Precious metals ETFs added a combined 2.8 million investment accounts, or folios, in January 2025, accounting for 55 percent of net sector-level folio additions last month. Last month’s additions were more than five times the average monthly increase in 2025. By comparison, equity funds added just 1.1 million folios.
Investor participation is also increasing through the FoFs route. Net new account additions in domestic FoFs, which include all equity, debt and commodity schemes, have seen a sharp increase in recent months, largely in line with the rebound in gold and silver ETFs. In January, domestic FoFs added 2.2 million accounts.
The industry does not provide separate data for gold and silver FoFs.
Interestingly, net new account openings in silver ETFs were higher compared to gold ETFs, which is a much larger fund category. Silver ETFs added a net 1.6 million folios in January, while gold ETF folios grew by 1.2 million.
According to experts, the sharp rise in precious metals prices is attracting new investors to gold and silver schemes, but silver’s relatively higher volatility is also attracting momentum-driven investors, fueling a surge in short-term trading activity in silver ETFs.
“Silver, which is structurally more volatile than gold, tends to attract higher momentum-driven participation. The sharper price movements encourage investors to look for short-term opportunities, which is also reflected in the faster folio growth of silver ETFs compared to gold ETFs,” said Sriram BKR, Senior Investment Strategist at Geojit Investments.
Partha Sen Gupta, Joint MD & CEO at Systematix Private Wealth, attributed a similar reason to the rise in silver ETF folios. “The frenzy in silver ETFs appears to be driven in part by short-term return expectations. A 170 percent annual gain naturally attracts momentum traders looking for quick upside, especially when recent price declines have been superficial,” he said.
The last time an MF category witnessed a similar pace of folio additions was in the first half of 2024, when thematic and sectoral funds added record numbers of accounts. However, unlike gold and silver ETFs, growth in thematic funds has been largely driven by a slew of new funds.
The growing interest of investors in gold and silver is also clearly visible in the inflows. Net inflows into gold ETFs surpassed collections by active equity MF schemes for the first time last month. Gold ETFs attracted net inflows of Rs 24,040 crore in January, while silver ETFs attracted nearly Rs 9,500 crore. Active equity schemes continued to witness moderation in capital flows as net inflows fell to a seven-month low of Rs 24,028 crore.
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