Gold Exchange Traded Funds Recorded Net Outflow in July

SEATTLE (Scrap Monster): The data by the Association of Mutual Funds in India (AMFI) suggests that gold exchange traded funds (ETFs) logged net outflow of INR 457 crore during the month of July this year. This compared with net inflow of INR 135 crore during the month before that. The allocation of money by investors in other asset classes as part of portfolio rebalancing led to the net outflow.

According to Kavitha Krishnan, Senior Analyst Manager Research at Morningstar India, the outflows were mainly triggered by investor expectations of a possible dip in gold prices on account of a rising interest rate cycle across the globe. The falling rupee too has had its impact on the demand and supply dynamics of the yellow metal. It must be noted that global ETFs too have been witnessing significant outflows on the back of weak gold prices, analysts noted.

The asset under management of gold ETFs has dropped from INR 20,249 crore in June to INR 20,038 crore in July. However, the number of folios recorded slight uptick during the month. During the year-to-date period this fiscal year, gold ETFs have attracted INR 982 crore, AMFI data suggests.