Gold ETF inflows surge 3x as equity flows slip in December

Summary: Gold ETF inflows more than tripled in December on a monthly basis, while equity funds saw lower participation. Check how the other categories performed in the story below.

Equity mutual fund inflows moderated in December as markets remained flat amid tepid investor interest. Equity schemes drew net inflows of Rs 28,054 crore during the month, down from Rs 29,911 crore in November, according to data from the Association of Mutual Funds in India (AMFI).

Gold exchange-traded funds (ETFs), meanwhile, saw a staggering three times monthly surge in net inflows at Rs 11,647 crore. Silver ETFs also saw healthy inflows of Rs 3,962 crore.

Over the past year, gold funds have delivered average returns of about 74 per cent, while silver funds are up a striking 156 per cent, making the asset class hard to ignore for investors seeking both returns and a hedge against equity volatility.

In the equity segment, December still marked the 58th consecutive month of net inflows since March 2021, underscoring the continued stickiness of retail participation.

This was also reflected by systematic investment plan (SIP) contributions hitting a fresh record of Rs 31,001 crore, a new monthly high.

Flexi-cap funds stay in favour as investors seek balance

Within equity categories, flexi-cap funds once again topped the inflow charts, attracting Rs 10,019 crore, the fifth straight month they have led equity flows.

Mid-cap funds followed with Rs 4,176 crore, closely trailed by large & mid-cap funds (Rs 4,094 crore) and small-cap funds (Rs 3,824 crore).

The trend suggests investors are still allocating across market segments but prefer diversified mandates over narrowly focused bets. Sectoral and thematic funds, for instance, saw relatively muted inflows of Rs 946 crore.

Hybrid schemes also saw healthy inflows of Rs 10,756 crore. Multi-asset allocation funds dominated, pulling in Rs 7,426 crore, nearly 70 per cent of total hybrid inflows, as investors sought diversification and downside cushioning.

Balanced hybrid and dynamic asset allocation funds also continued to attract steady interest.

Debt funds see year-end pressure

Meanwhile, debt funds recorded net outflows of Rs 1.32 lakh crore, led by liquid and money-market categories, largely due to year-end and advance tax-related redemptions by institutional investors.

Specialized Investment Funds (SIFs) also gained traction, with assets rising to Rs 4,892 crore in December and monthly inflows of Rs 1,933 crore, led by hybrid and equity-oriented strategies, signalling early investor interest in more flexible, differentiated products.

Which gold funds should you add to your portfolio?

Amid rising geopolitical tensions and high volatility across equity markets, gold continues to earn investor favour. To find out which funds deserve your money, head to Value Research Fund Advisor where our analyst recommendations can help you make the right choice according to your investment goals.

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Also read: Equity fund inflows rebound in Nov after four-month slowdown