Investors don't take a shine to gold exchange-traded funds, shows data

One-year returns, however, better than most equity, debt funds

Gold exchange-traded funds (ETFs) continue to be off investor radar as net inflows came in at a paltry Rs 147 crore in October. Since the start of calendar year 2022 (CY22), monthly net inflows into gold ETFs have either remained low (in the range of Rs 100-350 crore) or in negative territory.

Net inflows were on the higher side only once in CY22, when the figure touched Rs 1,100 crore in April, reveals data from the Association of Mutual Funds in India.

Gold has not done well as an asset class in the past year.

According to Value Research data, gold ETFs have delivered around 5.5 per cent returns in the one-year period ended November 11. However, their performance is still better than a majority of equity and debt funds that have struggled due to high inflation, rising interest rates, and geopolitical factors.

Poor performance by the yellow metal has not affected the demand for physical gold.

According to the Gold Demand Trends Q3 2022 report by the World Gold Council (WGC), India’s gold demand reached pre-pandemic levels during the July-September period, with 14 per cent growth.

India’s total demand during the quarter was 191.7 tonnes, mainly driven by strong consumer interest, observes the WGC report.