Gold ETF folios surge 164% in 3 years, outpacing equity mutual funds: Study warns against FOMO-driven gold investments
Gold ETFs are emerging as a major investment choice among Indian investors, with their folio count growing significantly faster than that of equity mutual funds over the past three years.
This raises questions about whether investors are increasingly chasing gold returns rather than following a disciplined asset allocation strategy.
According to an analysis by OmniScience Capital, gold ETFs witnessed a 164% growth in folios between September 2023 and September 2026, compared with just 30% growth in large-cap mutual fund folios. Their assets under management (AUM) also surged to nearly half the AUM of large-cap funds.
How much have gold ETF folios grown compared with equity funds?
A folio is an investment account number assigned to an investor by a mutual fund house for a particular scheme. It indicates the number of investment accounts, rather than the number of unique investors, as one investor can hold multiple folios.
OmniScience Capital’s analysis shows that gold ETFs recorded a 2.6-fold increase in folios over three years, significantly outpacing the 1.3-fold growth in large-cap mutual fund folios.
| Category | No. of folios (September 2026) | Average net AUM ( ₹ crore) | Three-year growth in folios |
| Gold ETFs | 1,26,77,259 | 1,88,934 | 164% |
| Large-cap funds | 1,69,60,523 | 4,02,388 | 30% |
| Mid-cap funds | 2,67,68,077 | 5,32,198 | 124% |
| Small-cap funds | 3,03,81,196 | 4,66,852 | 107% |
*Source: OmniScience Capital
The numbers suggest that gold ETFs have attracted significant investor interest. Their folio growth has also exceeded that of mid-cap and small-cap funds, which recorded increases of 124% and 107%, respectively.
Has gold ETF AUM grown faster than that of equity funds?
The rise is also visible in the assets managed by gold ETFs. Their AUM increased from ₹5,667 crore in September 2019 to ₹1.89 lakh crore in September 2026. In comparison, the AUM of all equity mutual funds increased to ₹38.51 lakh crore from ₹7.02 lakh crore during the same period.
| Year | Gold ETF AUM ( ₹ crore) | YoY growth | All equity AUM ( ₹ crore) | YoY growth |
| Sep-19 | 5,667 | — | 7,01,880 | — |
| Sep-20 | 13,622 | 140.4% | 7,67,954 | 9.4% |
| Sep-21 | 16,248 | 19.3% | 12,65,779 | 64.8% |
| Sep-22 | 19,429 | 19.6% | 14,86,235 | 17.4% |
| Sep-23 | 24,011 | 23.6% | 19,08,362 | 28.4% |
| Sep-24 | 38,166 | 59.0% | 30,65,897 | 60.7% |
| Sep-25 | 81,700 | 114.1% | 34,08,340 | 11.2% |
| Sep-26 | 1,88,934 | 131.3% | 38,50,661 | 13.0% |
*Source: OmniScience Capital
The total gold ETF AUM of ₹1.9 lakh crore equals nearly half of the ₹4 lakh crore AUM in large-cap funds. This gold allocation, which is 47% of the large-cap funds’ AUM, appears overstretched, the report noted.
OmniScience Capital believes that gold ETFs have witnessed steep growth in AUM compared with equity mutual funds, even after adjusting for the underlying asset class returns. This indicates that investors taking exposure to gold ETFs are chasing a gold rally in the last 3 years.
Such a sharp increase in allocation raises concerns about investors’ asset allocation decisions.
According to the firm, gold falls under the alternative asset class category where the typical recommended allocation for the overall alternatives is 10-20%, with gold accounting for 5-10%, essentially a hedge against inflation for the liquid portion of the portfolio.
This alternative category also includes private equity, structured debt, SIFs, REITs, and InvITs, among other alternative asset classes.
Why should investors not deviate from the ideal gold allocation?
“We believe this FOMO behaviour would have been similar for any security whose price is rising. This aggressive migration signals a notable departure from structured asset allocation,” said Ashwini Shami, President and Chief Portfolio Manager at OmniScience Capital.
Shami also cautioned investors against assuming that gold price, inflation and interest rates would necessarily rise together over the next few years. He said it was extremely important for investors to recalibrate their asset allocations and rationalise their expectations going forward.
While central bank purchases are expected to support gold demand, selling by other investors seeking higher yields from short- to medium-duration fixed-income securities could balance prices.
The firm expects India’s upcoming wedding and festive seasons to provide temporary support to gold prices. However, global headwinds, including the possibility of higher US interest rates, could limit further gains. It added that investors should account for both physical gold and gold ETF holdings while assessing their overall portfolio allocation.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
About the Author
Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance.
She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram.
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