Gold & Silver ETFs Emerge as Core Investment Assets

Gold and Silver ETFs are no longer just tactical portfolio hedges — they are steadily becoming core allocation vehicles in Indian investor portfolios.

The latest AUM data highlights a clear structural shift. Combined precious metal ETF assets have expanded from under 1% of total mutual fund AUM in January 2025 to 3.72% by January 2026 — a near fourfold rise in allocation share within a year.

Record Inflows Signal Structural Shift

January 2026 marked a watershed moment:

• Gold ETF inflows: ₹24,040 crore
• Growth & equity-oriented scheme inflows: ₹24,028 crore
• Silver ETF inflows: ₹9,463 crore
• Total Silver ETF AUM: ₹1.16 lakh crore

Gold ETF inflows nearly matched equity-oriented scheme inflows — a strong signal that investors are actively diversifying rather than purely chasing risk assets.

The steady month-on-month rise in combined ETF AUM underscores sustained demand rather than a one-off spike.

Retail Participation Broadens

Retail participation has expanded sharply, indicating that precious metals are increasingly viewed as long-term portfolio stabilisers instead of short-term hedging tools.

Key structural drivers behind this trend include:

• Heightened global macro uncertainty
• Currency volatility
• Portfolio diversification strategies
• Easy ETF access and liquidity
• Growing awareness of asset allocation discipline

Silver’s sharp AUM rise also signals a widening investment thesis beyond gold, with investors positioning for both monetary stability and industrial demand-linked themes.

Precious Metals as Strategic Allocations

The rise from sub-1% allocation to 3.72% of total MF AUM within a year reflects a deeper behavioural change in Indian investing patterns. Investors are consciously allocating to stability alongside growth.

This shift suggests:

• Greater portfolio sophistication
• Reduced concentration risk in equities
• Stronger acceptance of gold and silver as permanent asset classes

The Bigger Picture

The data points toward a structural portfolio realignment rather than a temporary defensive reaction. Precious metals are increasingly being treated as strategic core holdings within diversified portfolios.

The message from flows is clear:
Investors are not exiting equities, they are balancing risk.