Asset managers said that volatility and uncertainty in other asset classes have prompted investors to turn to safe-haven investments.
The gold exchange-traded funds recorded net inflows in November for the first time in 25 months, according to the latest data from Association of Mutual Funds in India (AMFI).
Though the net inflows into gold exchange-traded funds in November stood at just Rs 10 crore, mutual fund experts said investors were warming up to exposure in gold, given the uncertainty in equity and debt markets.
Last month, net inflows into equity funds touched a seven-month low of Rs 7,580 crore, while debt funds recorded net outflows for the seventh consecutive month.
The net outflows from debt funds in November stood at Rs 6,520 crore.
Asset managers said that volatility and uncertainty in other asset classes have prompted investors to turn to safe-haven investments like gold funds or ETFs. Some fund managers said investors are also diversifying their investments into gold schemes, expecting stable returns.
"Since gold has a very strong negative relationship with equity markets, it probably makes sense to have some 5-10 percent in gold ETFs or other investment products as a hedge," a fund manager said.
Gold has a negative relationship with equity. In times of volatility or crisis gold as an investment performs better than equity.
Gold ETFs are passive investment instruments that are based on price movements and investments in the metal.
According to fund managers, the appetite for gold ETFs would jump amidst the volatility and also because of the convenience to buy units of gold.
"The gold appetite is going up very rapidly. The simple reason being lack of confidence in other asset classes due to volatility. A lot of investors have realized investments into ETFs versus physical gold," said a fund manager from a private fund house.
Gold ETFs score over physical gold due to the low cost of holding, no risk of theft, good control of quality, and no wealth tax.
Over the past one year, gold exchange-traded funds have delivered steady returns. In the one year period ended Dec 11, eleven gold exchange-traded funds have delivered 9.79 percent, according to the data on Value Research, a mutual fund research firm.
All other fund categories delivered lower returns, with select categories such as equity small-cap, equity mid-cap, equity multi-cap, and equity-oriented hybrid fund categories recording negative returns.
Gold exchange traded funds have also benefited from depreciation in the rupee, as the exposure of such funds to physical gold is benchmarked to the London market prices.
A weak rupee leads to a hike in gold prices. Other things remaining the same, when the rupee weakens, gold prices go up because much of India’s gold is imported. The rupee fell to Rs 74.39 a dollar on October 11, down from Rs 63.67 a dollar at the start of 2018.
शेयर मार्किट की और अधिक जानकारी के लिए Regrow Investment Research Advsior पे दी गई लिंक पर क्लिक करें।
GOLD PRICE OUTLOOK
Gold ETFs seek to provide returns that closely correspond with returns provided by domestic price of gold through physical gold.
According to fund managers, gold ETF is the best way to hold the precious metal as these funds track the gold prices. Feeder funds invest in units of overseas gold funds, which in turn deploy corpus in shares of companies engaged in gold mining business.
So, along with gold price movements, feeder funds are also exposed to fluctuations in share prices.
Gold prices have been on an upward trend in the last few months. On Dec 12, Mumbai spot bullion was trading at 32,500, up nearly 9 percent from a year ago.
Gold experts said gold prices will continue to be on an upward spiral on the back of geopolitical risks. “Gold prices will go up due to the geopolitical risks and trade war. The proximity of US and Russia in such conflicts have a positive impact on gold prices,” said Kumar Jain, Vice-President, Mumbai Jewellers Association.
Expert attribute three broad factors behind the rise in gold prices in the past year. First, the geopolitical risks associated with conflicts in Syria. The proximity of US and Russia in such conflicts have a positive impact on gold prices.
Also, there are a slew of local issues in oil-producing Middle-East nations, with tension between Saudi Arabia and Iran and Saudi Arabia and Turkey that can add to global uncertainty.
Second, the trade wars have increased uncertainty between the US and China. Although there has been a temporary ceasefire in the past weekend where both nations have moved a step forward to a truce, it's a temporary truce and nobody really know the future. Trade wars are strategies initiated by countries to boost one's exports to other countries and reducing imports from other countries by resorting to tariffs and non-quantitative restrictions.
Here you can also Follow Regrow Investment Research Advsior Facebook for free recommendations and tips.
