Passive Funds grow Folios by 37.7%, AUM by 23.1% in FY26

FY26 BELONGED TO THE PASSIVE FUNDS

It was a mix of precious metals and indices, but passive funds came of age on a more consistent basis in FY26. On a yoy basis, the growth in passive folios and passive AUM has been impressive, although this growth can be largely attributed to the surge in retail appetite for gold and silver ETFs. Out of the 12 categories of passive funds, only FOF in overseas Passive Fund saw folio contraction. The rest of the passive categories saw expansion in folios. Within passive funds, Equity Index ETFs, Equity Index Funds, and Gold ETFs lead in the overall AUM rankings.

Data Source: AMFI (Figures are ₹ in Crore) # - flows pertain to March 2026

PASSIVE FLOW STORY IN MARCH 2026

• Overall passive fund flows at ₹30,768 crore in March 2026 was more than twice the February 2026 flows, despite the flows into gold and silver ETFs tapering.

• In March 2026, gold ETF flows tapered to just ₹2,266 crore, and is sharply lower than the highs touched in the month of January 2026. Gold prices peaked in January.

• For the second month in a row, the Silver ETF flows were negative in March 2026, as ETF investors got rattled by the sharp volatility in silver prices.

• Net inflows in March 2026 were dominated by Equity Index ETFs at ₹23,820 crore, followed by Equity Index Funds at ₹6,415 crore.

• Debt oriented ETFs saw net selling in March 2026 to the tune of ₹3,284 crore as markets were wary of a possible rate hike by the RBI to contain inflation.

WHAT WE READ FROM THE FOLIO AND AUM STORY IN MARCH 2026

While AUM captures overall impact, it is folios that actually captures retail intensity of demand. In a falling market like in March, folios give a more realistic picture.

• Let us look at folio growth yoy for the year to March 2026. Silver ETFs at 711%, Gold ETFs at 77.8%, and non-TMIF debt funds at 57.9%, and FOFs in overseas Active Funds at 57% were the big drivers of folios growth.

• In the case of silver and gold ETFs, the surge in folios on a yoy basis was more due to the lag effect of previous months. However, the surge in folios in overseas FOFs in active funds is an indication that investors are looking at global diversification.

• What about the AUM growth story on yoy basis. Again, it was silver ETFs at 420% and gold ETFs at 191% that ruled the roost. Despite the correction since late January, the rally up to January 2026 had been fairly sharp and intense to hold the gains.

• Apart from gold and silver ETFs, equity index ETFs and equity index funds saw subdued AUM growth due to substantial value depletion in the March quarter. FOFs in overseas active funds saw sharp AUM gains on the global equity rally.

FY26 saw 2 interesting trends. Firstly, there was a distinct shift towards passive equity as an asset class, especially in the large cap story capture. After all, indices give large cap exposure with lower cost and better diversification. Secondly, demand for gold and silver is beyond just price play. The steady folio growth indicates that mutual fund investors are genuinely looking at asset class diversification through precious metals.