Gold ETFs attract Rs 303 crore in October on festive season demand: AMFI

Gold exchange-traded funds (ETFs) continue to attract investor attention as they garnered net assets worth Rs 303 crore in October 2021 due to festive season demand. This was, however, lower than the net inflow of Rs 446 crore seen in September. Before this, the segment saw a net inflow of Rs 24 crore in the previous month, data with Association of Mutual Funds in India (AMFI) showed.

The festivities kept the asset class in demand. Gold sale level this Dhanteras at 50 tonnes was almost 20 tonnes more than the 2019 Dhanteras. Investors might have chosen to buy physical gold last month, given October is a festive month.

The lower quantum of net inflow in October compared to the previous month could be attributed to the surge in gold prices in October that could have held investors back from allocating higher amounts in Gold ETFs. Another factor for lower inflow could be the focus of investors on equity markets, which have been trading at all-time high levels.

With this, the Gold ETF category has received a net inflow of Rs 3,818 crore so far this year. The segment witnessed just one month of net outflow, which was in July 2021 of around Rs 61.5 crore.

Investments into ETFs that track the yellow metal have been witnessing a steady uptick since August 2019. However, the asset class witnessed net outflows of Rs 141 crore in November 2020, Rs 195 crore in February 2020 and Rs 61.5 crore in July 2021. During the challenging investment environment in the recent past, gold has emerged as one of the better performing asset classes, thus proving its effectiveness in investors’ portfolio. The assets under management (AUM) of gold ETFs surged to Rs 17,320 crore at the end of October from Rs 16,337 crore at September-end.

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