Gold ETFs register Rs 500 crore outflow in Apr-Nov FY18

New Delhi: Investors have pulled out over Rs 500 crore from gold exchange-traded funds (ETFs) in the April- November period of the current fiscal as they preferred equities, as per the latest data by mutual fund body Amfi.

Trading in gold ETF has been lukewarm in the previous four fiscals. It had witnessed an outflow of Rs 775 crore in 2016-17, Rs 903 crore in 2015-16, Rs 1,475 crore in 2014-15 and Rs 2,293 crore in 2013-14.

On the other hand, equity and equity-linked savings scheme (ELSS) saw an infusion of over Rs 1.16 lakh crore during the first eight months of 2017-18. This included an investment of over Rs 20,000 crore in the last month alone.

Stock markets have been on an upswing, touching new highs this year.

"Lacklustre performance by real estate and gold, and low interest rates on traditional savings instruments have contributed in pushing investor flows into equities," Bajaj Capital CEO Rahul Parikh said.

Gold ETFs are passive investment instruments that are based on price movements and investments in physical gold.

"While demand from India has traditionally buttressed gold prices globally, sound rally in the Indian equity markets has meant that gold as an asset class has not been favoured. A strong Indian equity market may mean a sober outlook for gold," Vidya Bala, head of MF Research at FundsIndia.Com said.

According to the latest data available with the Association of Mutual Funds in India (Amfi), a net sum of Rs 511 crore was pulled out from 14 gold-linked ETFs during April-November period this year.

In comparison, a net amount of Rs 588 crore was withdrawn from the instrument in the year-ago period.

The outflow meant assets under management (AUM) of gold funds plunged by 10 percent to Rs 4,922 crore at November-end from Rs 5,480 crore at the end of March.

Withdrawal of Rs 66 crore was seen in April this year, Rs 71 crore in May, Rs 81 crore in June, Rs 38 crore in July, Rs 58 crore in August, Rs 74 crore in September, Rs 34 crore in October and another Rs 89 crore in November.