Are you debating between buying physical gold and investing in paper gold schemes or ETFs? Anil Rego has the answer
Asset managers are betting big on ETFs these days.
The cryptocurrency exchanges in India have got a fresh lease of life following the bull run in Bitcoin, which briefly hit a new all-time high of more than $69,000. Siddharth Sogani, managing director of CREBACO, expects the price to cross $1,00,000 by the end of the year. This will see a sharp reversal in the Indian market, which has largely been dormant since the new tax regime was implemented in 2023.
Though gold ETFs are traded on stock exchanges, they are taxed at a higher rate.
"We are now looking at a new fund under the gold category, which will enable small investors to subscribe to the units from the offices of UTI, without even having a demat account," said sources at UTI Mutual Fund. "With the equity markets rising by almost 30 per cent between mid-March and April, investors are no longer interested in gold ETFs. Also most Indians prefer holding physical gold, rather than gold ETFs," said a broker.
Smallcap mutual funds recorded net outflows for the first time in 30 months in March as investors pulled out money after the markets regulator, the Securities and Exchange Board of India (Sebi), warned against "froth" in the mid and smallcap space. Active equity mutual fund (MF) schemes raked in Rs 22,600 crore in March. The March inflow is 16 per cent lower than the two-year high inflow of Rs 26,860 crore in February, shows data from the Association of MFs in India (Amfi).
Geopolitical tensions in different parts of the globe and slowdown in global economy led investors to opt for safe-haven like gold over the last one year.
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The ETF is expected to fetch the govt Rs 3,000 crore.
Unlike mutual funds, an ETF trades like a common stock.
Gold is an excellent asset class for diversification and should be included in all long-term portfolios.
Those who want to invest should consider their risk appetite. Youngsters may go for it as they have a longer horizon to recover from a setback.
With more exchange traded funds coming into the market, are they a better alternative to mutual funds?
RBI Governor Shaktikanta Das on Thursday said the central bank does not "emulate" others when it comes to regulations and asserted that the bank's as well as his own opposition to cryptocurrencies remain unchanged, a day after US regulators allowed bitcoin Exchange Traded Funds (ETFs). He also said that emerging markets and the world cannot afford to have a "crypto mania". "What is good for another market need not be good for us.
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The Finance Ministry has filed the offer document with market regulator Securities and Exchange Board of India for the Central Public Sector Enterprises ETF, which could fetch the exchequer about Rs 3,000 crore (Rs 30 billion).
This is the first time Reliance MF has crossed Rs 1,000 crore mark in its ETF in a single day.
A total of over $6 bn has flown into India through ETFs, making this equivalent to the largest country funds
During April-July, the investor-base in gold ETFs expanded 24 per cent.
Move over equity markets, mutual funds and bonds. Investors across India are these days picking up and trading in the latest investment avenue in town: the Gold Exchange Traded Funds.
After touching a high of Rs 32,01/10g in October 2013, gold prices fell to a low of Rs 26,900/10g in June
According to the latest statistics from the Association of Mutual Funds of India, gold ETFs have lost 18 per cent of their investor base since May.
Data from the Association of Mutual Funds in India show that in 2010-11 till date, gold ETFs have seen net inflows rise by close to four times, to Rs 1,169 crore (Rs 11.69 billion), compared with Rs 312 crore (Rs 3.12 billion) during the same period last year.
India's gold demand rose 8 per cent annually to 136.6 tonne in the March quarter helped by a strong economic environment despite prices touching historic highs, according to the World Gold Council. The aggressive gold buying by the Reserve Bank of India (RBI) also contributed to the rise in demand. India's gold demand in value terms rose 20 per cent on an annual basis to Rs 75,470 crore during the January-March period of this year on volume growth as well as a rise in quarterly average prices by 11 per cent.
'It is the best avenue for investors who would like to take long-term exposure to gold.'
'Investing abroad helps mitigate currency risk for foreign-currency denominated goals, such as children's higher education and international travel.'
Gold exchange-traded funds (ETFs) have further lost favour among Indian investors.
In May, MFs were the net sellers in several PSUs, as they deployed Rs 47,600 crore in equities during the month.
With a steep fall in the markets since January this year, mutual funds have suffered heavily. Sample this: the year-to-date (January 1 to March 24) category average return from equity diversified mutual funds is down by 32.36 per cent, and index funds, including exchange traded funds (ETFs), have slipped by 26.41 per cent.
The Department of Disinvestment, which is the nodal department for carrying out PSU stake sale, will finalise the cabinet note after appointment of asset management companies to handle PSU ETF.
Gold exchange traded funds are a new product, so investors should look at the cost of investing in them before making a decision.
Paper gold saves your investments from volatility, and you from hassles that come with the physical form. The chance of good returns gives that extra shine.
The Bombay Stock Exchange on Thursday said it will keep a special window open for trading in gold ETFs (exchange traded funds) on 'Akshaya Tritiya' day on May 16.
India has over 19 million cryptocurrency investors out of which nearly nine per cent are women, data from a report by cryptocurrency exchange platform CoinSwitch showed. Nearly 75 per cent of cryptocurrency investors belong to a young demographic, with ages spanning from 18 to 35 years, the report noted. This represents a significant interest in crypto among young users.
The State Bank of India said on Monday it would launch a gold exchange traded fund in 2008. "We are examining this product in our mutual fund company and we are hopeful we should be able to come out with an ETF next year," O P Bhatt, SBI chairman said at a conference in Mumbai.
A portfolio can be rebalanced by either selling a portion of the outperforming asset class or by buying more of the underperforming asset class.
According to the report, benchmark gold ETFs have increased to 2.03 tonnes in May from 1.5 tonnes in the corresponding period last year. Whereas gold ETFs at UTI, Reliance Capital and Kotak remained at 1.32 tonnes, 1.23 tonnes and 0.34 tonnes respectively during May period, it said.
Sources said many individual investors were interested in applying for the NFO, due to additional benefits being offered such as upfront discounts and loyalty bonuses.
According to a report by mutual fund tracker Morningstar, India-focused offshore funds and ETFs had witnessed a cumulative net outflow of $1.8 billion during 2012 as against a net withdrawal of $5.4 billion in 2011.
Experts say the worst is over for the global economic markets but the markets don't seem to fully agree as they still fluctuate and remain unpredictable.
To help mobilise idle gold in households.
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