INSUBCONTINENT EXCLUSIVE:
New Delhi: Gold saving funds and gold exchange traded funds (ETFs) witnessed net inflows of Rs 864 crore in April amid unsure economic
environment in the wake of the 2nd wave of COVID-19
The positive inflow is anticipated to continue in the financial year 2021-22 as the precious metal remains an under allocated property in
financier portfolios in these unpredictable times, Chirag Mehta, Senior fund manager- Alternative Investments at Quantum Mutual Fund, stated
Gold conserving funds and gold ETFs have actually seen net inflow to the tune of Rs 184 crore and Rs 680 crore, respectively in the month of
April, according to information provided by Morningstar India.This comes following net inflow of over Rs 3,200 crore in gold funds in the
entire 2020-21, while the same for gold ETFs was more than Rs 6,900 crore based on the information
The sharp and intense rise in coronavirus cases this year has fanned hopes that, as an asset class, gold might continue to carry out well in
This has kept investors interest intact in the property class, Himanshu Srivastava, Associate Director, Morningstar India
Quantum Mutual Fund's Mehta stated that the failure of investors to purchase or liquidate physical gold due to the COVID-19 social
restrictions, however uncomfortable in the short term, ended up being a blessing in disguise.It seems like numerous investors were lastly
forced to acknowledge the downsides of physical gold and give up their inefficient preference for holding it, he said.Further, they selected
to optimise their gold holdings by switching to the more effective gold ETFs or gold conserving funds which let them being in the security
and convenience of their house and enable them to buy and sell gold as and when they desire, he included
Moreover, these instruments have actually provided 13-14 percent annualised CAGR return in the last three years, more than 8 per cent in
past five years.Morningstar India's Srivastava said that the financial investment environment over the last few years have been extremely
conducive for gold as a property class
Danger of a financial slump and tough market environment offered gold enough factor to open its true capacity
It did so and delivered remarkable performance because 2019, subsequently assisting gold ETFs and gold funds to clock outstanding returns
over three- and five-year period, he included
Gold saving fund is a mutual fund that purchase gold ETFs and such fund do not directly invest in physical but indirectly through gold ETFs
A financier can invest in gold saving fund through systematic investment strategy (SIP)
On the other hand, gold ETFs are essentially exchange-traded funds that invest in gold
They are traded on the stock market and make direct financial investments in gold.Ashraf Rizvi, creator and CEO, Digital Swiss Gold - &
Gilded, said that need for digital gold that allow access to the yellow metal with ease of usage would continue in the present financial
Digital items will continue to grow and crowd out demand for physical gold bars/coins and jewellery as they make the buying and offering
process easier, more secure, more efficient and less pricey, he said.Going forward, Morningstar India's Srivastava said gold may continue
to carry out well under the dominating uncertain environment subsequently, gold saving funds and gold ETFs may continue to see traction from
financiers if this scenario persists.According to him, gold functions as a strategic property in a financier's portfolio, given its
capability to function as an effective diversifier and alleviate losses throughout hard market conditions and financial recessions
The 2nd wave of coronavirus pandemic and the resulting limitations are taking a toll on the fragile financial healing, which could activate
pullbacks in danger properties like equities
Gold might take advantage of the resulting danger hostility, similar to it did last year, Rizvi stated.
