What’s driving the surge in Gold ETFs?:Investments jump 540% in a year; net AUM touches ₹1.84 lakh crore

As gold prices hit record highs over the past year, Indian investors have increasingly shifted towards digital gold. According to the latest data from the Association of Mutual Funds in India (AMFI), investments in Gold Exchange Traded Funds (ETFs) have surged sharply, with net Assets Under Management (AUM) more than doubling year-on-year as of January 31, 2026. In January alone, Gold ETFs attracted investments exceeding ₹24,000 crore. AMFI data shows that Gold ETFs recorded net inflows of ₹24,039.96 crore in January 2026, compared to just ₹3,751.42 crore in January 2025. This marks a year-on-year jump of 540.82% in monthly inflows. Compared to December 2025 inflows of ₹11,646 crore, January saw a 106% increase. Gold ETF Net AUM Rises to ₹1.84 Lakh Crore Rising investor confidence has also pushed Gold ETF assets under management sharply higher. As of January 31, 2026, net AUM stood at ₹1,84,276.96 crore. This is up from ₹51,839 crore a year earlier, reflecting a growth of around 255%. On a month-on-month basis, net AUM rose 44% from ₹1,27,896 crore recorded on December 31, 2025. The sharp rise indicates a growing preference for paper or digital gold over physical gold. Physical Gold Prices Fuel Investor Interest Market experts attribute the surge in Gold ETF investments primarily to the steep rise in physical gold prices. Over the past year, gold prices have climbed by 90% to 100%. On January 29, 2026, 24-carat gold touched an all-time high of ₹1,76,121 per 10 grams. Rapid price appreciation has encouraged investors to seek exposure through gold funds. Average Net AUM Also Sees Sharp Growth The average net AUM of Gold ETFs also rose significantly in January 2026 to ₹1,50,380.66 crore, compared to ₹47,940.63 crore in January 2025. This represents a year-on-year increase of 213.68%. Why Are Investors Favouring Gold ETFs? Experts highlight several advantages of Gold ETFs over physical gold: What Is a Gold ETF? A Gold Exchange Traded Fund is a market-traded instrument that tracks gold prices. Each Gold ETF unit typically represents one gram of pure gold. These units can be bought and sold on stock exchanges such as the BSE and NSE, just like shares. Investors do not receive physical gold; instead, they get the equivalent cash value based on gold prices at the time of sale. You Can Invest in Gold ETFs with a Small Amount Additional Benefits 5 Key Benefits of Investing in Gold ETFs · Buy Gold in Small Quantities: Gold ETFs are purchased in units, with one unit equal to one gram of gold. This allows investors to buy gold in small amounts or invest regularly through SIPs. In contrast, physical gold is usually sold in larger quantities, such as 10 grams, making small purchases less convenient. · Assured Purity: Gold ETF prices are transparent and standardized, as they follow global benchmarks set by the London Bullion Market Association (LBMA). Each Gold ETF unit represents 99.5% pure gold, eliminating concerns about purity that often arise with physical gold. · No Making Charges: Investing in Gold ETFs involves minimal costs, typically less than 1% brokerage and around 1% annually as fund management fees. This is significantly lower than the 8–30% making charges paid when buying physical gold in the form of jewellery, coins, or bars. · High Security: Gold ETFs are held electronically in a demat account, removing the risk of theft and storage concerns. Apart from standard demat charges, there are no additional costs for safekeeping—unlike physical gold, which may require lockers or security arrangements. · Easy Buying and Selling: Gold ETFs can be bought or sold instantly during market hours, just like shares. They can also be pledged as collateral to avail loans, adding to their liquidity and convenience. How to Invest in Gold ETFs To invest in Gold ETFs, you need a demat and trading account with a registered broker. Gold ETF units can be purchased on the NSE or BSE, with the investment amount debited from the linked bank account. The units are credited to your demat account within two working days and can be sold through your trading account at any time. Why Limited Allocation to Gold Is Advisable Experts recommend limiting gold exposure to 10–15% of your overall investment portfolio. While gold can act as a hedge and provide stability during market volatility, excessive allocation may reduce long-term returns compared to growth-oriented assets like equities.