Silver ETFs Snap Four-Month Outflow Streak with Massive Inflows as Safe-Haven Demand Surges

Silver ETFs Snap Four-Month Outflow Streak with Massive Inflows as Safe-Haven Demand Surges​

Silver exchange-traded funds (ETFs) recorded their highest ever monthly inflows in June, successfully ending a four-month period of net outflows. The category attracted substantial net investments totaling Rs 4,286 crore, according to data released by the Association of Mutual Funds in India (AMFI). This sharp turnaround indicates investors returned strong confidence in silver ETFs following recent price corrections.

Silver ETFs Record Highest Monthly Inflows, Ending Outflow Streak​

The shift marks a significant psychological victory for the category, which had seen continuous redemptions over the past four months. Despite this record inflow performance, assets under management (AUM) for silver ETFs decreased to Rs 78,943 crore by the end of June, down from Rs 86,217 crore in May. This decline was attributed to mark-to-market losses as silver prices fell during the month.

Retail investor participation also remained robust, with folios for silver ETFs reaching 53.93 lakh in June. The strong retail appetite suggests widespread belief among investors regarding the intrinsic value of precious metals.

Gold ETF Rally Continues: Investors View Price Correction as Buying Opportunity​

Investor interest remained high in gold ETFs, which continued to attract net inflows of Rs 3,443 crore during the month. AMFI Chief Executive V N Chalasani noted that many participants viewed the recent correction in bullion prices as an attractive entry point for increased allocation.

However, mirroring the trend seen in silver, gold ETF AUM also saw a dip, settling at Rs 1.70 lakh crore from Rs 1.84 lakh crore in May. This decrease reflects valuation losses despite sustained buying interest in the underlying asset class.

Safe-Haven Demand Remains Intact Amid Global Volatility​

The robust inflows across both silver and gold ETFs are underpinned by persistent geopolitical uncertainty and volatile global financial markets. Expectations of lower global interest rates have also strongly supported demand for safe-haven assets, maintaining a consistent trend.

On the domestic front, AMFI pointed out an improved macroeconomic outlook over the past month. This improvement is attributed to easing domestic bond yields and lower crude oil prices, alongside expectations that India will remain the world's fastest-growing major economy.

Broader Mutual Fund Industry Witnesses Steady Growth​

The broader mutual fund industry saw steady momentum in June. Total assets under management (AUM) for mutual funds rose by 0.79 percent month-on-month, reaching Rs 82.22 lakh crore. Passive mutual funds were a significant driver of this growth, receiving net inflows totaling Rs 16,724 crore.

Other ETFs accounted for the majority of these passive fund inflows at Rs 13,238 crore. In contrast, index funds experienced a marginal net outflow amounting to Rs 59 crore. Equity mutual funds, however, extended their inflow streak by another month, attracting net investments of Rs 28,973 crore.