Surge in Passive Investing: Index & Metal ETFs Gain — What It Means for Investors and Unlisted Shares Traders

TL;DR

• Passive funds drew ₹11,437 crore in August 2025, the 58th straight month of positive flows; passive AUM stood at ~₹12.5 lakh crore.
• Investors favoured domestic equity index ETFs/funds and gold & silver ETFs, while debt ETFs saw net outflows.
• Gold ETF inflows ~₹2,190 crore; Silver ETF inflows ~₹1,759 crore in August.
• Surveys show 68% of Indian retail investors now own at least one passive fund—passive is mainstream.
• On our platform, you can buy/sell unlisted shares via a verified vendor network with KYC, escrow-backed settlement, and transparent quotes—built to complement your low-cost passive core.

The August 2025 Snapshot: Where Money Went

The Association of Mutual Funds in India (AMFI) reported ₹11,437 crore of net inflows into passive funds in August 2025, with passive AUM at ~₹12.50 lakh crore—marking the 58th consecutive month of positive flows.

Within passive, the leadership rotated toward index & metal trackers:

• Gold ETFs: ~₹2,189.5 crore inflows (benefitting from record bullion prices).
• Silver ETFs: ~₹1,759 crore inflows.
• “Other ETFs” (largely equity ETFs): ~₹7,244 crore inflows.
• Index funds (domestic): ~₹1,503 crore inflows (media-reported estimate).

Multiple outlets highlighted that domestic equity index ETFs and index funds led the pack, while debt ETFs saw outflows in August.

Note on sources: AMFI’s monthly note provides the headline passive total. Category-level breakups (gold, silver, other ETFs, index funds) come from industry news/desks summarizing AMFI’s sub-classification file for August 2025. Figures can vary slightly across outlets depending on rounding or whether mark-to-market effects are discussed alongside net flows.

Quick reference table (August 2025)

Category (Passive)	Net Flow (₹ crore)	Source
Total Passive (all)	11,437	AMFI monthly note
Other ETFs (largely equity ETFs)	7,244	Upstox (AMFI data recap)
Gold ETFs	2,190	Upstox recap; Angel One
Silver ETFs	1,759	Moneycontrol silver ETF update
Index Funds (domestic)	1,503	Moneycontrol survey wrap (AMFI data points)
Debt ETFs	Net outflows	IIFL blog (AMFI context)

Why Passive Keeps Winning in India

1. Costs & simplicity: Index funds/ETFs deliver market returns at low expense, a compelling proposition, especially when alpha is scarce.
2. Trust & adoption: 68% of Indian retail investors now own at least one passive fund, per Motilal Oswal Mutual Fund’s 2025 Passive Survey—an unmistakable behavioral shift.
3. Macro jitters: Volatility and global uncertainties increase the appeal of rule-based exposure and precious metals as hedges (mirrored in gold/silver ETF demand).
4. Broadening product shelf: The rise in domestic equity index ETFs/funds gives investors granular, low-friction access to large-cap, factor, and thematic indices.

But Debt ETFs? Why the Outflows

August saw net outflows from debt-oriented schemes, and desk coverage highlighted debt ETFs also under pressure, impacted by seasonal liquidity (advance tax) and cash management shifts. While precise breakdown by debt ETF subtype varies by source, the direction was negative.

What This Means for Your Portfolio

• Core-satellite structure: A passive core (Nifty/Broad-market index funds or ETFs + gold/silver allocation) can anchor costs and volatility. Metals help during market drawdowns; equity index exposure captures long-term growth.
• Tactical tilts: Use satellites (smart beta, sector, thematic ETFs) for targeted bets rather than over-concentrating in mid/small caps during frothy phases.
• Liquidity management: If you rely on debt ETFs for parking cash, pay attention to calendar effects and policy signals that can whipsaw flows.

This is educational information, not investment advice. Always evaluate your goals, risk tolerance, and tax position.

Where Unlisted Shares Fit In (and how our vendor system helps)

Passive ETFs are excellent for low-cost core exposure, but they rarely give access to emerging companies before listing. That’s where unlisted shares come in—offering:

• Early exposure to potential leaders before IPOs
• Diversification beyond listed indices
• Event-driven opportunities (pre-IPO price discovery, corporate actions, demergers)

However, unlisted shares require a stronger process: discovery, diligence, pricing, documentation, counterparty assurance, and settlement discipline.

