Gold ETFs log Rs 2,400-cr influx in Sept quarter


New Delhi: Gold exchange-traded funds (ETFs) noticed staggering net inflows of over Rs 2,400 crore within the three months ended September 30, as traders continued to hedge their publicity to riskier assets due to higher economic uncertainty ensuing from COVID-19. In comparability, traders had infused Rs 172 crore on this asset class in July-September 2019, in line with the information obtainable with the Association of Mutual Funds in India (Amfi).

The class has been among the many better-performing ones thus far this yr and obtained a internet influx of Rs 5,957 crore.

As per the information, a internet sum of Rs 2,426 crore was pumped into gold-linked ETFs in three months ended September 30, 2020.

Divam Sharma, co-founder at Green Portfolio, stated returns generated by gold ETF’s over the past one yr have elevated variety of traders shopping for the asset.

Gold investment picked up resulting from larger financial uncertainty ensuing from COVID-19,” stated Harsh Jain, co-founder of Groww.

Investors anticipated to see very risky markets world over, and in such instances, funding in very protected property like gold all the time shoots up. Even although now, the markets have principally recovered and reached the pre-pandemic ranges, uncertainty stays excessive going ahead, Jain stated.

“We have seen a re-emergence of higher COVID-19 cases in many parts of Europe and USA. Many countries are imposing lockdowns in a staged manner again. This is leading to a higher economic uncertainty again. In such conditions, higher investment in gold assets is expected,” he added.

Gopal Kavalireddi, head of analysis at FYERS, stated the US presidential elections consequence may have a bearing on the efficiency of equities over the subsequent couple of months. This might immediate traders to reverse their selection and hedge their investments with gold ETFs.

Month-wise, traders put in a internet Rs 202 crore in January, Rs 1,483 crore in February, however withdrew Rs 195 crore in March on profit-booking.

Inflows resumed in April at Rs 731 crore, adopted by Rs 815 crore in May, Rs 494 crore in June, Rs 921 crore in July, Rs 908 crore in August and Rs 597 crore in September.

Despite the slight fall in inflows of gold ETF in September, Sharma stated the outlook for the remaining a part of the yr seems optimistic.

“With the COVID-19 cases rebounding globally; continued liquidity and lower interest rates from central banks globally; and markets nearing the pre-COVID-19 levels, investors will continue to invest surplus liquidity in safer assets like gold,” he added.

He, additional, stated traders seeking to spend money on gold can select between gold ETF, gold mutual funds, sovereign gold bonds, and bodily gold.

The inflows led property below administration (AUM) of gold funds surging to Rs 13,590 crore on the finish of September 2020, from Rs 5,613 crore on the finish of September 2019.

Gold-backed ETFs are passive funding devices which might be based mostly on worth actions and investments in bodily gold.

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