Whalesbook
Record Inflows Fuel Gold ETF Boom
The surge in gold ETF investments was driven by a confluence of factors, primarily the underperformance of equity markets throughout 2025 and persistent upward momentum in gold prices. Net inflows for Indian Gold ETFs reached an unprecedented Rs 43,000 crore (US$4.9 billion) for the year, with December alone seeing Rs 116 billion (US$1.29 billion) in net additions, according to the Association of Mutual Funds of India and World Gold Council (WGC) data. This marked the eighth consecutive month of net inflows, highlighting sustained investor interest.
Sustained Demand and Portfolio Diversification
Cumulative holdings in gold ETFs expanded by a record 8.6 tonnes in December, bringing the total to a historic 95.2 tonnes. This robust demand reinforces gold's established role as a crucial portfolio diversifier, especially during periods of equity market volatility. Gold ETFs offer investors a convenient and cost-effective way to gain exposure to the yellow metal, avoiding the complexities of physical ownership.
Investor Base and AUM Expansion
The popularity of gold ETFs among Indian investors saw a dramatic increase, with the investor base (folios) expanding by 60% year-over-year. Total folios reached 10.2 million, with 3.8 million new accounts opened in 2025 alone. Assets under management (AUM) for gold ETFs grew substantially to INR1,279 billion (US$14.2 billion), increasing India's share of global gold ETF AUM to 2.5% from 1.9% in the previous year.
Gold's Price Rally and ETF Advantages
Gold's price performance has been a significant draw, with the precious metal surging over 65% in 2025 and showing further strength in early 2026, approaching the $5,000 mark. Global political instability and central bank demand have fueled a 145% price rise over the past three years. Gold ETFs provide a transparent, liquid, and cheaper alternative to physical gold, with expense ratios around 0.8% and no concerns regarding purity, safety, or storage.