Gold ETFS attract ₹815 cr inflows
NEWDELHI: Gold exchange traded funds (ETFS) saw net inflows of ₹815 crore in May as investors preferred safe haven options amid stock market volatility and the coronavirus crisis. The category has been one of the better performing asset classes since last year.
Since August 2019, gold ETF segment has received net inflows of ₹3,299 crore. According to latest data available with the Association of Mutual Funds in India (Amfi), a net sum of ₹815 crore was pumped into gold-linked ETFS in May, much higher than the net ₹731 crore infused in April. However, the category had seen a net outflow of ₹195 crore in March.
Prior to this, gold ETFS had seen hefty inflows of ₹1,483 crore in February and ₹202 crore in January. The safe haven asset saw an infusion of ₹27 crore in December 2019 and ₹7.68 crore in November 2019. However, it had seen a net pull-out of ₹31.45 crore in October last year. “Gold ETF investment remains higher in comparison to the months before the pandemic. Many investors are preferring to park their money in gold in light of the volatile markets,” said Harsh Jain co-founder and COO of Groww.
Meanwhile, foreign portfolio investors (FPIS) have pumped in a net ₹20,574 crore into the Indian capital market in June so far amid increasing inflows into emerging markets due to high liquidity. As per latest depositories data, FPIS invested a net ₹22,840 crore in equities but pulled out ₹2,266 crore from the debt segment between June 1-12. This translates into a cumulative inflow of ₹20,574 crore.
Prior to this, FPIS were net sellers for three consecutive months. They pulled out ₹7,366 crore in May, ₹15,403 crore in April and a record ₹1.1 lakh crore in March. “As governments all over the world are taking measures to stimulate their economies, we are seeing more printing of money which is leading to higher liquidity which is a big factor behind more money flowing into emerging markets like India,” Jain said. However, Himanshu Srivastava, associate director-manager research, Morningstar India, said FPI inflow in the second week of June was lower than the first week.