETFs skyrocketed to Rs 11,647 crore in December 2025. This staggering figure represents a monumental month-on-month jump of 211 per cent from the Rs 3,741.79 crore recorded in November.
The direct consequence of this flood of money was a significant expansion in the category's size. The net assets under management (AUM) for gold ETFs swelled by nearly 16 per cent on a month-on-month basis, reaching approximately Rs 1.28 lakh crore by the end of the reporting month.
Why Investors Are Flocking to Gold ETFs
This remarkable trend is driven by multiple factors. Primarily, investors are seeking a regulated, liquid, and cost-efficient alternative to physical gold, especially during phases of heightened volatility in traditional markets like equities and bonds. The consistent allocation to these funds, even during intermittent market corrections, highlights their evolving role as a strategic tool for portfolio diversification and hedging.
Himanshu Srivastava, Principal Research Analyst at Morningstar Investment Research India, provided key insights. "The sharp rise in domestic gold prices over recent months has further reinforced investor confidence in gold-linked products, prompting fresh allocations into ETFs," he stated. Srivastava added that these inflows point to structural growth in the category, fueled by increasing folio counts and AUM as more Indians use gold to hedge against inflation, currency risks, and global macroeconomic threats.
He also credited the growing adoption of digital investment platforms and the transparency of ETF structures for making gold more accessible and boosting the category's expansion.
A Contrasting Picture for Other Fund Categories
The flight to safety was starkly evident when comparing flows into other mutual fund segments. While gold shone brightly, inflows into equity-oriented schemes declined by 6.2 per cent month-on-month to Rs 28,054.06 crore in December 2025.
The slowdown was visible across market capitalizations:
- Small-cap fund inflows fell 13% to Rs 3,823.82 crore.
- Mid-cap and large-cap fund inflows dropped 7% and 4.4%, respectively.
However, flexi-cap funds remained resilient, attracting strong inflows of close to Rs 10,000 crore. Ankur Punj, Managing Director and Business Head at Equirus Wealth, noted, "We are also seeing investors turn selective rather than exit the market completely... The standout trend in December was the sharp surge in defensive allocations."
The debt segment faced substantial outflows of Rs 1.32 lakh crore, with liquid funds and money market funds seeing the largest redemptions. Inflows into hybrid funds also softened to Rs 10,755.57 crore from Rs 13,299.2 crore in November.
In a positive sign for long-term equity investing, contributions through Systematic Investment Plans (SIPs) hit a new peak of Rs 31,001.67 crore in December 2025, with the number of active SIP accounts reaching 9.79 crore.
The data for December 2025 paints a clear picture of a cautious investment landscape. With global headwinds prompting uncertainty, Indian investors are decisively bolstering their portfolios with gold, leveraging the modern, accessible route of ETFs to secure their financial future.
