【$2.7 Billion Inflow to Gold ETFs】Why Assets Under Management Still Fell by 6%. Reading Gold's “Popularity” and “Price Movement” Separately
In October, $2.7 billion flowed into global gold ETFs. The amount of gold held by funds increased to 4,275 tons, a record high for the end of a month.
However, the dollar-denominated assets under management fell by 6% from the previous month.
If money came in and the amount of gold increased, why did the assets under management decrease? The reason is that the impact of the price decline per unit of gold was greater than the increase in the amount of gold itself.
When considering this news in relation to your own investments, there is one more figure to look at. That is the dollar-yen exchange rate when buying gold ETFs in yen.
What happened with gold ETFs in October
This is the October summary for global gold-backed ETFs and similar products, published by the World Gold Council (WGC) on November 5.
-
Net inflows were $2.7 billion. This marks the fourth consecutive month of net inflows.
-
Gold holdings increased by 19 tons to 4,275 tons. A record high for the end of a month.
-
Assets under management fell by 6% from the previous month to $542 billion. The decline in gold prices outweighed the effect of the capital inflows.
All three are figures for the same month, but they measure different things. Net inflow is the difference between money coming in and money going out. Holdings represent the weight of gold held by the funds. Assets under management represent the valuation of those assets.
For example, if you hold 100 grams of gold at $100 per gram, the valuation is $10,000. Even if your holdings increase to 102 grams the following month, if the gold price drops to $90 per gram, the valuation becomes $9,180. While the amount of gold has increased by 2%, the valuation has decreased by 8.2%.
The same trend occurred with gold ETFs in October. If you read the 6% decrease in assets as investors withdrawing 6% of their capital, you would reach the wrong conclusion.
Conversely, just because there was a net inflow of $2.7 billion does not necessarily mean that gold prices will rise. ETFs are only one part of the gold market. ETF capital flows are used as one piece of information to understand how capital is moving toward gold.
Inflows in Europe and Asia, outflows in North America
When breaking down the global total of $2.7 billion by region, different trends emerge.
-
Europe saw a net inflow of approximately $1.8 billion. Driven by the UK, funds also flowed into listed funds in Germany, Switzerland, and France.
-
Asia saw a net inflow of approximately $1.3 billion. Driven by China, inflows into Japanese gold ETFs also continued.
-
North America saw a net outflow of approximately $500 million. While outflows from US-domiciled funds dragged down the entire region, capital did flow into Canadian funds.
Regions are classifications used in the WGC’s fund summary. These figures do not represent the nationality of individual investors or their reasons for buying and selling.
The WGC suggests that the background for the outflows in North America may include investors selling gold, which is easy to liquidate, to secure cash amid volatility in the stock market. This is an explanation based on capital flows and is not a direct confirmation of the reasons for the sales.
When you see a headline saying ‘funds are returning to gold,’ you can get closer to the reality by looking at which regions’ funds were supporting that movement.
When buying in yen, exchange rates are layered onto the gold price
From here on, this is about holding gold ETFs in Japan. When converting to yen without currency hedging, the relationship is roughly as follows:
Yen-converted gold price = Dollar-denominated gold price × Dollar-Yen rate
For example, suppose the dollar-denominated gold price falls by 6%. The 6% used here is a hypothesis to explain the impact of exchange rates. It is a different figure from the 6% decrease in assets under management mentioned earlier.
-
1 dollar 150 yen → 160 yen (yen depreciation). 0.94 × 160 ÷ 150 ≒ 1.003. In yen terms, an increase of about 0.3%.
-
1 dollar 150 yen → 140 yen (yen appreciation). 0.94 × 140 ÷ 150 ≒ 0.877. In yen terms, a decrease of about 12.3%.
Even with the same drop in dollar-denominated gold prices, a weaker yen can cancel out the price decline, while a stronger yen can amplify the drop. The actual price movement of an ETF is also affected by the underlying index, trust fees, and the difference between the exchange price and the net asset value.
If you feel that ‘dollar-denominated gold has fallen, but my gold ETF hasn’t fallen much,’ first check the dollar-yen rate for the same period. The yen display on your trading screen becomes easier to read if you separate gold and exchange rates.
Compare the trading price and net asset value before buying
ETFs have a market price traded on the exchange and a net asset value which is the fund’s net assets converted per share. In situations where buy orders are concentrated, a gap can open between these two.
As a practical example, for the domestically listed Pure Gold Trust (1540), on September 30, 2025, the TSE closing price was 19,000 yen, and the net asset value was 17,342.19 yen, and the management company announced a divergence of approximately 9.56% the following day. This is a past case.
Suppose you bought a product with a net asset value of 10,000 yen for 11,000 yen on the market. If the net asset value remains at 10,000 yen and only the market price returns to that level, it is a loss of about 9.1% from your purchase price. Even if the gold price remains flat while you hold it, you may incur a loss just because the premium at the time of purchase shrinks.
When considering a purchase, check the date and time of the net asset value, the underlying index, the presence of currency hedging, and trust fees in the materials provided by the management company or the exchange. When comparing the market price and the net asset value, also consider the time lag in the evaluation. If gold or exchange rates moved during that time, part of the displayed difference can be explained by those price movements.
If your goal is diversification, start by thinking about what percentage of gold to hold
If you want to buy after seeing inflows into gold ETFs, first think about what you expect from gold within your assets. For example, if you want to change an allocation that is skewed toward stocks, what percentage it will be after purchase is just as important as the timing of the purchase.
Suppose you hold 500,000 yen in gold out of 10 million yen in assets, and while other assets remain flat, only gold rises by 20%; gold becomes 600,000 yen, and the total becomes 10.1 million yen. The ratio of gold rises from 5% to about 5.9%. Conversely, if gold falls by 20%, the total decreases by 100,000 yen, and the decline rate is 1%.
5% is just a calculation example. The appropriate ratio changes depending on how much of a price drop you can accept and what other assets you hold besides gold. If you are using news of fund inflows as a trigger, deciding on your holding ratio and review conditions in advance will make it harder for you to be swayed by subsequent price movements.
Summary
In October, there was a net inflow of $2.7 billion into gold ETFs, and gold holdings reached a record high at the end of the month. Even so, due to the decline in gold prices, the dollar-denominated assets under management have fallen by 6%.
When reading news about gold, separate the inflows and outflows of funds, holdings, and changes in valuation due to price. When considering your own performance holding in yen, you should also add the dollar-yen exchange rate and the difference between the ETF’s market price and its net asset value.
📚 Recommended books related to this article
“Now is the Time for ‘Gold'”
Author: Koichiro Kamei
Publisher: Shufunotomo
This book explains the basics of gold, as well as the relationship between global conditions, the weak yen, inflation, and gold prices for beginners. It is suitable for those who, triggered by this ETF data, also want to learn about the price movements of gold itself and the mechanism of pure gold accumulation.
*This article contains affiliate links.
❄️ Thank you for reading to the end today as well. Next time you see news about gold ETFs, let’s check together whether “money moved or prices moved.” If you found this helpful, I would be happy if you could support me with a like or follow.
📖 Reference materials
*As of November 9, 2026. Gold ETF aggregation is as of the end of October 2026. The calculations for exchange rates and allocation are examples for explanation purposes, excluding fees, taxes, etc.
#GoldInvestment #Gold #GoldETF #GoldTrust #1540 #ETF #AssetFormation #AssetManagement #DiversifiedInvestment #Portfolio #DollarYen #ExchangeRisk #GoldPrice #InvestmentBeginner