Passive investment instruments in India have continued to attract strong investor interest, with the first half of FY26 (April–September 2025) recording robust net inflows of ₹68,505 crore, according to data from the Association of Mutual Funds in India (AMFI). Exchange Traded Funds (ETFs) emerged as the primary driver of this growth, highlighting a clear shift among investors toward low-cost, diversified investment avenues.
ETFs Dominate Inflows
ETFs accounted for nearly 85% of total passive inflows, totaling ₹58,035 crore in the first half of the financial year.
- Equity ETFs contributed ₹25,960 crore, reflecting steady appetite for diversified equity exposure.
- Gold ETFs attracted ₹14,175 crore, while Silver ETFs saw inflows of ₹12,929 crore, showcasing continued investor interest in precious metals.
- Debt ETFs brought in ₹4,852 crore, and International ETFs added a modest ₹117 crore.
September 2025 was a particularly strong month, with Gold ETFs drawing ₹8,363 crore and Silver ETFs ₹5,342 crore, together accounting for 72% of the total ₹19,056 crore inflows for the month.
Index Funds Show Mixed Trends
While equity-oriented index funds attracted ₹17,632 crore over the six months, debt index funds, especially Target Maturity Index Funds (TMIFs), experienced significant outflows of ₹8,619 crore. Non-TM debt index funds also saw minor outflows of ₹55 crore, reflecting cautious sentiment in fixed-income passives amid evolving market conditions.
AAUM Rises, Led by Precious Metals and International Funds
The average assets under management (AAUM) of passive funds rose 11.75%, from ₹11,55,822 crore in April to ₹12,91,635 crore by September 2025. Silver ETFs led this growth with a 106% surge in AAUM, rising from ₹15,089 crore to ₹31,134 crore. Gold ETFs also recorded a 35% increase, while international ETFs, including equity and fund-of-funds schemes, posted 34–45% growth, indicating rising demand for global diversification.
New Product Launches Strengthen Passive Investment Landscape
From April to September 2025, the number of passive schemes offered by asset management companies increased from 615 to 678. Equity index funds saw the highest number of new launches with 30 additions, followed by 22 new equity ETFs.
This growth highlights the mutual fund industry’s focus on catering to evolving investor preferences for transparent, low-cost, and diversified investment products.
Conclusion
The strong inflows into passive funds, particularly ETFs, underline a broader trend in India’s investment landscape: investors are increasingly favoring cost-efficient, easily accessible, and diversified investment vehicles. With precious metals ETFs and international funds performing strongly, the first half of FY26 signals a continued shift towards passive strategies as investors seek stable, long-term wealth creation.
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