Passive fund inflows moderate in August even as gold ETFs see strong investor demand

Passive funds attracted Rs 10,876 crore in August, down 13 percent from Rs 12,517 crore in July, according to data released by the Association of Mutual Funds in India (AMFI).

Silver ETFs attracted Rs 1,271 crore in August, marginally lower than Rs 1,285 crore in July, a decline of 1.1 percent. Despite the marginal fall in inflows, silver ETF AUM rose 11.5 percent to Rs 85,488 crore from Rs 76,676 crore in July, largely driven by market gains. Gold ETFs saw a sharp increase in investor flows, attracting Rs 2,597 crore in August compared with Rs 1,559 crore in July, an increase of nearly 67 percent. Their AUM rose to Rs 1.91 lakh crore from Rs 1.73 lakh crore in July.

Passive funds comprise exchange-traded funds (ETFs), index funds and fund of funds (FoFs). ETFs accounted for the bulk of inflows in August at Rs 10,161 crore, while index funds saw inflows of Rs 787 crore. FoFs recorded an outflow of Rs 72 crore.

Within ETFs, equity ETFs attracted Rs 7,237 crore in August. The AUM of equity ETFs stood at around Rs 8.18 lakh crore at the end of August. Index-fund inflows moderated sharply in August, with the category receiving Rs 787 crore, compared with Rs 1,537 crore in July, a decline of nearly 49 percent. Within this, equity index funds received Rs 2,394 crore, while debt index funds saw an outflow of Rs 1,610 crore.

FoFs recorded an outflow of Rs 72 crore in August. Their AUM rose to Rs 48,548 crore from Rs 46,352 crore in July. The overall passive-fund AUM stood at Rs 15.41 lakh crore at the end of August, compared with Rs 15.61 lakh crore in July.

On the flows, Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India noted that Gold ETFs witnessed a notable pick-up in investor interest in August 2026. “The acceleration in flows coincided with a strong recovery in gold prices during the month and indicates renewed investor preference for the asset class amid persistent macroeconomic and geopolitical uncertainties. Gold rallied sharply in August, supported by broad-based global ETF buying, a weaker US dollar, and shifting expectations around US monetary policy.” he said adding that the stronger flows also reflect gold’s continued appeal as a portfolio diversifier and a hedge against uncertainty. While geopolitical concerns remained an important underlying support, uncertainty around the US Federal Reserve’s interest-rate trajectory, inflationary pressures, and concerns around global fiscal and debt dynamics added to gold’s safe-haven appeal.