Gold ETFs witness 570% surge in inflows in June, silver ETFs follow with 300% jump

Gold ETF inflows surged more than 570% month-on-month in June while silver ETFs followed suit with nearly 300% M-o-M jump in the same period, according to the latest data by Association of Mutual Funds in India (AMFI).

The monthly data showed that gold ETFs received an inflow of Rs 3,443 crore in June against an outflow of Rs 725 crore in the previous month, which was the first outflow from the category in the last one year. On a monthly basis, gold ETFs saw a jump of 575%.

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Silver ETFs received an inflow of Rs 4,286 crore in June after seeing an outflow for four consecutive months. In the last four months, silver ETFs saw a total outflow of Rs 3,770 crore. On a monthly basis, silver ETFs saw a jump of 300%.

Nitin Agrawal, CEO, Mutual Funds, InCred Money said that Gold ETFs saw a meaningful reversal after significant outflows the category attracted during the last months, clearly making it visible that the structural case of gold allocation as an overall diversification is still intact

Performance of silver and gold ETFs

On the performance front, silver ETFs on an average lost 14.36% in June. There were 18 funds in the category, of which Zerodha Silver ETF lost the most of around 14.54%, followed by DSP Silver ETF which lost 14.50%.

SBI Silver ETF, Kotak Silver ETF and HDFC Silver ETF lost 14.34%, 14.43% and 14.38% respectively in June.

Gold ETFs on an average lost 8.92% in the month of June. There were 26 gold ETFs in the said time period, of which Zerodha Gold ETF lost the most of around 9.05% in June. Nippon India ETF Gold BeES, the largest gold ETF based on the assets managed, lost 8.99%.

SBI Gold ETF, Kotak Gold ETF and HDFC Gold ETF lost 8.96%, 8.98% and 8.98% respectively in June.

Umesh Sharma, CIO- Debt, The Wealth Company Mutual Fund said that market participants capitalised on tactical entry points, aggressively increasing allocations to domestic gold ETFs following recent price corrections.

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Suranjana Borthakhur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India) said that a notable trend was the strong resurgence in ETFs and Gold ETFs. ETF inflows of over Rs 13,200 crore and Gold ETF inflows of Rs 3,443 crore point towards investors increasingly using passive products and gold as strategic portfolio allocation tools rather than tactical trades.

The net assets under management for gold ETFs was recorded at Rs 1.70 lakh crore in June whereas for silver ETFs was recorded at Rs 78,943 crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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