Gold ETF inflows jump 106% in January; overtake equity mutual funds

File photo Gold exchange-traded funds (ETFs) recorded a sharp surge in investor inflows in January, overtaking equity mutual funds and signalling a possible shift in portfolio preferences amid market volatility. According to industry data, gold ETF inflows jumped 106 % month-on-month to a record Rs 24,040 crore in January, slightly higher than equity mutual fund inflows of Rs 24,029 crore. The spike, more than double December levels, marks a rare moment when investor interest in gold rivalled equities in absolute inflow terms. The rush towards gold also lifted other diversified investment categories. Multi-asset allocation funds saw inflows rise 41 per cent month-on-month to Rs 10,485.38 crore, reflecting a growing preference for diversification and exposure to precious metals. The trend underscores the increasing financialisation of gold as an investment asset in India. Commenting on the shift, A Balasubramanian, Managing Director and CEO of Aditya Birla Sun Life AMC, said that the recent rally in gold and silver has driven strong demand for precious metal-linked products. “The rise in gold and silver has led to a sharp increase in demand for gold and silver ETFs as investors look for alternative avenues to gain exposure to precious metals. However, equities continue to remain the preferred asset class for investment from a long-term wealth creation point of view,” he said. Market analysts say that part of the surge reflects routine portfolio rebalancing at the start of the year. Nehal Meshram of Morningstar said that investors appear to be adding gold as a hedge after a volatile period across risk assets, according to ET. Gold has emerged as the best-performing asset class so far in 2026, with gold ETFs delivering returns of about 16 per cent year-to-date. Over the past year, returns have exceeded 76 per cent, strengthening gold’s status as a preferred safe-haven asset. In contrast, overall equity mutual fund inflows declined 14 per cent to Rs 24,028.59 crore in January from Rs 28,054 crore in December, according to data from the Association of Mutual Funds in India (AMFI). Himanshu Srivastava, Principal Research at Morningstar Investment Research India, said that the slowdown reflected moderation rather than weakening sentiment. “Equity-oriented mutual fund categories recorded net inflows of Rs 24,029 crore in January 2026, lower than December, indicating a slower pace but continued investor confidence supported by steady SIP contributions,” he said. The moderation was most visible in mid- and small-cap funds. While these segments continued to attract inflows of Rs 3,185 crore and Rs 2,942 crore respectively, the pace slowed sharply due to elevated valuations and recent market corrections. Srivastava also said that some profit-booking after strong past performance also weighed on fresh allocations. End of Article