Gold ETFs log Rs 61-cr outflow in July as investors prefer equity, debt funds
Gold ETFs are basically exchange-traded funds that invest in gold. They are traded on the stock market and make direct investments in gold
After seven straight months of net inflows, gold exchange traded funds witnessed a pullout of over Rs 61 crore in July as investors diverted their money to equity and debt funds that generated attractive returns.
Despite the negative flows in the category, the number of folios went up to 19.13 lakh in July from 18.32 lakh in the preceding month, data with Association of Mutual Funds in India (Amfi) showed. Source: Reuters
About Gold ETF
Investments in Gold ETF
Barring February 2020, November 2020 and July 2021, investments into ETFs that track the yellow metal have been witnessing a steady uptick since August 2019. The gold ETFs category, which has seen continuous inflows since December 2020, witnessed an outflow of Rs 61.5 crore in July this year.This was starkly different as compared to the inflows of Rs 360 crore in June and Rs 288 crore in May. Source: Reuters
Gold ETF AUM
What Expert Says
Priti Rathi Gupta, Founder, LXME attributed the latest outflow from gold ETFs to two factors -- gold prices at an all-time-high for a while, creating anticipation amongst investor for a price plunge and investors tending to divert their investments into these instruments due to attractive returns fetched by equity and debt funds. Source: Reuters
Equity Mutual Funds
Equity mutual funds clocked a staggering net investment of Rs 22,583 crore and debt funds attracted a net sum of Rs 73,964 crore last month.
"The positive uptrend across the equity markets and the positive investor sentiment towards equity led to an increased inflow into the segment. While equity funds witnessed the highest level of inflows on a historical basis, gold stagnated as investors preferred equity over gold," Kavitha Krishnan, Senior Analyst Manager Research, Morningstar India, said. Source: Reuters