Gold ETFs Shattered Three Straight Quarters of Outflows

SEATTLE (Scrap Monster): The most recent data published by the Association of Mutual Funds in India (AMFI) indicates that gold-backed exchange traded funds (ETFs) snapped three consecutive quarters of outflow during the initial quarter of the current fiscal (2023-’24) year.

The gold-backed ETFs registered inflows of INR 298 crore during the April-June quarter of 2023. The folio numbers recorded increase during the quarter, totalling 47.52 lakh in June quarter, upon comparison with 46.06 lakh in the corresponding quarter a year before. The investments are likely to sustain in the upcoming quarters as well. However, upon comparison with the year-ago quarter, the investments were down significantly by almost 80%, AMFI data said.

The gold-linked ETFs had witnessed outflows of INR 1,243 crore in Jan-Mar ’23 quarter, INR 320 crore in Oct-Dec ’22 quarter and INR 165 crore in Jul-Sep ’22 quarter.

The slowdown in inflows to gold ETFs over the past few quarters have been mainly due to shift in investor interest to better-performing asset classes such as equities, fund managers noted. The elevated gold prices also might have prompted investors to shy away from investments, they added.