- Indian retail investors showed strong interest in gold ETFs in January with record inflows of Rs 24,040 crore
- Gold ETFs outperformed domestic equities despite a brief price pullback in January
- Actively managed equity mutual funds saw a 14% sequential decline in inflows to Rs 24,029 crore
Indian retail investors remained bullish on gold exchange traded funds in January as the yellow metal continued to outperform domestic equities despite a brief pullback in prices. Net inflows more that doubled to a record Rs 24,040 crore, according to data released by the Association of Mutual Funds in India on Tuesday. The previous month witnessed a net inflow of Rs 11,647 crore.
Notably, actively managed equity mutual funds recorded a Rs 24,029-crore inflow last month, lower by 14% sequentially. Inflows across the board saw a slight decline as compared to December, with flexicap funds leading the inflow.
Bullion ETFs are passive investment instruments that track the price of gold. They are a proxy and tax-efficient way of investing in the precious metal, without the need to physically store it.
The net assets under management of gold ETFs as of Jan. 31 stood at Rs 1.84 lakh crore. It is to be noted that the AUM also reflects the appreciation in bullion prices.
Bullion surged 24% in the local market last month. The equity benchmark Nifty 50 index fell 3.1% and Sensex dipped 3.5%.
Globally, gold ETFs attracted $19 billion – the strongest month on record, according to the World Gold Council. January's net buying, combined with a 14% surge in the gold price, pushed global gold ETF AUM to a new record of $669 billion, a 20% sequential increase. Collective global holdings rose by 120 tonnes to 4,145 tonnes, also reaching a new all‑time high, the WGC said.
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