Gold funds: Worst performer from 1-year perspective

Recent crack in yellow metal prices snatches away the glitter

Gold funds, which enjoyed top positions in terms of return a few years back, are now the worst performer from a one year perspective. Thanks to the last few days decline in the yellow precious metal prices - the underlying asset for gold funds, that 1-year return from gold funds stand deep in the negative territory at 10.13%.

As per the data available from fund tracker Value Research Online, as on 16th April, gold related funds were at the bottom-most position. With over 10% decline in value, it precisely means if an investor had a holding of Rs 100 a year before in gold funds, the value of the same currently stands at Rs 89.87.

With gold prices hovering around Rs 29,000-30,000 per 10 gram for long in last one year, inflows in the Gold Exchange Traded Funds (ETFs) had been steadily declining. In March, first time in several months, the fund category witnessed a relatively higher net outflow at Rs 87 crore.

What is noticeable is the fact during FY13, the overall net inflows in gold funds had substantially declined to Rs 1,414 crore against Rs 3,646 crore in the previous financial year - a drop of over 60%.

Currently, two sectoral equity funds are top gainers in terms of returns. Equity FMCG funds are currently providing returns of 22.19% while returns from equity pharma funds stand at 18.67%.