{"id":17320,"date":"2025-11-13T15:17:38","date_gmt":"2025-11-13T09:47:38","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=17320"},"modified":"2025-11-13T15:17:38","modified_gmt":"2025-11-13T09:47:38","slug":"gold-and-silver-etfs-drive-surge-in-indias-passive-fund-aum-but-can-the-momentum-last","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/gold-and-silver-etfs-drive-surge-in-indias-passive-fund-aum-but-can-the-momentum-last\/","title":{"rendered":"Gold and Silver ETFs Drive Surge in India\u2019s Passive Fund AUM \u2014 But Can the Momentum Last?"},"content":{"rendered":"

Gold and Silver ETFs Propel India\u2019s Passive Fund AUM to New Highs \u2014 But Can the Rally Sustain?<\/p>\n

India\u2019s passive mutual fund universe continued its remarkable momentum in October, with the segment\u2019s asset under management (AUM) rising 5.2 percent month-on-month to \u20b913.66 lakh crore, according to the latest AMFI data. The surge was led by strong inflows into Gold ETFs, Silver ETFs, equity index funds, and other exchange-traded products \u2014 reinforcing the growing investor preference for low-cost, diversified and commodity-backed instruments.<\/p>\n

The month also witnessed a sharp expansion in passive investor accounts, or folios, which climbed from 4.46 crore in September to 4.82 crore in October, marking an 8 percent month-on-month rise. Much of this jump came from Gold ETFs and Other ETFs, which together added over 20 lakh new investor accounts. Alone, Gold ETF folios surged 11 percent in a single month, crossing the 95 lakh mark for the first time.<\/p>\n

This aggressive rise in passive fund AUM, driven largely by gold and silver allocations, has prompted experts to evaluate whether the sudden acceleration represents a structural shift or a sentiment-led spurt tied to geopolitical uncertainty and multi-year rallies in global precious metals.<\/p>\n

Gold and Silver ETFs Lead the Passive Surge Amid Record Commodity Rallies<\/h2>\n

As per DSP Asset Managers\u2019 latest Passive Product Deck, commodities \u2014 especially Silver ETFs \u2014 are currently the fastest-growing category within the passive investing landscape. Silver ETFs have reported an extraordinary 180% CAGR, while Gold ETFs have grown at 61% CAGR, supported by a global pivot towards safe-haven assets in 2025.<\/p>\n

During the ongoing calendar year, silver prices surged 65% and gold rallied 51%, significantly outperforming India\u2019s benchmark equity indices which rose just 2 percent. This price action translated into massive flows into commodity-backed ETFs.<\/p>\n

As a result, the combined commodity ETF corpus rose to nearly \u20b990,000 crore, with Silver ETFs accounting for roughly \u20b912,000 crore of this total. Gold ETFs have now surpassed the \u20b91 lakh crore AUM threshold, drawing inflows of \u20b97,743 crore in October \u2014 only slightly lower than September’s record \u20b98,363 crore.<\/p>\n

Market analysts say the surge in passive fund AUM underscores investors\u2019 growing inclination toward gold and silver as hedges against inflation, geopolitical risks and global interest rate uncertainty.<\/p>\n

Also Read : Metal Stocks Rise Up to 3% as Hind Zinc, Tata Steel Lead Gains; Vietnam Duty Among Key Drivers<\/a><\/p>\n

AMC Leaders Acknowledge Strong Growth \u2014 But Warn of Speculative Spurt<\/h2>\n

According to Anil Ghelani, Head of Passive Investments at DSP Mutual Fund, passive investing in India remains structurally strong, with consistent additions from new investors and diversification-driven flows from existing ones. However, he also cautions that the sudden spike in commodity ETF inflows may not be fully sustainable.<\/p>\n

\u201cOver the past couple of months, the surge in demand for Gold ETFs and Silver ETFs appears partly speculative. The broad trend over one to two years has been stable and structural, which is healthy \u2014 but recent momentum may cool off,\u201d Ghelani said.<\/p>\n

He also noted that while active equity inflows fell 19 percent month-on-month, investors are not abandoning active funds. SIP flows hit an all-time high of \u20b929,500 crore, and rising allocations into Multi Asset Allocation Funds indicate that some equity flows may be shifting between categories rather than exiting.<\/p>\n

Index Funds and Other ETFs Maintain Core Dominance of Passive Universe<\/h2>\n

Despite the spotlight on commodities, equity-linked instruments remain the backbone of India\u2019s passive mutual fund segment. Other ETFs, including equity, sectoral and thematic ETFs (as well as silver ETFs), hold the largest share of \u20b99.08 lakh crore, up 5 percent from September.<\/p>\n

Index funds, too, saw healthy inflows, with AUM rising to \u20b93.20 lakh crore, driven by a strong 22 percent jump in investor contributions. Low-cost access to benchmark Nifty and Sensex indices continues to fuel interest in index investing.<\/p>\n

Investors have shown a clear preference for passives as a core portfolio allocation, particularly as global macro volatility raises questions about active fund outperformance.<\/p>\n

Retail Participation Expands at Record Pace<\/h2>\n

October marked one of the strongest months for retail participation in passive products. The addition of 36 lakh new folios \u2014 most of them in commodity and equity ETFs \u2014 underlines the increasing comfort among small investors with digital investing and index-based strategies.<\/p>\n

Passive accounts now form over one-fifth of India\u2019s total mutual fund folios, signalling a decisive behavioural shift as investors embrace simplicity and transparency over high-cost active bets.<\/p>\n

Performance Drives Sentiment: Silver and Gold ETFs Top Charts<\/h2>\n

Performance trends also help explain the flow dynamics. Over the past year:<\/p>\n