InvestorQ : Is it true that gold ETF sales have picked up sharply in India in the last few months?
Neelam Naik made post

Is it true that gold ETF sales have picked up sharply in India in the last few months?

Answer
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Anu Biswas answered.
2 months ago


For the month of July 2020, Gold ETFs witnessed inflows of Rs.921 crore, which is roughly 86% higher than the previous month. This is a continuation of the trend where investors have been globally rushing into safer avenues of investments like gold funds.

As per monthly data pout out by AMFI, the AUM for the gold ETF category in India stood at Rs.12,941 crore. Although the AUM of gold ETFs has grown by 19% on a MOM basis, the total corpus of gold ETFs in India is woefully short of global benchmarks.

Gold ETFs have seen net inflows in all the months of this year, except in March. The gold funds as a whole have managed to collect net Rs.4249 crore since the beginning of this year. This trend is expected to continue, as per expects, due to heightened economic uncertainty.

It needs to be remembered that for most investors, gold is less of an investment and more of protection. In fact, gold functions as a strategic asset in any investor’s portfolio, due to its ability to act as an effective diversifier. This reduces the overall risk for the allocator.

Increasingly, financial planners and portfolio managers are looking to gold as an effective long term allocation asset class and that is positive for gold ETFs. It is expected that the situation should become more favorable for gold ETFs in the coming years.