Gold ETFs shine as equities slowdown

The sharp rise in gold and silver prices has led investors to flock to exchange-traded funds (ETFs) based on them. Inflows into gold ETFs more than doubled from December, touching an all-time high of Rs 24,040 crore in January – higher than equities at Rs 24,029 crore for the first time, according to data from the Association of Mutual Funds in India (Amfi). However, flows into equities fell for the second consecutive month. Silver ETF inflows also saw a sharp month-on-month rise of 139% in January to Rs 9,463 crore – its highest ever. In all, these two ETFs collected as much as Rs 33,503 crore. In January, gold prices rose 24% and silver jumped by a whopping 45% while the Nifty and Sensex fell around 3%. In February, gold and silver prices have corrected by 5% and 22%, respectively. What did A Balasubramanian say? A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC said that the recent rise in gold and silver has led to a sharp increase in demand for gold & silver ETFs as investors look for different 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 added. What did Venkat Chalasani say? Venkat Chalasani, chief executive, AMFI, attributed the rise in gold prices to the risk-off sentiment globally due to which people move towards gold and dollar and since there was dollar uncertainty and because of the heightened US borrowings people moved away from the US dollar. “Following the news of hawkish Fed chief volatility came in gold and silver price, so, we are having a cautious approach,” he added. In the equity category, inflows into large cap and thematic schemes rose by 27.9% and 10.2% respectively to Rs 2,005 crore and Rs 1,043 crore but that into small caps, midcaps, and flexicap fell around 23% each. Himanshu Srivastava, Principal Research, Morningstar Investment Research India, noted that the moderation in overall inflows was largely driven by cooling momentum in the mid- and small-cap segments and some amount of profit booking after the strong performance seen over the past years also weighed on incremental allocations. The increase in large cap schemes suggests a gradual tilt toward quality, earnings visibility, and relatively stable portfolios amid an uncertain global backdrop, according to him. Debt schemes saw inflows of Rs 74,827 crore in January after Rs 1.32 lakh crore outflow in December. The Systematic Investment Plan (SIP) contribution for January 2026 stood at Rs 31,002.33 croreswith 99.2 million contributing accounts. SIP assets stood at Rs 16.36 lakh crore in January 2026, accounting for 20.2% of total mutual fund assets. Overall, the industry’s net assets under management increased to Rs 81.01 lakh crore from Rs 80.23 lakh crore in December. Chalasani added: “January’s data reflects a broadly steady trend in India’s mutual fund industry despite ongoing global uncertainties and short-term market volatility. Industry AUM crossed ₹81 lakh crore, continuing the gradual expansion seen over recent years” Vaiibhavv Chugh, CEO, Abakkus Mutual Fund noted that flows in the equity MFs have dropped a bit as expected due to the market volatility specially around tariff issues which took time to get resolved. Chugh added that the time correction which we have seen, valuation froth from markets has slowly been coming down specifically on large caps thus attracting more flows. “Though at index levels, small caps may appear a bit expensive however at stock levels, opportunities are emerging and we believe investors should now look at small caps as well,” he added.