Domestic gold exchange-traded funds (ETFs) saw their holdings jump 65 per cent to 95 tonnes in 2025, elevating Indian ETFs to sixth place globally, going by holdings of the yellow metal. At the end of 2024, they ranked eighth with 57.5 tonnes of holding, according to an analysis of data from the World Gold Council (WGC).
The recent correction suggests that while precious metals hedge geopolitical tension and inflation, they are not immune to sharp short-term corrections and profit-booking.
'New investors should enter gradually and stay cautious.' 'Silver is a structural multi-year story, but timing matters in a high-volatility metal.'
Major fund houses report a sharp rise in online transactions, driven by changing investor habits, distributor behaviour, and fast-growing fintech platforms.
New investors should not allow themselves to fall prey to FOMO and rush headlong into gold.
Despite recent underperformance, MNC funds have delivered over longer time frames.
'Increasingly, they treat gold as a financial asset in their portfolio rather than just as jewellery.'
'Investors' decisions should reflect their financial goals, risk tolerance, and the amount of gold already present in their portfolio.'
Invest in these funds through the SIP route with at least a seven-year horizon.
If you already hold significant amounts of equity in your portfolio, avoid MAAFs with over 60 per cent equity. But if you lack equity exposure, an aggressive MAAF may be appropriate.
Inflows into gold exchange-traded funds (ETFs), which manage a total of Rs 37,390 crore, have surged sharply in recent months. This trend is likely to continue, especially after the reintroduction of long-term capital gains tax (LTCG), which is likely to attract smart money into mutual fund offerings amid a robust outlook for the yellow metal. Smart money, also known as opportunistic flows, refers to strategic investments that are generally of a short-term horizon.
Invest with a 5 to 7 year horizon so that you are able to ride out price volatility and benefit from the long-term trends of demand and macroeconomic shifts.
New investors should gradually build a 5 to 10 per cent allocation to gold.
MMFs invest in fixed-income instruments maturing in less than one year, minimising interest-rate risk.
Investors must adopt a balanced approach, incorporating both styles in their portfolios.
Tactical investors should have an investment horizon of around six months to one year, long-term investors should stick around for 10 years or more.
'It makes sense to have gold in one's portfolio keeping the political and economic risks of 2024 in mind.'
'Auto, pharma, and industrials have delivered well in the recent quarter, while businesses like quick-service restaurants, consumer staples, and durables have underperformed in volume growth.'
Mutual funds have launched a clutch of new fund offers in the silver ETF (exchange traded fund) category this year and collected Rs 1,400 crore in assets after the introduction of the newly-created investment asset class by market regulator Sebi in 2021. Further, fund houses including Kotak Asset Management Company have filed draft documents with the markets regulator to float silver ETF as well as silver ETF fund of funds for investors, information with the Securities and Exchange Board of India (Sebi) showed. These NFOs (new fund offers) are providing an opportunity to the investors to digitally invest and own silver which is easily tradable during market hours.
Investors may take a 5 to 10 per cent exposure to silver. 'Have a long-term investment horizon when investing in silver ETFs to ride out short-term market fluctuations.'
'Investors should ideally consider equity allocations from a medium-to-long term perspective.'
In contrast with their strong performance in 2020 and 2021, pharmaceutical and healthcare funds experienced a decline in 2022, with returns plummeting by an average 9.8 per cent. This trend has continued in the current year, with year-to-date return remaining in the negative (-4.9 per cent). In the past three months, pharma funds have been hit hard, experiencing a 7.9 per cent decline.
The rally in silver may continue if the global economic recovery remains on course.
Increasing awareness about mutual funds, ease of transactions through digitisation and sharp surge in equity markets have aided asset management companies to add a staggering 3.17 crore investor accounts in 2021-22, with experts saying the trend is likely to continue this fiscal as well. This was a significant rise from 2020-21 when 81 lakh accounts (or folios in mutual fund parlance) were opened, data with the Association of Mutual Funds in India (Amfi) showed. The ongoing financial year too appears to be promising in terms of folios as increase in investor accounts will enable people to move beyond fixed deposits and savings accounts, said Priti Rathi Gupta, founder of LXME, a financial platform for women.
Treat silver as part of the procyclical or growth assets in your portfolio, advises Sanjay Kumar Singh.
Invest only if you wish to go overweight on the sector.
'Continue with your SIPs to get the benefit of lower average prices in this challenging market environment.'
'Given the worries about sluggish growth, rising interest rates and likely volatility, it's quite logical to infer that the SIP route could be the preferred way of investing.'
Enter multi-cap funds only if you can stay invested for the long term.
Many investors want to exit equities now and re-enter when they begin to rise. Such timing is difficult to pull off.
'Investors need to expect steady returns over the next one to two years with bouts of high volatility.'
'We have relatively strong growth and a healthy corporate earnings cycle as positives, but a worrisome current account deficit and high inflation as challenges.'
Despite the Sensex's 74 per cent run-up over the past year, the Indian equity market could still reward investors if the expected revival in earnings materialises, according to market experts. Returns during the coming year are more likely to be in line with longer-term trends (the Sensex's five-year return is around 14 per cent). Several factors are expected to aid the market's performance this year.
While mid-cap and small-cap funds have given category average returns of 73.3 per cent and 89.8 per cent respectively over the past year, large-cap funds' returns have been lower at 53.9 per cent, points out Sarbajeet K Sen.
'For equities, inflation trending upwards but within the range of expectations can actually be a big positive as it helps earnings and may shift flows from bonds to equities.'
'Any normalisation exercise will bring its share of volatility.'
Wondering if mutual fund investments can earn you enough money for your retirement and child's marriage? Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, answers your queries.
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