Glittering again: Investors flock to gold ETFs, shows Amfi data

Exchange-traded funds (ETFs) that invest in gold witnessed the highest inflows in the last five months amid softening in the price of the yellow metal. Industry players say that high valuations in Indian equities and increase in volatility might have led to some investors moving to gold funds.
 
The data from Association of Mutual Funds in India (Amfi) shows that gold ETFs saw net inflows of Rs 446 crore in September. In the current financial year, investors have pumped in Rs 1,735 crore into gold ETFs with highest inflows seen in April at Rs 680 crore. 
 
“In the thick of a volatile market, resorting to a safe instrument can be one of the reasons for this move, with rising gold prices being the other reason drawing attention to the instrument,” said Priti Rathi Gupta, founder, LXME.
 
Investors have continued to invest in gold ETFs even as returns of gold have been negative. The data from IBJA and BS Bureau Research shows that in the last one year, gold has given negative returns of 6.7 per cent. While in September, the gold prices were down by nearly 3 per cent.

 However, in the last few days, gold prices have inched up and in month to date it has gained by 2.5 per cent. Market participants say that with the festive season approaching, the MF industry will continue to see inflows into gold ETFs for the next few months.