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Avoid need to chop and change funds due tounderperformance; supplement with active funds in satellite portion

- HIMALI PATEL

For the first time in September 2025, net new folio additions in passive mutual fund schemes surpassed those in active equity schemes.

Passive schemes — spanning index funds, exchange-traded funds (ETFs) and fund-of-funds (FoFs) — added 2.1 million accounts, compared with 1.4 million new accounts in active equity funds.

Key drivers: Precious metal ETFs

Precious-metal ETFs were the main catalyst. “Passive schemes added a record number of folios in September, driven by gold and silver ETFs,” says Siddharth Srivastava, head -ETF product & fund manager, Mirae Asset Investment Managers (India).

Gold and silver funds, which have returned 56-69 per cent year-to-date (YTD), attracted strong interest. “Returns of precious metals led to momentum chasing and created FOMO (fear of missing out) among investors, driving inflows,” says Satish Dondapati, ETF fund manager, Kotak Mutual Fund.

“Global wars and the tariff crisis highlighted the importance of gold as a safe haven, creating strong demand from central banks. Silver benefited from a global demand-supply gap and industrial use,” says Vikash Wadekar, head - passive business, Axis Asset Management Company.

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