Gold ETFs: Investor wealth hits record
Rising gold prices and continuing investment flow in yellow metal has pushed the size of assets held through gold exchange traded funds (ETFs) to an all-time high of Rs 11,198 crore.
The surge in asset size of gold funds has come at a time when the government is contemplating steps to encourage large flow of household savings into equity, mutual funds and other financial instruments, rather than to idle assets like gold.
According to data compiled by mutual fund industry body AMFI, the assets under management of gold ETFs crossed the Rs 11,000 crore mark in September from Rs 10,701 crore in August.
In June, investor wealth in gold ETFs surpassed the psychological mark of Rs 10,000 crore; it was just above Rs 5,000 crore level till a few months ago in May 2011.
There are as many as 25 different gold ETF schemes across 14 different fund houses at present. These products, which track the metal's prices, provide an opportunity to investors to accumulate gold over a given period of time since they can be purchased in small quantities.
In the last 3 months, inflows worth Rs 500 crore have come into gold ETFs. In 2011-12, over Rs 3,600 crore was pumped while inflows of Rs 2,250 crore came in 2010-11.
Industry experts said benefits such as no risk of theft and zero storage cost compared to physical gold, have sustained this interest among investors since the first gold ETF was launched in February, 2007.
Gold prices have also more than tripled from Rs 10,000 levels
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