Monday October 15, 03:11 AM
Yellow metal catching investor fancy
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By Markets Bureau
At a time when the Indian equity market is scaling dizzying heights, retail investors are diversifying their portfolios. They have increased exposure to equities and have also started investing heavily in gold exchange traded funds (GEFTs). This is reflected in the 44% rise in assets under management (AUM) of gold ETFs over the past six months of this financial year. According to the Association of mutual funds in India, gold ETFs had an AUM of Rs 226 crore at the end of April this year. The AUM had shot up to Rs 325 crore by the end of September. Not just this, the average daily volume of trade in gold ETFs is also rising. Benchmark AMC, which offers gold ETFs, clocks a daily average of around 10,000 units. Kotak AMC has a daily average of around 5,000 units. "Gold ETFs help investors protect a downside in portfolios,"said Sandesh Kirkere, CEO, Kotak AMC. "At a time when equity markets are rising steeply, and the Indian currency is under pressure against the US greenback, investors should diversify their portfolios, as over a period of time, the gold prices will rise because of the weakening dollar, enabling GETFs to give attractive returns." "The volumes of gold ETFs are expected to surge further with the onset of the festive season,"says Sanjiv Shah, executive director, Benchmark AMC. "And especially so when the equity market is getting so overheated." He added, "Investors should have their assets properly allocated and diversified in other asset classes like gold and other metals."
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