Our solution for investors & vendors (built for trust and speed)

On our platform, we run a structured, compliance-first marketplace for unlisted shares, built around a verified vendor ecosystem:

1. Verified Vendor Network
• Multi-step onboarding (KYC/KYB, bank verification, GST & PAN checks).
• Performance scorecards (fill rate, pricing accuracy, TAT, dispute history).
• Tiered limits and access levels.
2. Quote & Deal Engine
• RFQ (request-for-quote) flow for specific counters (e.g., pre-IPO tech, NBFCs, consumer brands).
• Live two-way quotes where liquidity allows.
• Lot-size & min-price guardrails to reduce slippage.
3. Escrow-Backed Settlement
• Funds and shares escrow via banking partners to mitigate principal risk.
• Standardized SLAs: typically T+1/T+2 settlement windows, with real-time status tracking.
• Digital contracts and auto-generated invoices/contract notes.
4. Compliance & Documentation
• End-to-end KYC, AML screening, and FATCA/UBO as applicable.
• Audit trails and exportable deal reports for your records.
5. Price Discovery & Research
• Access to indicative fair value ranges, last dealt prints, and corporate action timelines (subject to availability).
• Alerts for major events (board actions, filings, IPO buzz) to aid timing.
6. Vendor Tools
• Inventory dashboard: manage offers/bids, track fills, download MIS.
• API/CSV ingestion for bulk listings, plus webhooks for status events.
• Analytics: quote-to-fill ratio, average spread, and buyer repeat-rate.

Together, these features help reduce friction and improve fill confidence in a segment that’s historically opaque—so investors get transparent access and vendors get faster turns with lower operational overhead.

Passive + Unlisted: A Practical Framework

Think of unlisted shares as a complement to a passive core:

• Example mix (for illustration only):
• 60–70% core passive equity (broad index ETFs/funds)
• 10–15% gold/silver ETFs (macro hedge)
• 10–20% active ideas (includes unlisted shares via our marketplace)
• Balance in high-quality debt (as per liquidity needs; be mindful of seasonal flow patterns)
• Risk control ideas:
• Cap single-unlisted exposure (e.g., ≤2–3% of portfolio).
• Use staggered entries around known corporate timelines.
• Maintain process checklists: valuation notes, counterparties, transfer timelines, escrow confirmations.

Reminder: The above is not advice; allocations depend on your goals, horizon, and risk appetite.

How to Trade Unlisted Shares on Our Platform (Step-by-step)

1. Create your account
• Complete KYC and set up your funding method.
2. Explore live counters
• Browse available unlisted names, check indicative prices, minimum lot sizes, and recent deals.
3. Request quotes or place an order
• Use RFQ to get multiple competitive quotes from our verified vendors.
• Compare net price, estimated TAT, and vendor reliability score.
4. Lock the deal via escrow
• Funds are secured in escrow; vendors initiate transfer.
5. Track & settle
• Real-time status; upon share credit confirmation, escrow releases to vendor.
6. Get documentation
• Auto-generated invoice/contract note, and MIS for your records.

For Vendors: Grow with Us

• Onboard with KYC/KYB and start listing inventory.
• Use our dashboard/API to manage offers, respond to RFQs, and track performance.
• Earn higher visibility via performance-based tiers and featured listings.
• Escrow-backed deals reduce disputes; analytics help price better and move inventory faster.

Market Context: Beyond August’s Headlines

• Passive AUM has multiplied ~6.4x since 2019 to ~₹12.2–12.5 lakh crore (Aug 2025), underscoring structural adoption.
• Equity inflows cooled in August vs July but remained strong at ₹33,430 crore; SIP contributions steady at ₹28,265 crore.
• Gold & silver ETFs continue to be important diversifiers amid macro uncertainty and commodity strength.

FAQs (Investor Education)

Q1) What’s the difference between an index fund and an ETF?
Both track an index. Index funds are mutual funds (you transact at end-of-day NAV), while ETFs trade intraday on exchanges at market prices. Costs are usually low for both; ETFs require a demat/trading account.

Q2) Why did debt ETFs see outflows when gold/silver ETFs saw inflows?
Flows reflect cash management cycles (e.g., advance tax) and rate expectations. August saw debt-oriented outflows overall, while precious metals benefited from hedging demand and price momentum.

Q3) Are unlisted shares risky?
They carry liquidity, price discovery, and corporate event risks. That’s why we built KYC, escrow, and vendor verification into our marketplace—to reduce operational and counterparty risks while improving transparency.

Q4) How are gold/silver ETFs taxed?
Tax treatment can depend on holding period and local rules; consult a tax professional for specifics. As a broad principle, ETFs are securities and may have capital gains implications based on duration and your tax bracket.

Q5) Can passive funds replace active management completely?
Not necessarily. Many investors use a passive core for broad exposure and active satellites (including unlisted shares) for targeted opportunities.

Final Word

Passive investing’s momentum is structural—and August 2025’s numbers reinforce it. Index and metal ETFs continue to pull steady money thanks to low costs, simplicity, and macro hedging. For investors who want beyond-index opportunities, our unlisted shares marketplace with a verified vendor network, escrow-backed settlement, and transparent pricing provides a disciplined, process-driven way to access pre-IPO names.