Gold ETFs flatter the passive investing street in January 2025

13 Feb 2025 , 09:58 AM

PASSIVE FLOW HIGHLIGHTS FOR JANUARY 2025

After tepid flows into passive funds in November and December 2024; these passive funds were back into their elements in January 2025. The credit for this recovery should largely go to Gold ETFs. Net inflows into passive funds in January 2025 grew multi-fold to ₹10,255 Crore. Here is a look at the passive fund categories that saw robust inflows. Domestic equity index funds led the way with inflows of ₹4,347 Crore followed by Gold ETFs at ₹3,751 Crore, Debt oriented TMIFs at ₹1,052 Crore, and Equity oriented domestic ETFs at ₹772 Crore. Among the categories that saw net outflows in January 2025 were Debt Funds (ex-TMIR) and FOFs investing overseas in passive funds. Out of the 12 categories of passive funds with active flows; 9 categories showed positive net flows and 3 showed negative flows.

HOW INDEX FUNDS AND INDEX ETF PERFORMED IN JANUARY 2025

The table below ranks index funds and index ETFs in India on 3-year returns (regular plans). We have only considered funds where a 3-year track record is available.

Passive Fund Scheme Name	1 Year (%) Returns		3-Year (%) Returns		Launch (%) Returns
CPSE ETF	0.40	34.30		14.87
Mirae Asset NYSE FANG+ ETF	44.70	34.24		26.58
Nippon India ETF Nifty PSU Bank BEES	-13.26	27.36		5.61
Kotak Nifty PSU Bank ETF	-13.27	27.35		4.83
BHARAT 22 ETF	-1.52	26.38		14.09
ICICI Prudential Nifty Auto ETF	15.86	25.84		24.65
Nippon India Nifty Auto ETF	15.75	25.80		25.11
Kotak Nifty Midcap 50 ETF	3.37	20.75		19.77
Mirae Asset S&P 500 Top 50 ETF	30.45	20.30		19.13
Motilal Oswal Nifty Midcap 100 ETF	4.61	20.26		14.80

Data Source: AMFI

There are a total of 191 index funds and index ETFs with minimum 3 year track record. These 191 funds have delivered average returns of 9.93% over a 1-year period. Over a 3-year period, the CAGR returns on these funds stands at 12.77%. Let us now shift focus to how the fund of funds (FOFs) have performed in January 2025.

HOW FUND OF FUNDS (FOF) PERFORMED IN JANUARY 2025

The table below ranks fund of funds (FOFs) in India on 3-year returns (regular plans). We have only considered funds where a 3-year track record is available and the other funds without such a track record have been eliminated.

Passive Fund Scheme Name	1 Year (%) Returns	3-Year (%) Returns	Launch (%) Returns
Mirae Asset NYSE FANG+ ETF FOF	73.15	40.03	33.35
Mirae Asset S&P 500 Top 50 ETF FOF	56.98	26.34	24.40
ICICI Prudential BHARAT 22 FOF	-1.82	26.16	17.13
Motilal Oswal Nasdaq 100 FOF	43.46	23.43	26.55
LIC MF Gold ETF FOF	36.91	19.77	6.85
Kotak Nasdaq 100 FOF	26.51	19.56	17.12
Edelweiss US Technology Equity FOF	30.14	19.46	24.41
SBI Gold Fund	35.22	19.38	7.19
Axis Gold Fund	35.11	19.35	7.24
Quantum Gold Savings Fund	35.29	19.32	8.99

Data Source: AMFI

There are a total of 101 fund of funds (FOF) with minimum 3 year track record. If you look at the average returns, these 101 funds have generated average returns of 17.71% over a 1-year period. Over a 3-year period, the CAGR returns on these funds stands at 11.21%. However, what is important is that in index ETFs, index funds and in FOFs, there are wide variations in terms of 3-year returns, which could be due to the disparate nature of funds.

PASSIVE FUND FOLIO GROWTH: JANUARY 2025 OVER JANUARY 2024

We see some good tidings from the folio growth numbers of passive funds in January 2025. The table below compares the folio growth of these 12 categories of passive funds.

