Equity Index and Gold Trackers catch investor fancy in August 2025

15 Sep 2025 , 04:17 PM

PASSIVE FLOW HIGHLIGHTS FOR AUGUST 2025

Passive inflows have progressively increased in last 3 months. Passive flows spiked from ₹3,997 Crore in June 2025 to ₹8,259 Crore in July and further to ₹11,437 Crore in August 2025. Index trackers are once again getting all the attention from investors. The action in the month was dominated by inflows into domestic equity index ETFs, domestic equity index funds, Gold ETFs, and Silver ETFs. Debt funds and debt ETFs saw outflows in Aug-25.

Domestic equity-oriented ETFs led with inflows of ₹5,687 Crore in August 2025; followed by domestic equity index funds at ₹3,392 Crore, Gold ETFs at ₹2,190 Crore, and Silver ETFs at ₹1,760 Crore. With the tariff uncertainty and fund managers struggling to generate alpha, interest in index and precious metal trackers is back. Amidst de-dollarization; gold touched a new high in the spot markets at $3,675/oz. Out of the 12 categories of passive funds with flows; 8 categories saw net inflows in August 2025, while 4 categories saw net outflows.

HOW EQUITY INDEX FUNDS PERFORMED IN AUGUST 2025

The table ranks equity oriented index funds (direct) in India on 5-year returns.

Equity Index Funds Scheme Name	1 Year (%) Returns	3Year (%) Returns	5-Year (%) Returns
DSP Nifty 50 Equal Weight Index Fund Direct	0.00	16.70	23.06
DSP Nifty Next 50 Index Fund Direct	-8.90	15.83	20.67
HSBC Nifty Next 50 Index Fund Direct	-9.10	15.53	20.38
ICICI Prudential Nifty Next 50 Index Fund Direct Plan	-9.09	15.67	20.52
LIC MF Nifty Next 50 Index Fund Direct	-8.74	15.75	20.46
Motilal Oswal Nifty 500 Fund Direct	-1.52	14.97	20.33
Motilal Oswal Nifty Bank Index Fund Direct	7.06	11.20	19.81
Motilal Oswal Nifty Midcap 150 Index Fund Direct	-1.23	21.46	27.86
Motilal Oswal Nifty Next 50 Index Fund Direct	-8.71	15.88	20.42
Motilal Oswal Nifty Smallcap 250 Index Fund Direct	-6.69	21.51	28.58
Category Average	-3.45	15.36	19.05

Data Source: Morningstar India

In terms of 1-year returns, the equity index fund category overall generated average returns of -3.45%, while the average of the top-10 in this category stood at -4.69%. In terms of 3-year returns, the equity index fund category overall generated average returns of 15.36%, while the average of the top-10 in this category stood at 16.45%. On 5-year returns, the equity index fund category generated average returns of 19.05%, while the average of the top-10 in this category stood at 22.21%. However, the 5-year returns may be largely influenced by the post-pandemic bounce.

HOW DEBT INDEX FUNDS PERFORMED IN AUGUST 2025

The table ranks Debt oriented index funds (direct) in India on 1-year returns.

Debt Index Fund Scheme Name	1 Year (%) Returns
BHARAT Bond FOF April 2031 Direct	8.93
BHARAT Bond FOF April 2030 Direct	8.92
BHARAT Bond ETF FOF – April 2033 Direct	8.72
TATA Nifty G-SEC Dec 2029 Index Fund Direct	8.70
HDFC Nifty G-Sec July 2031 Index Fund Direct	8.67
HDFC Nifty G- Sec Apr 2029 Index Fund Direct	8.61
Bandhan Crisil IBX Gilt April 2032 Index Fund Direct	8.61
Nippon India Nifty G-Sec Oct 2028 Maturity Index Fund Direct	8.59
Invesco India Nifty G-sec Sep 2032 Index Fund Direct	8.59
Mirae Asset CRISIL IBX Gilt Index – April 2033 Index Fund Direct	8.58
Category Average	7.93

Data Source: Morningstar India

While debt index funds overall generated average returns of 7.93%; the top-10 debt funds generated average returns of 8.69%. The good news is that the dispersion of returns in the top-10 has been very low, which takes away the problem of choice for the investors. The top gainers are longer-duration gilt funds, which benefited from falling bond yields; helped by the dovish monetary stand adopted by the RBI.

PASSIVE FUND FOLIO GROWTH: AUGUST 2025 OVER AUGUST 2024

Passive funds folio growth has certainly slackened in recent months.

