Gold ETFs Record First Monthly Outflow In A Year
Gold exchange-traded funds lost some sheen in March, as investors pulled money out for the first time since April 2024. The funds recorded a net outflow of Rs 77 crore last month compared to a net inflow of Rs 1,980 crore in February, according to data released by the Association of Mutual Funds in India on Friday.
The pullback paused 10 consecutive months of net inflows into gold ETFs — passive investment instruments that track the price of gold.
Net assets under management of gold ETFs stood at a record Rs 58,888 crore last month, a 53% 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.
On the other hand, global gold ETF inflows rose for a fourth consecutive month in March, with positive demand witnessed across all regions. Inflows totaled $8.6 billion, according to the World Gold Council.
The AUM reached another all-time high of $345 billion, representing an increase of 13% in March. Additionally, collective holdings rose by 92 tonnes to 3,445 tonnes by the end of the month, reaching the highest month-end level since May 2023.
There is no foreseeable scenario where the price of the yellow metal will decline amid the global tariff war, according to WGC Chief Executive Officer David Tait. Every indicator, both logical and instinctive, points towards a rise in gold's value, Tait told NDTV Profit.
On Friday, gold extended gains to a fresh record high of $3,240 per ounce, supported by the US dollar's extended decline to near three-year lows and persistent safe-haven buying.
Mutual Fund Outflows
Meanwhile, actively managed equity mutual funds recorded a Rs 25,082 crore inflow during March, lower by 14.4% compared to the inflow of Rs 29,303.3 crore recorded in February, as per the monthly AMFI data. Active equity AUM rose about 7.5% during the month, compared to the 7% dip in February.
The net outflow of the mutual fund industry was at Rs 1.64 lakh crore, against an inflow of Rs 40,063.3 crore the previous month. The net AUM of the industry was at Rs 65.74 lakh crore, against Rs 64.53 lakh crore last month.
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