Gold ETFs see Rs 800 cr outflow in FY16

Investors continued to remain bearish on gold exchange-traded funds (ETFs) as they pulled out around Rs 800 crore from the instrument during the first 11 months of the current fiscal.

As things stand now, FY16 will mark the third consecutive financial year of outflow from gold ETFs. The pace of outflow, however, slowed down in 2015-16 as against the preceding two years on account of sluggish equity market, experts said.

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Gold ETFs witnessed a net outflow of Rs 798 crore in the first 11 months (April-February) of the ongoing fiscal compared to an outflow of Rs 1,364 crore during the same period of 2014-15 fiscal.

These funds witnessed outflow of Rs 1,475 crore in entire 2014-15 and a withdrawal of Rs 2,293 crore in 2013-14.

However, the asset base of gold funds marginally increased to Rs 6,672 crore in February 2016 from Rs 6,665 crore at the end of March 2015.

The mutual fund sector has 14 gold-based schemes, which have been in the market since 2006-07.

The demand for gold ETFs has been steadily falling in the past few years. These products have seen outflow as gold prices are correcting and equities have given good returns to investors.

Retail investors have been putting in more money into equity and debt mutual funds during April-February. Equity and equity-linked saving schemes saw an infusion of Rs 75,394 crore and debt funds attracted about Rs 20,000 crore.

Overall, mutual fund schemes have witnessed an inflow of Rs 2.07 lakh crore during the period under review.