Gold topples the returns of all other equity funds over past one week

With the yellow metal breeching the coveted Rs 32,000 per 10-gram mark for the very first time in the history, Gold Exchange Traded Funds (ETFs) were the top gainers in all mutual fund categories, having clocked in 3.6% returns over the past one week. Given the current spike in the prices of this precious metal, Gold outpaced its closest competitor - in terms of returns - FMCG funds by huge margin.

Having witnessed stupendous rallies over the past five years now, the average net gains by the FMCG category of funds was quite muted at -0.65% for the week that passed by, raising questions once again on the sustainability of the rally and the valuations that this sector is currently commanding.

The only other sector that could come closest to the returns generated by the gold funds in the past week is Technology. The average returns by the category of Technology funds was about 2%, much lower than that generated by gold ETFs.

Now with Gold expected to breech the Rs 35,000 per 10 gram mark by the end of the current calendar year, one can expect the volumes and the assets managed by Gold ETFs to zoom in the coming few days. But having said that, one needs to be cautious of the fact that any revival in the equity markets can dampen the racing pace of the yellow metal.