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HomeBuisnessGold ETFs Continue to Shine; Attract Rs 657 Cr in January ...

Gold ETFs Continue to Shine; Attract Rs 657 Cr in January Pi News

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Gold ETFs witnessed inflows of Rs 2,920 crore in 2023, higher than the inflows of Rs 459 crore seen in 2022.

Gold ETFs witnessed inflows of Rs 2,920 crore in 2023, higher than the inflows of Rs 459 crore seen in 2022.

Gold ETFs, which aim to track the local physical gold price, are passive investment vehicles that are based on the price of gold and invest in gold bullion.

According to Amfi, gold exchange-traded funds (ETFs) attracted Rs 657 crore in January, a seven-fold jump from the previous month.

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Analysts believe the precious metal’s appeal as a safe haven and inflation hedge will continue amid ongoing geo-political tensions and high inflation in the US.

The inflows helped gold funds’ assets under management (AUM) rise by 1.6 percent to Rs 27,778 crore at the end of January, compared to Rs 27,336 crore at the end of December, according to the Association of Mutual Funds in India (Amfi). .

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Net inflows into gold ETFs were sharply higher at Rs 657.4 crore in January from Rs 88.3 crore in the previous month, the data showed. The launch of trading fund Tata Gold Exchange, which generated Rs 6 crore, also helped the growth.

With ongoing geo-political tensions and higher-than-expected US inflation, gold’s appeal as a safe haven and inflation hedge is expected to continue, Morningstar Investment Research India analyst Melvin Santarita said.

“The price of gold rose to a new high in US dollar terms after breaking above US$2,100 per ounce in early December 2023, but has since declined gradually. In rupee terms, gold has done quite well over the past year, but pales in comparison to equities.

“Given this backdrop, flows in the Gold ETF category have been a bit off. Some investors may choose to choose risk in their investment in anticipation of changes in investment rates,” he added.

Gold ETFs witnessed inflows of Rs 2,920 crore in 2023, higher than the inflows of Rs 459 crore seen in 2022.

Gold’s appeal as a safe haven and hedge against inflation has increased significantly in 2023. Rising inflation, subsequent interest rate hikes and geopolitical events fueled demand as investors sought a safe investment option.

Gold has attracted a lot of interest from investors with its superior performance over the past few years and the consistent growth in folio numbers is a testament to its appeal.

During the month, folio numbers in gold ETFs rose to 49.72 lakh in December 2023 from 49.11 lakh in December 2022. This indicates a growing preference among investors for gold-linked funds.

Gold ETFs, which aim to track the local physical gold price, are passive investment vehicles that are based on the price of gold and invest in gold bullion.

Gold ETFs are units representing physical gold, which can be in paper or dematerialized form. One gold ETF unit is equal to 1 gram of gold and is backed by very high purity physical gold. They combine the flexibility of stock investments and the simplicity of gold investments.

(This story is unedited by News18 staff and published from a syndicated news agency feed – PTI)

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