Gold ETFs witness outflow of Rs 363cr in Apr-Aug FY 2016

NEW DELHI: Investors continue to pull out money from gold exchange-traded funds (ETFs), but the pace of outflow has slowed down in the current fiscal on account of the sluggish equity market trends.

The Gold ETFs witnessed a net outflow of Rs 363 crore in the first five months (April-August) of the ongoing financial year, down from an outflow of Rs 931 crore in the same period of 2014-15 fiscal.

These funds witnessed outflows in the last two fiscals as well — Rs 1,475 crore in the entire 2014-15 and again a withdrawal of Rs 2,293 crore in 2013-14.

The outflows led to assets under management of gold funds plunging by 27 per cent during the first five months of the current fiscal.

Market experts attributed the slower pace of outflows to weakness in stock markets.

The demand for gold ETFs has been steadily falling for the past two years. These products have seen outflow as gold prices are correcting and equities have given good returns to investors.

The BSE’s benchmark Sensex has plunged by six per cent during the period under review.

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

The outflow pulled the assets base of Gold ETFs to Rs 6,323 crore in August from Rs 8,676 crore at the end of the last financial year.