Gold Exchange Traded Funds (ETFs) have seen strong investor demand amid rising geopolitical uncertainty and sharp gains in gold prices, according to ICRA Analytics.
The total assets under management (AUM) of Gold ETFs stood at Rs 1,71,468.4 crore in March 2026, nearly doubling from Rs 58,887.99 crore in March 2025. This marks a year-on-year increase of about 191.18 per cent. Over five years, AUM has surged at a compound annual growth rate (CAGR) of 64.76 per cent, rising from Rs 14,122.72 crore in March 2021.
Net inflows into Gold ETFs also turned positive in March 2026 at Rs 2,265.68 crore, compared with net outflows of Rs 77.21 crore in the same month last year. However, inflows declined sharply on a month-on-month basis, falling 56.88 per cent from Rs 5,254.95 crore in February 2026.
ICRA Analytics said the trend reflects strong investor preference for gold as a defensive asset amid global uncertainty.
Investor preference strengthens amid volatility
“Gold ETFs have seen a clear rise in preference during the recent phase of heightened geopolitical volatility and sharp gold price appreciation, as investors, both retail and institutional, have actively used them as a defensive and tactical allocation within portfolios,” said Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics.
He added that global uncertainty and strong returns from gold have reinforced its role as a safe-haven asset.
The data shows consistent growth in investor participation over the years. Net inflows have moved from Rs 662.45 crore in March 2021 to Rs 2,265.68 crore in March 2026, despite intermittent volatility in flows.
Gold ETF schemes expand to 26 funds
The number of Gold ETF schemes has also expanded, with 26 schemes currently in the market. Of these, six were launched in FY2025–26, indicating growing product expansion in the segment.
A performance analysis of Gold ETFs shows strong long-term returns. The average one-year returns across most schemes range between 58.81 per cent and 62.85 per cent, while five-year compound annual growth rates (CAGR) range from 25.78 per cent to 26.11 per cent.
Even amid short-term volatility, inflows have remained positive for most periods. Kumar noted that temporary fluctuations did not indicate a structural shift in investor sentiment.
Flows remain resilient despite short-term correction
“Even during periods of short-term correction, Gold ETFs retained investor relevance. Although inflows moderated sharply in February and March 2026 due to gold price correction and temporary easing of global risk aversion, flows remained positive, indicating that investor interest had not structurally reversed,” he said.
The steady rise in Gold ETFs has been supported by their growing acceptance as a portfolio diversification tool. Market participants say investors are increasingly treating Gold ETFs as a tactical allocation rather than a long-term cultural holding.
Strong returns across leading Gold ETF schemes
“Gold ETFs are better suited for investment, portfolio diversification and tactical asset allocation, while physical gold is more appropriate for consumption and long-term holding driven by cultural preference,” Kumar said.
He added that Gold ETFs provide a more transparent and efficient way to gain exposure to gold prices compared to physical gold, which serves non-investment objectives.
Performance data shows strong returns across leading schemes. Axis Gold ETF delivered 60.33 per cent one-year returns and 26.02 per cent five-year CAGR. ICICI Prudential Gold ETF posted 60.65 per cent one-year returns and 26.07 per cent five-year CAGR. Aditya Birla Sun Life Gold ETF recorded the highest one-year return at 62.85 per cent.
Other major funds such as UTI Gold ETF, Kotak Gold ETF, Nippon India ETF Gold BeES, HDFC Gold ETF and Quantum Gold Fund also delivered one-year returns in the range of around 60 per cent, reflecting broad-based strength across the category.