The emerging equity market has slowed down due to the high volatility that has been observed in the market in recent times which has contributed to rise in interest in gold ETF’s. It has been observed that there is an infusion of Rs 20 cr being poured in 14 gold-linked ETFs in the month of October as per the latest data available with Association of Mutual Funds in India (Amfi). This was mainly because of the number of festivals that took place in the month of October. This is first such big inflow into Gold ETFs in over 3 and a half years.
The first inflow of Gold ETFs had seen an infusion of Rs 5 crore since May 2013 where the outflow has reached to Rs 519 Cr. in first seven months (April-October) of the ongoing fiscal year, 2016-17. The study shows that the investors are most likely increasingly investing their money in gold ETFs.
For those who are not aware of gold ETFs, it becomes necessary to understand the benefits of gold ETF’s over pure gold. It is to be noted that gold often tends to perform inversely compare to equities in times of risk-on and risk-offs.
It is also advisable to invest in Gold ETF’s which provide the benefits of rupee-cost averaging, compounding effect and such funds also offer you the SIP mode of investing.
Certain advantage of Gold ETF’s are:
• No premium making charges
• No worries of theft
• Easy to buy & sell