After witnessing internet outflows within the months of January and February this 12 months, the Gold ETF class witnessed internet inflows of Rs 205 crore in March. However, the month of April proved to be the defining one because the class acquired internet inflows to the tune of Rs 1100 crore. This was the best month-to-month internet influx into the class after February 2020 when it acquired internet influx of Rs 1,483 crore.
“Continuation of geopolitical tension due to the war between Russia and Ukraine, surge in crude prices and concerns over surge in inflation globally as well as domestically have once again diverted investors’ focus on yellow metal, which draws its appeal as safe-haven during difficult environment and as a hedge against inflation,” stated Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, commenting on AMFI’s month-to-month knowledge for April 2022.
Gold costs additionally came-off their highs and went by way of a downward trajectory in April, which offered traders a superb shopping for alternative. Moreover, uncertainty and challenges confronted by the fairness markets would have additionally prompted traders to diversify their portfolio by including some publicity to gold ETF, which within the present state of affairs seems to be a comparatively enticing funding possibility.
Gold, with its superlative efficiency over the previous few years, has attracted vital investor curiosity. The constant surge of their folio numbers is an affidavit of the identical. During the FY 2021-22, the folio numbers in Gold ETFs surged from 13 lakh in March 2021 to 42 lakh in March 2022, a rise by nearly 223%.
Between March and April, the variety of folios has surged additional by 120,662 folios to 43.62 lakhs, a rise of three%. Since Jan 2020 until April 2022, the Gold ETF class has acquired a internet influx of Rs 12,050 crore. This signifies that gold has made inroads into the investor’s portfolio as a part of their asset allocation requirement like by no means earlier than.
“Gold functions as a strategic asset in an investor’s portfolio, given its ability to act as an effective diversifier, and alleviate losses during tough market conditions and economic downturns. This is where it draws its safe-haven appeal. During the challenging investment environment posed by Covid and economic downturn, gold emerged as one of the better-performing asset classes, thus proving its effectiveness in investors’ portfolio. This aspect has not gone unnoticed by investors,” added Srivastava.
Source: www.financialexpress.com”