Gold exchange-traded funds regained investor interest in May after two months of net withdrawals. The funds recorded a net inflow of Rs 292 crore last month compared to a net outflow of nearly Rs 6 crore in April, according to data released by the Association of Mutual Funds in India on Tuesday.
Bullion ETFs are passive investment instruments that track the price of gold. Investors had pulled money out of gold ETFs in March and April to book profits amid a surge in prices.
Net assets under management of gold ETFs stood at a record Rs 62,453 crore last month, a 51% year-on-year increase. It is to be noted that the AUM also reflects the appreciation in bullion prices.
Gold ETFs are a proxy and tax-efficient way of investing in the precious metal, without the need to physically store it. There are over 20 bullion ETFs in India, with the largest being Nippon India ETF Gold BeES.
Meanwhile, gold ETFs globally lost $1.8 billion in May, snapping a five-month inflow streak, as per the World Gold Council.
The first monthly outflow since last November and a mild fall in the gold price saw gold ETFs' AUM fall 1% to $374 billion and collective holdings down 19 tonnes to 3,541 tonnes.
Despite May’s loss, global gold ETF flows have remained positive so far in 2025, at $30 billion.
"All regions saw outflows in May except Europe. North America took the largest hit, and Asia reversed the strong momentum it experienced in April. Europe registered mild inflows, while funds in other regions experienced a small loss for the first time in six months," the WGC said.
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