Gold ETFs see 451cr outflow in Jan due to profit-booking

Chennai: Gold exchange-traded funds (ETFs) saw the highest-ever repurchase or redemption of Rs 671 crore in January 2022, leading to an outflow of Rs 451 crore. This was primarily driven by rising 10-year Indian government bond yields and expectations of a more hawkish US Fed stance. Redemption 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 anticipation towards the US Fed hiking the interest rate and surging crude oil price. This global correction 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. Gold price is expected to stabilise at the current levels, 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.