Gold ETFs Recorded Inflows After a Period of Six Years

SEATTLE (Scrap Monster): After a gap of six long years, gold-backed Exchange Traded Funds (ETFs) witnessed inflows in 2019. The volatility in equity and debt markets and fears of global slowdown, coupled with escalating geopolitical tensions attracted investment into ETFs during the previous year.

The data published by the Association of Mutual Funds in India (AMFI) indicates that the asset under management (AUM) of gold-based funds surged higher significantly by almost 26% to total INR 5,768 crores at the end of December last year. This compares with INR 4,571 crores as at end-2018.

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As per data, the 14 gold-linked ETFs reported investment of INR 16 crores during the previous year, recording an year of inflow for the first time since 2012, when gold ETFs had witnessed an inflow of INR 1,826 crores. These funds together had recorded outflows of INR 571 crores in 2018.

Ashwani Bhatia, Managing Director and SEO, SBI Mutual Fund said that gold assets are safer compared to other asset classes. According to him, investors are recommended to have gold as an asset class, especially in the form of gold ETF, as integral part of their investment portfolio. The additional investor interest in gold ETFs during 2019 is also attributed to volatility in both the equity and debts markets, along with spiralling gold prices, Bhatia observed.