The highlight in January, with no surprise, has been flows into gold and silver ETFs.
Net inflows into gold exchange-traded funds (ETFs) outpaced collections by active equity mutual fund schemes for the first time last month, pointing to a shift in investor preference as volatility in gold and silver prices grabbed headlines.
Gold ETF Inflows Surge
Gold ETFs attracted net inflows of Rs 24,040 crore in January, more than double the Rs 11,647 crore recorded in December 2025.
Silver ETFs saw an even sharper jump, with investors pouring in nearly Rs 9,500 crore, up from Rs 3,962 crore in December, according to data from the Association of Mutual Funds in India (Amfi).
Silver ETF Buying Jumps
The rise in inflows coincided with heightened volatility in precious metals.
Gold prices ended January nearly 17 per cent higher in international markets, while silver gained 39 per cent despite a sharp fall in the final session of the month.
"The surge suggests gold demand remained exceptionally strong, supported by investor preference for safe haven and diversification exposure," said Nehal Meshram, senior analyst at Morningstar Investment Research India.
"Part of this strength likely reflects fresh allocations at the start of the year, as investors rebalance portfolios and add hedges after a volatile phase across risk assets," Meshram explained.
Equity Inflows Hit 7-Month Low
While investors poured record sums into precious metal ETFs, inflows into equity schemes weakened.
At Rs 24,040 crore, net equity inflows in January were the lowest in seven months.
"The highlight in January, with no surprise, has been flows into gold and silver ETFs, said Akhil Chaturvedi, executive director and chief business officer at Motilal Oswal Asset Management Company.
"Investors have diversified incremental flows from equities into precious metals, given the return profile in recent times," added Chaturvedi.
Precious Metals Volatility
The decline in net equity inflows for the second consecutive month was driven mainly by higher outflows.
Investors withdrew Rs 41,639 crore last month, the highest in 18 months.
Safe-Haven Investment Demand
Gross inflows, though moderating, remained steady, supported by systematic investment plan (SIP) contributions.
Equity funds, which account for most SIP inflows, recorded gross inflows of Rs 65,667 crore in January, 5 per cent lower than December.
SIP inflows held at a record Rs 31,002 crore.
Record SIP Inflows
In the hybrid category, multi-asset funds continued to attract strong interest.
These schemes, among the best-performing diversified MF offerings due to exposure to precious metals, drew more than Rs 10,000 crore in inflows during the month.
Multi-Asset Fund Inflows Rise
"Flows into hybrid, multi-asset and passive products -- including higher allocations to gold and silver ETFs -- reflect a measured approach to diversification and portfolio balance.
"Overall, MFs continue to see broad participation across varying market conditions," said Venkat Chalasani, chief executive, Amfi.
Key Points
- Gold ETFs saw record inflows of Rs 24,040 crore in January, overtaking active equity funds.
- Silver ETF investments jumped sharply to nearly Rs 9,500 crore in a single month.
- Equity fund inflows fell to a seven-month low, hit by heavy investor withdrawals.
- Investors shifted towards gold and silver as safe-haven and diversification bets amid volatility.
- SIP inflows stayed strong at a record Rs 31,002 crore, supporting overall MF participation.
Feature Presentation: Ashish Narsale/Rediff
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