Net inflows have also shown a CAGR of 69.53% over the past five years, up from Rs 597.26 crore in September 2020.
Also Read | How to tidy up your mutual fund portfolio and boost returns this Diwali
“Domestic gold prices have crossed Rs 1 lakh per 10 grams. Moreover, global factors such as central bank buying, geopolitical tensions, and expectations of US rate cuts have made gold a preferred safe-haven asset. These factors have turned Gold ETFs into the flavour of the season, as investors favour them for better liquidity, transparency, and alignment with global prices. Unlike physical gold, there are no storage hassles, and concerns around purity and theft are avoided,” according to a press release by ICRA Analytics.
Net inflows into Gold ETFs rose nearly 281.96% month-on-month, from Rs 2,189.51 crore in August 2025. The net AUM of Gold ETFs grew 126.34% year-on-year to Rs 90,135.98 crore in September 2025, up from Rs 39,823.50 crore in September 2024. Month-on-month, net AUM increased 24.33%, from Rs 72,495.60 crore in August 2025.
“Escalating geopolitical tensions, global uncertainties, and a dynamic market outlook are boosting gold’s safe-haven appeal. Investors favour Gold ETFs for their liquidity, transparency, cost-effectiveness, and ease of trading compared with physical gold. Attractive returns on most ETFs have also drawn investors. Assets under management have nearly doubled year-on-year. For portfolio diversification, inflation protection, and tax-efficient exposure to gold, ETFs remain compelling. Strategic entry after short-term corrections, such as post-Diwali, could offer attractive opportunities for phased investments,” said Ashwini Kumar, Senior Vice President and Head, Market Data, ICRA Analytics.At present, there are 22 Gold ETFs in the market, including four launched in 2025.Gold-based ETFs delivered an average return of 50.97% over the past one year. Over the last three years, these funds generated an average return of 30.36%, while over five years, they provided an average return of 16.93%.
The top five Gold ETFs based on five-year CAGR were:
LIC MF Gold ETF: 17.23%
Quantum Gold Fund: 17.09%
Invesco India Gold ETF: 17%
Axis Gold ETF: 16.97%
ICICI Prudential Gold ETF: 16.95%
Also Read | Sunil Subramaniam, Ex-MD of Sundaram Mutual Fund, joins BayFort Capital as advisor
“Rally in gold prices is attributed to geopolitical factors, supported by global uncertainties. Demand for physical gold has generally risen across various countries. The advent of futures and ETFs has drawn investors to non-physical gold, making this asset class highly sensitive to global developments. This trend is expected to continue, keeping gold prices firm during the festive season and beyond in the near- to mid-term. The benign interest rate environment also supports gold prices. Investors are likely to remain optimistic about the outlook, while remaining cautious due to high valuations and potential volatility,” Kumar added.
as a Reliable and Trusted News Source