Over the previous 5 years, via which the worth of gold per troy ounce surged 86% in greenback phrases, company belongings beneath administration (AUM) in gold ETFs has climbed at a speedy 55% yearly, reaching ₹36,154.5 crore by March 2025, confirmed Worth Analysis knowledge.
Rising institutional confidence
Their share of whole Gold ETF AUM has climbed to a document excessive of 61.4%—from 50% in March 2020.
Against this, retail buyers noticed their share within the AUM greater than halve—to 7.5% in 2025 from 16.1% in 2020. Nonetheless, the variety of retail folios jumped 37% year-on-year in 2025 to about 6.8 million, whereas their AUM climbed 39% to ₹4,440 crore via the yr that witnessed the largest value improve for the safe-haven steel on institutional shopping for globally.
Company buyers embrace corporations, household workplaces, trusts, and different organisations. Their rising participation is within the wake of the record-breaking rally in gold costs prior to now yr.
Typically, company entities choose investing in cash market funds/liquid funds as a result of excessive liquidity and low threat. Liquid funds don’t cost any entry or exit load, facilitating straightforward money administration. Nonetheless, they’re additionally taking a look at gold ETFs as part of diversification of their investments as it’s simpler to carry gold in paper type. “They (establishments) at the moment are extra actively allocating to gold as a part of diversified methods aimed toward managing threat and preserving capital,” stated Vikram Dhawan, Head of Commodities and Fund Supervisor at Nippon India Mutual Fund. “This shift displays rising institutional confidence in Gold ETFs as an environment friendly and clear car for accessing bullion publicity inside a regulated framework.”
Inflation, threat hedge
Gold costs crossed ₹1 lakh per 10 grams in June 2025, pushed by safe-haven demand amid geopolitical tensions. On the finish of March this yr, 24-carat gold was priced at ₹89,000 per 10 grams, up practically 30% from ₹69,000 a yr earlier.
Part of the company contribution to the entire gold ETF AUM additionally consists of retail investor contribution into the product via the Fund of Fund (FoF) class, which invests in these funds. Mutual funds’ FoFs put money into different schemes or merchandise.
When mutual funds report ETF holdings by investor sort, the FoF investments into ETFs are sometimes labeled beneath “company” AUM and never beneath retail or HNI. It is because the holder of the ETF models is the FoF scheme itself, which is managed by a mutual fund.
“The AUM figures primarily mirror company investments as a result of retail buyers normally entry gold via Fund of Funds (FoFs), which in flip put money into Gold ETFs,” stated Niranjan Avasthi, senior vice chairman, Edelweiss AMC.
Moreover, multi-asset funds, standard amongst buyers, additionally allocate to gold ETFs. In instances the place an AMC doesn’t supply its personal gold ETF, investments from its gold FoFs or multi-asset funds are routed into gold ETFs of different AMCs. These flows are labeled as company AUM within the underlying gold ETFs, Avasthi stated.
AMCs that do not need their very own gold ETF put money into such ETFs of different asset managers when cash flows into their gold FoFs. Because of this, that is recorded as company AUM in these gold ETFs, Avasthi stated.
Tax tweaks
The upper flows from particular person buyers via gold FoFs are partly on account of the extra beneficial taxation since July 2024. The federal government, in its price range announcement, stated long-term capital gains tax on gold and equity-oriented FoFs can be at 12.5% if held over 24 months.