Visit === https://www.regrowin.com/
The gold exchange-traded funds recorded net inflows in November for the first time in 25 months, according to the latest data from Association of Mutual Funds in India (AMFI).
Though the net inflows into gold exchange-traded funds in November stood at just Rs 10 crore, mutual fund experts said investors were warming up to exposure in gold, given the uncertainty in equity and debt markets.
Last month, net inflows into equity funds touched a seven-month low of Rs 7,580 crore, while debt funds recorded net outflows for the seventh consecutive month.
The net outflows from debt funds in November stood at Rs 6,520 crore.
Asset managers said that volatility and uncertainty in other asset classes have prompted investors to turn to safe-haven investments like gold funds or ETFs. Some fund managers said investors are also diversifying their investments into gold schemes, expecting stable returns.
"Since gold has a very strong negative relationship with equity markets, it probably makes sense to have some 5-10 percent in gold ETFs or other investment products as a hedge," a fund manager said.
Gold has a negative relationship with equity. In times of volatility or crisis gold as an investment performs better than equity.
Gold ETFs are passive investment instruments that are based on price movements and investments in the metal.
According to fund managers, the appetite for gold ETFs would jump amidst the volatility and also because of the convenience to buy units of gold.
"The gold appetite is going up very rapidly. The simple reason being lack of confidence in other asset classes due to volatility. A lot of investors have realized investments into ETFs versus physical gold," said a fund manager from a private fund house.
Gold ETFs score over physical gold due to the low cost of holding, no risk of theft, good control of quality, and no wealth tax.
Over the past one year, gold exchange-traded funds have delivered steady returns. In the one year period ended Dec 11, eleven gold exchange-traded funds have delivered 9.79 percent, according to the data on Value Research, a mutual fund research firm.
All other fund categories delivered lower returns, with select categories such as equity small-cap, equity mid-cap, equity multi-cap, and equity-oriented hybrid fund categories recording negative returns.
Gold exchange traded funds have also benefited from depreciation in the rupee, as the exposure of such funds to physical gold is benchmarked to the London market prices.
A weak rupee leads to a hike in gold prices. Other things remaining the same, when the rupee weakens, gold prices go up because much of India’s gold is imported. The rupee fell to Rs 74.39 a dollar on October 11, down from Rs 63.67 a dollar at the start of 2018.
शेयर मार्किट की और अधिक जानकारी के लिए Regrow Investment Research Advsior पे दी गई लिंक पर क्लिक करें।
GOLD PRICE OUTLOOK
Gold ETFs seek to provide returns that closely correspond with returns provided by domestic price of gold through physical gold.
According to fund managers, gold ETF is the best way to hold the precious metal as these funds track the gold prices. Feeder funds invest in units of overseas gold funds, which in turn deploy corpus in shares of companies engaged in gold mining business.
So, along with gold price movements, feeder funds are also exposed to fluctuations in share prices.
Gold prices have been on an upward trend in the last few months. On Dec 12, Mumbai spot bullion was trading at 32,500, up nearly 9 percent from a year ago.
Gold experts said gold prices will continue to be on an upward spiral on the back of geopolitical risks. “Gold prices will go up due to the geopolitical risks and trade war. The proximity of US and Russia in such conflicts have a positive impact on gold prices,” said Kumar Jain, Vice-President, Mumbai Jewellers Association.
Expert attribute three broad factors behind the rise in gold prices in the past year. First, the geopolitical risks associated with conflicts in Syria. The proximity of US and Russia in such conflicts have a positive impact on gold prices.
Also, there are a slew of local issues in oil-producing Middle-East nations, with tension between Saudi Arabia and Iran and Saudi Arabia and Turkey that can add to global uncertainty.
Second, the trade wars have increased uncertainty between the US and China. Although there has been a temporary ceasefire in the past weekend where both nations have moved a step forward to a truce, it's a temporary truce and nobody really know the future. Trade wars are strategies initiated by countries to boost one's exports to other countries and reducing imports from other countries by resorting to tariffs and non-quantitative restrictions.
Here you can also Follow Regrow Investment Research Advsior Facebook for free recommendations and tips.
Visit === https://www.regrowin.com/
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