Gold ETF Inflows Continue For 10th Consecutive Month As Prices Rally
Investors deployed Rs 1,980 crore in the bullion proxy, lower than the record Rs 3,751 crore in January.
Net inflows into gold exchange-traded funds slowed in February compared to the previous month, but remained healthy.
Investors deployed Rs 1,980 crore in the bullion proxy, lower than the record Rs 3,751 crore in January, according to data released by the Association of Mutual Funds in India on Wednesday.
February was the tenth consecutive month of net inflows into gold ETFs — passive investment instruments that track gold prices.
Net assets under management of gold ETFs stood at a record Rs 55,677 crore last month. It is to be noted that the AUM also reflects the appreciation in prices.
The AUM has jumped 51% year-on-year as investors remained hitched to the proxy and tax-efficient way of investing in gold, without the need of physically storing it.
The high investor interest in gold ETFs comes amid economic uncertainty driven by US President Donald Trump's trade and geopolitical policies and rate cuts by major central banks.
Gold prices have also gained on the back of US dollar weakness last month.
Besides these factors, asset class returns also have a play. While gold is up 13% in the domestic market, equities have taken a beating with the benchmark Nifty 50 sliding over 5% so far this year.
Globally, gold ETFs saw continued inflows during February for the third consecutive month, lifting total AUM and collective holdings by 4.1% and 3.1% respectively. Investors poured $9.4 billion, the strongest since March 2022.
The AUM stood at $306 billion, while holdings rose to 3,353 tonnes, the highest month-end level since July 2023.
Mutual Fund Inflows Drop
Meanwhile, actively managed equity mutual funds recorded Rs 29,303.3 crore inflow during February, lower by 26.1%, compared to the inflow of Rs 39,687 crore recorded in January, as per the monthly AMFI data. Active equity AUM dipped about 7% during the month under review, compared to January.
The industry net inflow of the mutual fund industry was at Rs 40,063.3 crore against an inflow of Rs 1.88 lakh crore the previous month. The net AUM of the industry was at Rs 64.53 lakh crore against Rs 67.3 lakh crore last month.
