New Delhi: After witnessing outflow of funds in the last three months, gold exchange-traded funds (ETF) attracted a net inflow of Rs 165 crore in February, mainly due to a marginal correction in local yellow metal prices.
This was in comparison to net outflows of Rs 199 crore registered in January, Rs 273 crore in December and Rs 195 crore in November.
prior to that, gold etf attracted Rs 147 crore in October, from the data Association of Mutual Funds in India (amphi) showed.
Senior analyst Kavita Krishnan said, “Despite most markets witnessing outflows, February saw inflows into gold ETFs in India. This was largely supported by a small correction in local gold prices. The demand for ETFs was massive.” But it arises when prices improve.” said Manager Research, Morningstar India.
He said that the demand for physical gold in India is largely driven by festival and wedding season.
Also, the segment witnessed an increase in the number of folios from about 20,000 to 46.94 lakh during the period under review.
Nirav Karkera, head of research at Fisdom, said gold as an asset class is known to effectively align returns with inflation. That is what makes it an important asset class today, especially for long-term retail investors.
“While broad equities appear volatile and attractive fixed income exposure remains elusive, many investors and asset allocators have begun to re-look at gold from a strategic allocation perspective,” he added.
Despite the inflows, the category dropped its net assets under management (AUM) to Rs 21,400 crore at the end of February from Rs 21,836 crore at the end of January.
Overall in 2022, inflows into gold ETFs were at Rs 459 crore, down 90 per cent from Rs 4,814 crore registered in 2021, due to rising prices of the yellow metal and rising interest rate structure as well as inflationary pressures.
Krishnan of Morningstar India said that despite being a huge market, when it comes to physical gold, gold ETFs still constitute a small percentage of the overall Indian market.
Gold ETFs, which aim to track the price of domestic physical gold, are passive investment instruments that are based on gold prices and invest in gold bullion.
In short, Gold ETFs are units representing physical gold, which can be in paper or dematerialized form. One gold ETF unit is equivalent to 1 gram of gold and is backed by physical gold of very high purity. They combine the flexibility of stock investment and the simplicity of gold investment.
This was in comparison to net outflows of Rs 199 crore registered in January, Rs 273 crore in December and Rs 195 crore in November.
prior to that, gold etf attracted Rs 147 crore in October, from the data Association of Mutual Funds in India (amphi) showed.
Senior analyst Kavita Krishnan said, “Despite most markets witnessing outflows, February saw inflows into gold ETFs in India. This was largely supported by a small correction in local gold prices. The demand for ETFs was massive.” But it arises when prices improve.” said Manager Research, Morningstar India.
He said that the demand for physical gold in India is largely driven by festival and wedding season.
Also, the segment witnessed an increase in the number of folios from about 20,000 to 46.94 lakh during the period under review.
Nirav Karkera, head of research at Fisdom, said gold as an asset class is known to effectively align returns with inflation. That is what makes it an important asset class today, especially for long-term retail investors.
“While broad equities appear volatile and attractive fixed income exposure remains elusive, many investors and asset allocators have begun to re-look at gold from a strategic allocation perspective,” he added.
Despite the inflows, the category dropped its net assets under management (AUM) to Rs 21,400 crore at the end of February from Rs 21,836 crore at the end of January.
Overall in 2022, inflows into gold ETFs were at Rs 459 crore, down 90 per cent from Rs 4,814 crore registered in 2021, due to rising prices of the yellow metal and rising interest rate structure as well as inflationary pressures.
Krishnan of Morningstar India said that despite being a huge market, when it comes to physical gold, gold ETFs still constitute a small percentage of the overall Indian market.
Gold ETFs, which aim to track the price of domestic physical gold, are passive investment instruments that are based on gold prices and invest in gold bullion.
In short, Gold ETFs are units representing physical gold, which can be in paper or dematerialized form. One gold ETF unit is equivalent to 1 gram of gold and is backed by physical gold of very high purity. They combine the flexibility of stock investment and the simplicity of gold investment.
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