Rush for gold funds
Gold ETFs witnessed an inflow of Rs 921 crore in July, a surge of 86 per cent from the preceding month, as new investors rushed to add the precious metal in their portfolios in view of higher prices.
With this, the net inflow in the gold exchange traded fund, or ETF category, has reached to Rs 4,452 crore in the first seven months of the year, data with the Association of Mutual Funds in India (Amfi) showed.
According to the data, a net sum of Rs 921 crore was pumped into gold-linked ETFs last month, higher than the net Rs 494 crore in June.
The inflows meant assets under management (AUM) of gold ETFs climbed 19 per cent to Rs 12,941 crore at the end of July from Rs 10,857 crore in June-end.
Month-wise, investors put in a net Rs 202 crore in January, Rs 1,483 crore in February, but withdrew Rs 195 crore in March on profit-booking.
Inflows resumed in April at Rs 731 crore, followed by Rs 815 crore in May.
“Gold prices continued to scale new highs on the back of weakness in the dollar, tension between the US and China and consistent rise in Covid-19 cases globally, which boosted its safe-haven appeal,” said Himanshu Srivastava, associate director-manager research at Morningstar India.
“With all major economies staring at recession due to the spread of coronavirus pandemic, gold, expectedly, has emerged as one of the best performing asset classes and a preferred investment destination among investors,” he added.
Srivastava further said the surge in coronavirus cases has cast a doubt on the swift recovery hopes and investors continue to hedge their exposure to riskier assets by investing a portion of their assets in gold, as it is seen as a safe haven in times of uncertainty.