Passive Mutual Fund Schemes (Folios)	Folios AUG-25 (in Numbers)	Folios AUG-24 (in Numbers)	Growth (%)
Silver ETF	11,30,941	4,21,760	168.15%
Equity oriented ETFs (International)	9,67,637	5,71,529	69.31%
Gold ETF	80,33,855	56,60,198	41.94%
Equity oriented Index Funds (Domestic)	1,33,96,440	98,35,757	36.20%
Income/Debt Oriented Index Funds (Ex-TMIF)	19,105	14,699	29.97%
Equity oriented ETFs (Domestic)	1,66,45,937	1,30,36,167	27.69%
Other Index Funds	1,01,422	81,954	23.75%
Income/Debt Oriented Index Funds (TMIF)	1,80,951	1,51,819	19.19%
FOFs investing overseas in Active Funds	8,46,437	7,22,471	17.16%
Debt Oriented ETFs	25,08,082	22,43,072	11.81%
Equity oriented Index Funds (International)	2,55,295	2,58,966	-1.42%
FOFs investing overseas in Passive Funds	5,69,122	6,84,269	-16.83%
Total (Passive Funds)	4,46,55,224	3,36,82,661	32.58%

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

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

• Passive fund folios grew 32.58% yoy in August 2025; compared to 36.01% in July, 41.44% in June, and 43.29% in May 2025. There has been a gradual tapering of folio growth, but passive funds have done better than active funds on folio accretion. Total passive fund folios as of August 2025 stood at 446.55 Lakhs; compared to 437.70 Lakhs in July, 431.42 Lakhs in June, and 424.74 Lakhs in May 2025. Historically, active investing boredom leads to demand for passive funds.
• What about the leaders? Again, silver ETFs led folio growth at 168.15%, followed by international equity-oriented ETFs 69.31%, Gold ETFs 41.94%, and equity oriented Domestic Index Funds 36.20%. A total of 10 out of 12 categories saw folio expansion, with international equity-oriented index funds and FOFs investing in overseas passive funds witnessing folio contraction in August 2025.

Annual folio growth has fallen from above 50% to closer to 30% in last 8 months.

PASSIVE FUNDS AUM: AUGUST 2025 OVER AUGUST 2024

Passive fund AUM growth in August 2025 was impacted by market volatility, but India’s strong message at the SCO Summit in Tianjin should help.

Passive Mutual Fund Schemes	AUM Aug-25 (₹ Crore)	AUM Aug-24 (₹ Crore)	Growth (%)
Silver ETF	26,294.39	9,641.38	172.72%
Gold ETF	72,495.60	37,390.03	93.89%
FOFs investing overseas in Active Funds	22,777.56	17,159.46	32.74%
Equity oriented ETFs (International)	15,843.34	12,021.88	31.79%
Equity oriented Index Funds (Domestic)	1,87,727.34	1,45,843.92	28.72%
Equity oriented Index Funds (International)	6,265.54	5,123.25	22.30%
Income/Debt Oriented Index Funds (TMIF)	1,00,478.04	94,461.73	6.37%
Equity oriented ETFs (Domestic)	7,03,092.78	6,69,591.52	5.00%
FOFs investing overseas in Passive Funds	8,580.94	8,226.53	4.31%
Other Index Funds	3,671.66	3,565.20	2.99%
Debt Oriented ETFs	96,970.96	1,03,090.43	-5.94%
Income/Debt Oriented Index Funds (Ex-TMIF)	6,092.41	14,780.00	-58.78%
Total (Passive Funds)	12,50,290.56	11,20,895.34	11.54%

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

Here are some key inferences from the above table.

• Passive fund AUM yoy growth in August 2025 stood at 11.54%; compared to 13.97% in July, 20.36% in June, and 24.45% in May 2025. While the growth in AUM is sharply lower compared to year 2024, the equity component of the AUM has been impacted due to the market volatility. The good news is that passive fund fascination is returning.
• What about leaders and laggards? Silver ETFs led the growth at 172.72%, followed by Gold ETFs at 93.89%, and FOFs investing overseas in active funds at 32.74%. A total of 10 out of 12 categories saw AUM expansion, with ex-TMIF debt-oriented index funds and debt index ETFs witnessing AUM contraction in August 2025.

While the folio growth of passive funds is faltering, they are showing more resistance than folio growth of active funds. Probably, it is the big passive narrative that is still missing!