Gold ETFs shine amid rising geopolitical tensions and strong gold price rally: ICRA Analytics
Gold ETFs have seen a sharp rise in investor preference amid geopolitical tensions and a strong rally in gold prices, ICRA Analytics said. AUM surged nearly 65% CAGR over five years to Rs 1.71 lakh crore, while inflows jumped to ₹2,266 crore in Ma...
By Surbhi Khanna, ET Online | Updated:
ETMarkets.com
Gold ETFs (Exchange Traded Funds) have witnessed a clear rise in preference among investors, both retail and institutional, amid heightened geopolitical volatility and sharp appreciation in gold prices, according to a release by ICRA Analytics.
Total assets under management (AUM) of Gold ETFs registered a five-year CAGR of 64.76% at Rs 1,71,468.4 crore in March 2026, as against Rs 14,122.72 crore in March 2021. On a year-on-year basis, net AUM has almost doubled, increasing by nearly 191.18% as compared to Rs 58,887.99 crore in March 2025.
Also Read | Investors pour over Rs 10,000 crore into flexi-cap funds in March. Opportunity or overcrowding concern?
The net inflows into Gold ETFs stood at Rs 2,265.68 crore in March 2026, as against net outflows of Rs 77.21 crore in the same period last year. Inflows into Gold ETFs stood at Rs 662.45 crore in March 2021. On a month-on-month basis, inflows dropped by 56.88% from Rs 5,254.95 crore in February 2026.
“Gold ETFs have seen a clear rise in preference during the recent phase of heightened geopolitical volatility and sharp gold price appreciation, as investors, both retail and institutional, have actively used them as a defensive and tactical allocation within portfolios. This preference has been driven by the dual impact of global uncertainty and strong returns from gold, which reinforced its traditional role as a safe haven asset,” said Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics.
There are as many as 26 Gold ETF schemes in the market at present, out of which six were launched in 2025-26. A quick analysis of the returns generated by the Gold ETFs suggests that the average 1-year returns across most of these funds range from around 58.81% to 62.85%, while the 5-year CAGR returns across most of these funds range from around 25.78% to 26.11%.
Source: AMFI; MFI360Explorer
Talking about the growing investor preference for Gold ETFs, Kumar said, “Gold ETFs are better suited for investment, portfolio diversification and tactical asset allocation, while physical gold is more appropriate for consumption and long-term holding driven by cultural preference.”
Also Read | Gold, silver ETFs rally up to 9% as US-Iran peace hopes and falling oil lift sentiment. What should investors do?
He further said, “For most financial investors, Gold ETFs offer a cleaner, more efficient and transparent way to gain exposure to gold prices, whereas physical gold serves non-investment objectives better.”
Top 10 Best-performing funds:
Source: MFI360Explorer, As of March 31, 2026
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and twitter handle
Total assets under management (AUM) of Gold ETFs registered a five-year CAGR of 64.76% at Rs 1,71,468.4 crore in March 2026, as against Rs 14,122.72 crore in March 2021. On a year-on-year basis, net AUM has almost doubled, increasing by nearly 191.18% as compared to Rs 58,887.99 crore in March 2025.
Also Read | Investors pour over Rs 10,000 crore into flexi-cap funds in March. Opportunity or overcrowding concern?
The net inflows into Gold ETFs stood at Rs 2,265.68 crore in March 2026, as against net outflows of Rs 77.21 crore in the same period last year. Inflows into Gold ETFs stood at Rs 662.45 crore in March 2021. On a month-on-month basis, inflows dropped by 56.88% from Rs 5,254.95 crore in February 2026.
“Gold ETFs have seen a clear rise in preference during the recent phase of heightened geopolitical volatility and sharp gold price appreciation, as investors, both retail and institutional, have actively used them as a defensive and tactical allocation within portfolios. This preference has been driven by the dual impact of global uncertainty and strong returns from gold, which reinforced its traditional role as a safe haven asset,” said Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics.
There are as many as 26 Gold ETF schemes in the market at present, out of which six were launched in 2025-26. A quick analysis of the returns generated by the Gold ETFs suggests that the average 1-year returns across most of these funds range from around 58.81% to 62.85%, while the 5-year CAGR returns across most of these funds range from around 25.78% to 26.11%.
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“Even during periods of short-term correction, Gold ETFs retained investor relevance. Although inflows moderated sharply in Feb and Mar 2026, due to gold price correction, and temporary easing of global risk aversion, flows remained positive, indicating that investor interest had not structurally reversed,” Kumar said.Source: AMFI; MFI360Explorer
Talking about the growing investor preference for Gold ETFs, Kumar said, “Gold ETFs are better suited for investment, portfolio diversification and tactical asset allocation, while physical gold is more appropriate for consumption and long-term holding driven by cultural preference.”
Also Read | Gold, silver ETFs rally up to 9% as US-Iran peace hopes and falling oil lift sentiment. What should investors do?
He further said, “For most financial investors, Gold ETFs offer a cleaner, more efficient and transparent way to gain exposure to gold prices, whereas physical gold serves non-investment objectives better.”
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Top 10 Best-performing funds:
Source: MFI360Explorer, As of March 31, 2026
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and twitter handle
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