Gold ETF inflows eclipse equity funds as investors chase bullion boom in record-breaking rally

In a dramatic reversal in investor behaviour, gold ETF inflows surged to a record Rs 24,040 crore in January, marginally surpassing equity mutual fund inflows of Rs 24,029 crore and raising questions over whether fear of missing out (FOMO) on the precious-metal rally is disrupting traditional asset-allocation strategies.

The 106% month-on-month (MoM) jump in gold ETF inflows, more than doubling from December levels, marks a watershed moment for India’s mutual fund industry, as investors appear to be turning overweight on bullion.

The gold rush has also rippled across the broader mutual fund landscape. Multi-asset allocation funds saw inflows surge 41% month on month to Rs 10,485.38 crore as investors sought diversification. The trend highlights growing interest in precious metals and points to the increasing financialisation of gold as an investment asset.


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A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC said 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 said.

Morningstar’s Nehal Meshram said part of the surge in gold ETF inflows likely reflects fresh allocations at the start of the year, as investors rebalance portfolios and add hedges following a volatile phase across risk assets. Gold ETFs continue to benefit from their positioning as a regulated, liquid and cost-efficient way to gain exposure to gold compared with physical formats, making them an easy “add-on” allocation during uncertain macro phases, the analyst said.

“The persistence of strong flows also indicates that gold’s role is becoming more structural in Indian portfolios. With investors still mindful of inflation risks, currency volatility and global geopolitical uncertainty, allocations to gold-linked products have remained steady, and January’s spike reinforces the category’s growing appeal as a portfolio stabiliser,” Meshram added.

Gold has been the best-performing asset class so far in 2026, with ETFs linked to the yellow metal delivering returns of around 16%. Over the past one year, gold ETFs are up more than 76%, reflecting continued investor preference for safe-haven and diversification exposure.

Meanwhile, total equity mutual fund inflows fell 14% to Rs 24,028.59 crore in January from Rs 28,054 crore in December, according to AMFI data.

“Equity-oriented mutual fund categories recorded net inflows of Rs 24,029 crore in January 2026, lower than Rs 28,054 crore in December, indicating a moderation in pace rather than any meaningful deterioration in investor sentiment,” said Himanshu Srivastava, Principal Research at Morningstar Investment Research India. “Flows remained constructive despite bouts of market volatility, supported by steady SIP contributions and continued confidence in the long-term structural growth prospects of Indian equities.”

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The moderation was most pronounced in the mid- and small-cap segments, which continued to attract “healthy absolute inflows” of Rs 3,185 crore and Rs 2,942 crore, respectively, but at a significantly slower pace compared with the previous month.

“The pace slowed sharply, reflecting elevated valuations and recent market corrections that prompted investors to adopt a more cautious and selective approach,” Srivastava noted. “Some amount of profit-booking after the strong performance of recent years also weighed on incremental allocations.”

The near-equal split between gold and equity inflows raises a critical question for wealth managers and financial planners: Is this a temporary flight to safety amid market volatility, or a more fundamental shift in how Indian investors approach portfolio construction, and is disciplined asset allocation becoming a casualty of gold’s relentless rally?