Silver ETFs snap four-month outflow streak with Rs 4,286 crore inflows in June
Gold ETFs also remained in favour during June, receiving Rs 3,443 crore of net inflows after investor interest returned following a correction in bullion prices.
Overall, passive mutual funds attracted Rs 16,724 crore in net inflows during June. Other ETFs accounted for the bulk of passive inflows, receiving Rs 13,238 crore, while index funds recorded a marginal net outflow of Rs 59 crore during the month.
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Silver exchange-traded funds (ETFs) recorded their highest-ever monthly inflows in June, attracting net investments of Rs 4,286 crore and ending a four-month streak of outflows, according to data released by the Association of Mutual Funds in India (AMFI).
The category had witnessed net outflows between February and May, with May marking the fourth consecutive month of redemptions. The sharp turnaround suggests investors returned to silver ETFs following a correction in silver prices, even as geopolitical tensions and macroeconomic uncertainty continued to support demand for precious metals.
Despite the record inflows, assets under management (AUM) of silver ETFs declined to Rs 78,943 crore at the end of June from Rs 86,217 crore in May due to mark-to-market losses as silver prices fell during the month.
Retail participation remained strong, with silver ETF folios rising to 53.93 lakh in June.
Gold ETFs also attract inflows
Gold ETFs also continued to witness investor interest, receiving net inflows of Rs 3,443 crore in June as investors used the correction in bullion prices to increase allocations.
However, similar to silver ETFs, gold ETF assets under management declined to Rs 1.70 lakh crore from Rs 1.84 lakh crore in May, reflecting valuation losses.
AMFI Chief Executive V N Chalasani said investors viewed the correction in gold prices as a buying opportunity.
“People may have seen the correction in gold prices as an attractive entry point and therefore invested,” he said.
Safe-haven demand remains intact
The strong inflows into precious metal ETFs come amid persistent geopolitical uncertainty, volatile global financial markets and expectations of lower global interest rates, all of which have supported demand for safe-haven assets.
At the same time, AMFI noted that India’s macroeconomic outlook has improved over the past month, aided by lower crude oil prices, easing domestic bond yields and expectations that India will remain the world’s fastest-growing major economy.
However, the association cautioned that geopolitical developments, a stronger US dollar and weather-related uncertainties continue to pose risks.
Passive funds attract Rs 16,724 crore
Overall, passive mutual funds received net inflows of Rs 16,724 crore in June. Other ETFs accounted for the bulk of the inflows at Rs 13,238 crore, while index funds recorded a marginal net outflow of Rs 59 crore.
The mutual fund industry’s total assets under management rose 0.79 percent month-on-month to Rs 82.22 lakh crore. Equity mutual funds extended their inflow streak to 64 consecutive months, attracting net investments of Rs 28,973 crore during the month.