Passive investing in India appears to have crossed a critical threshold, with exchange-traded funds (ETFs) now competing directly with large-cap equities in terms of liquidity and trading intensity. The shift was clearly visible on January 21, when gold and silver ETFs emerged among the most actively traded securities on Indian exchanges by value, overtaking several frontline stocks.
According to exchange data, silver ETFs recorded traded value of ₹4,784 crore, while gold ETFs saw turnover of ₹3,299 crore on the day. In comparison, HDFC Bank, one of India’s most actively traded large-cap stocks, registered a traded value of about ₹3,030 crore, while ICICI Bank stood at around ₹2,945 crore. Market participants see this as a defining moment for India’s ETF ecosystem, reflecting a structural shift in how investors use passive products.
A significant share of this trading activity was driven by the Nippon India BeES ETF suite, which includes gold and silver ETFs that have consistently ranked among the most liquid passive instruments in the domestic market. The development highlights the increasing use of ETFs not just as long-term portfolio allocation tools, but also as vehicles for tactical positioning and efficient price discovery.
India’s ETF market has expanded rapidly over the past few years, supported by rising retail participation, institutional adoption, and growing comfort with low-cost, transparent investment products. Nippon India Mutual Fund, one of the largest players in the segment, currently manages ₹2.26 lakh crore in ETF assets, accounting for a 20.6 per cent share of the ETF market. The fund house also commands a 51.2 per cent share of ETF trading volumes in Q3 FY2026, underlining its dominance in secondary market liquidity. Its ETF products are held by over 1.63 crore investors, spanning both retail and institutional categories.
The surge in ETFs trading volumes comes against the backdrop of heightened global uncertainty, which has renewed investor interest in precious metals as a portfolio hedge. However, analysts note that the scale of ETF participation points to a deeper trend in the mainstreaming of passive investing within India’s capital markets.
This pattern was also evident during Diwali 2025, traditionally a peak period for gold-related investments, when ETFs accounted for approximately 57–58 per cent of total industry trading volumes in the gold and silver ETF segment, according to NSE data. The ability of ETFs to attract such a large share of trading activity during key market periods underscores their growing relevance as liquid and efficient investment instruments.
The emergence of ETFs alongside and in some cases ahead of large-cap stocks in trading rankings signals an evolution in market structure. As passive investing continues to gain traction, ETFs are expected to play a more central role in shaping liquidity, improving market access, and deepening participation across India’s capital markets.
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