Gold ETFs see Rs 539 crore outflows in April-Sep FY'17

New Delhi: Investors pulled out Rs 77 crore from gold exchange-traded funds (ETFs) in September, taking the total withdrawal to Rs 539 crore in the first six months of the current fiscal.

Trading in Gold ETFs has been tepid in the last three financial years. The funds had witnessed an outflow of Rs 903 crore, Rs 1,475 crore and Rs 2,293 crore in 2015-16, 2014-15 and 2013-14, respectively.

The pace of outflow, however, slowed down in 2015-16 as against the preceding two years on account of sluggish equity market.

"The inherent promise to maintain global liquidity has seen money pouring into global equities taking equities higher and making gold look less attractive," Chirag Mehta, Senior Fund Manager Commodities, at Quantum Asset Management Company said.

"Indian Gold ETFs continue to witness outflows with more investors seen exiting the yellow metal. This could largely be on account of investors booking profits who would have bought at lower levels and seeing good returns in a small span of time," he added.

According to the latest data available with Association of Mutual Funds in India (Amfi), Gold ETFs witnessed a net outflow of Rs 77 crore last month, as compared to Rs 51 crore in August.

In July, there was an withdrawal of Rs 183 crore, which was the highest monthly outflow since June 2014, when gold-backed ETFs saw a pullout of Rs 227 crore.

Prior to that, Gold ETFs saw a pullout of Rs 80 crore in June, Rs 79 crore in May and another Rs 69 crore in April.

This takes the total outflow to Rs 539 crore in the first half of the ongoing fiscal, 2016-17. In comparison, it was Rs 420 crore in April-September of 2015-16.

The assets base of gold-linked ETFs account dropped to Rs 6,295 crore at the end of September from Rs 6,349 crore in August-end.

Mutual fund sector has 14 gold-based schemes, which have been in the market since 2006-07.