Gold and silver ETFs push passive fund share to record high

Passive funds have regained momentum in 2025, with their share in the overall mutual fund industry reaching a record high, driven largely by strong inflows into gold and silver exchange-traded funds (ETFs). As of November 2025, passive funds accounted for 17.4 per cent of total mutual fund assets under management, up from 16.6 per cent at the end of December 2024.

The renewed interest follows a temporary slowdown in 2024, when active equity schemes—particularly small-cap, mid-cap and thematic funds—attracted the bulk of investor inflows amid strong risk appetite. In 2025, heightened volatility, geopolitical uncertainty and rising interest in inflation hedges have shifted investor focus back to commodities-linked passive products.

Gold and silver ETFs have benefited from strong price movements and their role as portfolio diversifiers, attracting both retail and institutional investors. Passive funds also appeal due to lower expense ratios, transparency and predictable tracking of underlying indices or commodities.

Industry participants note that the rising share of passive funds reflects a maturing investor base that increasingly values cost efficiency and asset allocation discipline. The trend is expected to continue as more investors adopt diversified, long-term portfolio strategies combining active and passive investment approaches.

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