InvestorQ : How were the flows into gold ETFs during the last financial year?
Rutuja Nigam made post

How were the flows into gold ETFs during the last financial year?

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3 months ago
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The fiscal year FY21 saw record inflows of Rs.6,918 crore into gold ETFs. This is the highest ever inflow into gold funds in a single year and more than 4 times the inflow of Rs.1,613 crore in FY20. Gold funds normally find favour with investors when there is a rally in gold prices and when the level of asset class uncertainty is too high. However, post-August 2020, US bond yields hardened which dampened gold demand and led to gold falling 21%.

However, in the last few months, there are expectations that the second wave of covid infections could derail economic recovery and support gold prices going forward. In fact, the gold holdings of gold-backed ETFs and similar index products had touched a record 3,890 tons by Sep-20. However, the much bigger trend is that investor are increasingly looking at gold as a hedging asset class (10-15%) rather than a return asset class like equity.

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