Gold ETFs attracted ₹4,451 crore in September, marking a 71.4% surge from ₹2,597 crore in August, according to data from the Association of Mutual Funds in India (AMFI). This represents the highest monthly inflow in seven months and the highest monthly inflow of FY2026-27 so far, as noted by ET Now. The September inflow reflects a steady, allocation-led approach to commodities amid global uncertainty, with investors seeking defensive assets amid market volatility. As reported by Business Standard, Suranjana Borthakur from Mirae Asset Mutual Fund noted that these inflows of about ₹4,500 crore reflect a steady, allocation-led approach to commodities amid global uncertainty. According to PTI, Manish Mehta, Chief Business Officer at SBI Mutual Fund, confirmed that assets under management in gold ETFs had reached ₹1.86 lakh crore, approaching their recent all-time high.
Recent data from ACE MF as of October 13, 2026, reveals significant differences in long-term performance across gold ETF schemes. UTI Gold ETF recorded the highest three-year return at 35.43%, followed by LIC MF Gold ETF at 35.32% and Invesco India Gold ETF at 35.08%. The performance gap narrows over five years, with LIC MF Gold ETF delivering 24.69% and UTI Gold ETF posting 24.48% returns. Other notable performers include ICICI Prudential Gold ETF at 34.95% and Axis Gold ETF at 34.95% for three-year returns, while Kotak Gold ETF returned 34.83% and Mirae Asset Gold ETF delivered 34.83% over the same period. The data highlights that while short-term performance can vary significantly, long-term returns across schemes have been broadly similar, with differences in expense ratios and tracking error being key factors for investors to consider.
The surge extends beyond India's borders, with global investors also turning to gold amid market uncertainty. According to the World Gold Council's September 2026 report, physically backed gold ETFs attracted US$10 billion globally during the month, taking third-quarter inflows to a record US$31 billion. Global gold ETF holdings increased by 67 tonnes in September to a record 4,256 tonnes, though total assets under management declined 7% month-on-month to US$574 billion, partly reflecting lower gold prices. PTI reports that Indian gold ETFs attracted US$496.2 million in September, taking year-to-date inflows to approximately US$4.7 billion. The council noted that inflows into Indian funds may have been supported by weakness in domestic equities, buying during the price correction and demand for portfolio diversification.
Despite delivering positive long-term returns, gold ETFs have experienced recent short-term weakness. ACE MF data as of October 13, 2026, shows that one-month returns of the schemes analysed were negative, ranging from -2.90% for ICICI Prudential Gold ETF to -2.93% for Nippon India ETF Gold BeES. This short-term dip highlights the fluctuations investors may experience even when a fund has delivered positive returns over three and five years. Experts attribute the recent volatility to multiple factors including geopolitical uncertainty, inflation concerns, gold's safe-haven appeal and expectations of further price gains. According to Mint, Adil Chacko from Anand Rathi Wealth highlighted that tensions in West Asia and crude oil prices remaining elevated have naturally increased gold demand, while noting that investors are influenced by gold's recent strong performance and expect the same trend to continue.
The choice between gold ETFs and physical gold depends largely on investment purpose and existing holdings. As reported by PTI, physical gold may make more sense for those buying jewellery for personal use, weddings or festive occasions, though jewellery purchases can involve making charges and resale proceeds may differ from original purchase cost. Gold ETFs allow investors to gain exposure to gold prices without having to store the metal, traded on stock exchanges and requiring a demat and trading account. Shweta Shastri from InCred Money suggests that gold should account for around 10% of a portfolio, noting that historically this has been considered a balanced allocation, enough to protect volatility without compromising long-term wealth creation. The WGC's research on pension funds shows that selected funds in countries such as the Netherlands, US, UK and Australia have held gold allocations of around 2% to 5%, though these examples should not be treated as universal recommendations for retail investors.
