Investors are continuing to invest resources into gold ETFs. Investors are increasingly recognizing the importance of include gold in their portfolios as a diversifier. Since gold may be used to safeguard against currency fluctuations and inflation, it is seen as a secure investment. This can be seen in the folio number statistics for the Gold ETF, which increased by nearly 10% in June to 18.32 lakh from 16.68 lakh in May.
The category got a net inflow of Rs 359.66 crore in June, up from Rs 287.86 crore the previous month. “The redemption amount was greater in June than in May, indicating that a few investors may have decided to book profits as gold pricescontinue to rise. However, in June, as compared to May, the quantity mobilized increased dramatically.
According to Morningstar India’s Himanshu Srivastava, Associate Director – Manager Research, “gold as an asset class has been attracting a growing number of investors,” based on AMFI monthly statistics for June 2021.
The category got a net inflow of Rs 9,737.14 crore from January 2020 to June 2021. Given its potential to operate as an effective diversifier and mitigate losses during difficult market circumstances and economic downturns, gold serves as a strategic asset in an investor’s portfolio.
During the recent difficult investing climate, gold has emerged as one of the better performing asset classes, demonstrating its use in an investor’s portfolio. This has caught the curiosity of investors, and it continues to do so, as seen by the steady net inflows into the Gold ETF category.
“Gold ETFs experienced a rise in inflow from Rs 287 crore in May to Rs 359 crore in June,” stated Priti Rathi Gupta, Founder, LXME (India’s first financial platform for women). Despite the fact that debt funds haven’t provided tremendous returns in the previous several years and gold has risen in value, investors are shifting their equity investments to debt funds and gold.”
Investors use portfolio rebalancing to protect their wealth against market volatility when the market is too high. “With the stock market at an all-time high and widespread uncertainty, investors are anxious and looking for ways to secure their immediate future. In addition, because of the second wave of Covid and the slowing economy, an investible surplus is being compressed.”
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