Gold ETFs see Rs 451 crore outflow in
Jan due to profit-booking
CHENNAI: Gold exchange-traded funds
(ETFs) saw the highest-ever repurchase or
redempon of Rs 671 crore in January 2022,
leading to an oulow of Rs 451 crore. This
was primarily driven by rising 10-year Indian
government bond yields and expectaons of
a more hawkish US Fed stance. Redempon
or repurchase refers to fund houses buying
back ETF units from investors.
N S Venkatesh, CEO of the mutual fund body
(AMFI), said, “In January, the gold price
corrected on the back of ancipaon
towards the US Fed hiking the interest rate
and surging crude oil price. This global
correcon in the yellow metal price impacted
the Indian market, who decided to book their profit last month.”
The gold ETF folio saw an inflow of funds of Rs 313 crore in December 2021, according to AMFI data. It is
common that investors withdraw from liquid funds for liquidity purposes. Going forward, the gold price
is expected to stabilise at the current levels and hence and one does not expect any drasc movement
in the coming months, Venkatesh added.
The net assets under management (AUM) as on January 31, 2022, declined 3% to Rs 565 crore as
compared to the previous month. Its average net AUM for the month of January 2022 stood at Rs
18,183 crore.
The total number of gold ETF folios stood at 34.6 lakh in the last month. On a month-on-month basis,
the gold ETF has added two lakh more new folios — from 32.1 lakh folios in the last month.
Lakshmi Iyer, CIO (debt) & head (products) at Kotak Mahindra AMC, said “Gold ETF repurchase in the
last month was the highest ever since 2021. This move could have been asset allocaon exit from
customers, when both equity and gold saw correcon in trade last month.”
According to the World Gold Council report, Indian gold ETFs in volume terms saw oulows to the
extent of one tonne in January 2022 to stand at 37 tonne. Globally, the gold ETFs added 46 tonne ($2.7
billion) to global AUM in January 2022, the largest monthly tonnage inflows since May 2021.
Edited by: A.Madhuri
