ET Intelligence Group: Net inflows into gold exchange-traded funds (ETFs) surged to a record ₹68,867 crore in FY26, lifting their share of overall mutual fund industry inflows to nearly 10%, sharply above the historical range of 1-3%. Amid heightened market volatility driven by geopolitical risks, net inflows jumped 364% year-on-year, or more than four-and-a-half times, marking the fastest growth across all mutual fund categories, including equity, debt and hybrid, according to Association of Mutual Funds in India (AMFI) data. The FY26 inflows far exceeded the earlier annual range of ₹700-15,000 crore, making it an exceptional year for gold ETFs.

In addition, the incremental inflows increased ₹54,015 crore in FY26 over the previous year compared with the earlier annual range of ₹2,500-10,000 crore. Other fund categories showed mixed trends in net inflows in FY26 year-on-year. Debt and equity funds recorded 84% and 17% decline, respectively. Index funds registered a 56% decline in inflows. In contrast, hybrid funds and other ETFs reported 30% and 65% increase in inflows.

The surge in inflows in gold ETFs was aided by gold prices and volatility in the stock market. Gold prices surged about 63% in FY26, rising to nearly ₹1.5 lakh by March 31, 2026, driven by global safe-haven demand amid geopolitical tensions. Equities disappointed investors with the BSE Sensex declining about 5% in FY26. Volatility intensified toward the end of the year as the Sensex fell nearly 15% in the fourth quarter. This prompted investors to divert funds to gold ETFs, which recorded net inflows of 31,561 crore in the March quarter, the highest quarterly inflow of the year.

According to Vikram Dhawan, commodities head and fund manager, Nippon India Mutual Fund, investment demand and jewellery demand in gold have long moved in opposite directions during price spikes.