Passive Mutual Fund Schemes (Folios)	Folios Jan-25 (in Numbers)	Folios Jan-24 (in Numbers)	Growth (%)
Silver ETF	6,19,844	1,89,756	226.65%
Equity oriented Index Funds (Domestic)	1,22,27,516	62,53,215	95.54%
Equity oriented ETFs (International ETFs)	7,35,244	3,85,133	90.91%
Other Index Funds	94,728	62,741	50.98%
Equity oriented ETFs (Domestic ETFs)	1,55,09,092	1,06,02,197	46.28%
Gold ETF	64,97,498	49,72,469	30.67%
Income/Debt Oriented Index Funds (Ex-TMIF)	18,757	15,285	22.72%
Income/Debt Oriented Index Funds (TMIF)	1,69,458	1,41,111	20.09%
Income/Debt Oriented ETFs	23,67,676	20,03,408	18.18%
Equity oriented Index Funds (International)	2,51,005	2,30,293	8.99%
Fund of funds investing overseas in Active Funds	7,41,437	7,86,121	-5.68%
Fund of funds investing overseas in Passive Funds	6,30,008	7,70,535	-18.24%
Total of Passive Funds	3,98,62,263	2,64,12,264	50.92%

Data Source: AMFI (TMIF is target maturity index funds)

Here are some key inferences from the yoy growth in passive folios.

• Passive fund folios yoy growth in January 2025 stood at 50.92%; compared to 52.41% in December, 52.42% in November, 49.71% in October, and 45.71% in September 2024. The recent tapering is more due to a spike in SIP closures. Total folios of passive funds stood at 398.62 Lakhs in January 2025; compared to 389.19 Lakhs in December, 382.06 Lakhs in November, and 368.23 Lakhs in October 2024.
• What about leaders and laggards? Again, silver ETFs led folio growth at 226.65%, followed by equity oriented domestic index funds at 95.54% and equity oriented international ETFs at 90.91%. A total of 10 out of 12 categories saw folio expansion, with only FOFs investing in overseas active funds and overseas passive funds contracting.

The good news is that folio growth in passive funds continues to be above 50%.

PASSIVE FUNDS AUM: JANUARY 2025 OVER JANUARY 2024

We have seen some pressure on AUM growth of passive funds in recent months due to the market correction. Here is the AUM compared yoy

Passive Mutual Fund Schemes	AUM Jan-25 (₹ Crore)	AUM Jan-24 (₹ Crore)	Growth (%)
Silver ETF	13,565.58	3,704.54	266.19%
Gold ETF	51,839.39	27,778.08	86.62%
Equity oriented Index Funds (Domestic)	1,58,301.64	89,217.72	77.43%
Equity oriented Index Funds (International)	5,689.70	4,077.89	39.53%
Equity oriented ETFs (International ETFs)	14,027.08	10,128.71	38.49%
Equity oriented ETFs (Domestic ETFs)	6,39,212.95	5,20,654.37	22.77%
Fund of funds investing overseas in Passive Funds	8,929.92	7,547.24	18.32%
Fund of funds investing overseas in Active Funds	19,135.15	16,496.86	15.99%
Other Index Funds	3,498.82	3,272.82	6.91%
Income/Debt Oriented ETFs	96,097.13	92,756.97	3.60%
Income/Debt Oriented Index Funds (TMIF)	95,059.87	93,295.90	1.89%
Income/Debt Oriented Index Funds (Ex-TMIF)	13,570.47	14,660.23	-7.43%
Total of Passive Funds	11,18,927.68	8,83,591.32	26.63%

Data Source: AMFI (TMIF is target maturity index funds)

Here are some key inferences we can draw from the above comparative table.

• Passive fund folios yoy growth in January 2025 stood at 26.63%; compared to 27.18% in December, 37.3% in November, and 42.87% in October 2024. The AUM growth of passive funds has surely taken a hard hit due to the overall market correction.
• What about leaders and laggards? Again, silver AUM led the growth at 266.2%, followed by Gold ETFs at 86.6%, and equity oriented domestic index funds at 77.4%. A total of 11 out of 12 categories saw folio expansion, with only debt index funds (ex-TMIF) contracting -7.43% in January 2025.

While the AUM growth has been hit by the weakness in the market, the positive takeaway is that the folio growth continues to be robust.