Gold ETF inflows collapse 78% in one month; investors are finally returning to stocks: Shweta Rajani

The latest AMFI data provided a figure that is difficult to ignore: gold ETF inflows fell from ₹24,000 crore to ₹5,255 crore in a single month – a drop of almost 78%. For some, it raised questions about whether retail investor confidence was wavering under the weight of geopolitical uncertainty and market volatility. Shweta Rajani, head of mutual funds at Anand Rathi Wealth, sees it very differently.

“Gold and silver received huge inflows in 2025 as investors got rid of debt – but now it is stabilising,” she told ET Now. The sharp rise in the price of gold attracted momentum-chasing capital, but this argument is no longer valid. Gold is currently trading nearly 9 to 10% below its peak, and intraday swings in both gold and silver have proven far more violent than most retail investors expected from a so-called safe haven.

The SIP story: fewer days, no declining confidence

On the decline in monthly SIP collections, Rajani was clear: it is a calendar effect, not a behavioral effect. February lost three effective working days compared to a normal month, mechanically reducing the number of SIP installments processed. Looking back to January 2025, when the SIP numbers were around ₹26,400 crore, February had seen a similar decline of ₹400-500 crore for the same reason. The underlying pattern is stable.

Crucially, active SIP accounts and live SIP contributions continue to grow. There is no data to suggest a meaningful increase in cancellations or pauses – the real early warning signs of the retail retreat. Rajani argues that the behavior of mid- and small-cap allocations during this volatile period indicates increasing investor sophistication: people are staying the course rather than reactively switching.

Flexicap funds are emerging as the preferred large-cap proxy

One nuanced trend Rajani identified is a quiet shift in the way investors approach their large-cap allocation. Flexicap funds – which typically hold 65 to 75% in large-cap stocks while offering fund managers the flexibility to move between market capitalizations – are increasingly used as a smarter alternative to pure large-cap funds. The implicit gamble: professional managers can handle volatility better than a rigid, index-linked allocation.

According to Rajani, the big picture is that Indian retail investors are becoming more resilient and critical. The current market volatility – rather than causing an exodus – appears to be functioning exactly as systematic investing is intended to do: delivering more units per rupee to disciplined investors who remain invested despite the turbulence.