As gold and silver hit record highs this Diwali, experts urge caution. While gold remains the preferred hedge against volatility, silver offers better value and industrial demand potential. Investors should stick to strategic asset allocation and use ETFs or mutual fund FoFs for exposure.

Silver ETFs in 2025 are seeing unprecedented inflows, tripling gold ETF investments as domestic prices surge 53%. Record festive buying, global supply constraints, and strong returns have fueled demand, prompting temporary subscription halts and highlighting silver’s growing role in long-term portfolio diversification.

Multi-asset allocation mutual funds saw a significant 41% surge in September inflows, reaching Rs 4,982 crore. This rise is attributed to heightened market volatility and investor caution towards equities, with gold and silver performance also playing a role. Experts offer differing views on the long-term viability of these funds for diversification.

Mutual funds reduced cash reserves slightly in September. Key banks like Kotak and ICICI saw additions. Investors bought into HDFC Bank and Tata Steel in large caps. Mid-cap funds favored Hero MotoCorp and Indus Towers. Small-cap additions included Kingfa Science and HealthGlobal. Reliance Industries and TCS were consistently added for the third month.

Sectoral and thematic mutual fund inflows tumbled 69% in September, driven by profit-booking and redemptions. Experts advise long-term investors to stay patient, use SIPs, and maintain diversified exposure, while limiting any single sector allocation to 5–10% amid cyclical and concentrated risks.

Mutual funds have increased their cash allocation by Rs 1,139 crore on monthly basis to Rs 1.99 lakh crore in September compared to Rs 1.98 lakh crore in August. The cash allocation as a percentage of total AUM was recorded at Rs 4.92% in September compared to 4.99% in August. The equity AUM was Rs 40.43 lakh crore in the said time period.

HDFC Defence Fund boosted its holdings in Mazagon Dock and five other defence-related stocks in September, while also introducing Eicher Motors as a new addition. The fund significantly increased its stake in Bharat Forge and reduced exposure in several other companies, including a complete exit from Larsen & Toubro.