Gold exchange traded funds saw net inflows of Rs 815 crore in May as investors preferred safe haven options

Gold exchange traded funds (ETFs) witnessed net inflows of Rs 815 crore in May as investors preferred safe haven options during stock market volatility followed by the coronavirus crisis. As per the latest data available with the Association of Mutual Funds in India (Amfi), a total of Rs 815 crore was pumped into gold-linked ETFs in the month of May, higher than the total Rs 731 crore infused in the last month.

In futures markets, gold prices in India are up around 20 per cent so far this year.

The inflows mean assets under management (AUM) of gold ETFs raised to Rs 10,102 crore at May-end, from Rs 9,198 crore at the end of April.

Considering investor appetite for gold, gold is typically considered a safe-haven asset, in times of economic uncertainty, holdings of the world’s largest gold-backed exchange-traded fund or ETF, SPDR Gold Trust, increased by 0.5per cent to 1,135.05 tonnes on Thursday, its highest in over seven years.

Gold

Jigar Trivedi, the research analyst at Anand Rathi Shares & Stock Brokers on Gold, said “the safe-haven buying into the ETFs has continued to travel up. Hence the sentiment is probably going to be positive on the alpha-beta brass.”

In general, mutual fund houses saw inflows of over Rs 70,800 crore across all segments in May as compared to inflows of Rs 46,000 crore in the month of April.

The Asset Under Management (AUM) of the 44 major industry climbed to Rs 24.55 lakh crore by the top of May from Rs 24 lakh crore at the top of April.

Meanwhile,  Himanshu Srivastava, senior research analyst (manager research), Morningstar Investment Adviser India, said this segment may still gain traction from investors considering the threat posed by the coronavirus pandemic to the worldwide economy and the global markets.

 

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