Gold ETFs in India Recorded Inflows During FY 20

The huge flow of money into gold ETFs is mainly on account of fears due to coronavirus spreads and its impacts on global economy.

SEATTLE (Scrap Monster): India gold exchange-traded funds (ETFs) posted inflows in FY 20, after six straight years of outflow. The assets under management (AUM) in 14 gold-linked ETFs witnessed substantial surge during the financial year 2019-’20.

The most recent data published by the Association of Mutual Funds in India (Amfi) suggests that gold ETFs recorded inflows of nearly Rs. 1,613 crores in the just concluded financial year. This has boosted the AUM of gold funds by 79% to Rs. 7,949 crore as on 31st March, 2020. It must be noted that the AUMs had totalled only Rs. 4,447 crores at the end of March last year.

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The huge flow of money into gold ETFs is mainly on account of fears due to coronavirus spreads and its impacts on global economy. The huge sell-off in broader markets and sharp fall in international crude oil prices also contributed.

According to Amfi data, the investments into gold ETFs hit the highest level in January this year, with addition of Rs. 202 crore. The investments hit record-high of Rs. 1,483 crore in February. However, gold ETFs witnessed a net outflow of Rs. 195 crore in March.

The ETF monthly commentary by the World Gold Council (WGC) suggests that global gold-backed ETFs added 298 tonnes in the initial quarter of 2020, recording the largest tonnage addition since 2016.

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