Inflows continued in gold exchange-traded funds in India in July as prices of the yellow metal declined in the domestic market.
Investors deployed Rs 1,337.4 crore into gold ETFs—passive investment instruments that track gold prices—in July, according to data released by the Association of Mutual Funds in India on Friday. The investment was the highest since August of last year. In June, the net inflow was Rs 726.2 crore.
Net assets under management of gold ETFs in India stood at Rs 34,455.1 crore last month. It has jumped 68% in a year as investors increasingly turn to the proxy and tax-efficient way of investing in gold without the hassle of physically storing it.
Nippon India ETF Gold BeES—the country's top fund in the segment that manages over Rs 11,800 crore—has given 15% returns in the last year.
Gold prices declined in July after Finance Minister Nirmala Sitharaman announced a reduction in basic customs duty on gold and silver from 10% to 6%.
Global gold ETFs experienced their strongest month since April 2022, attracting $3.7 billion in July, the third consecutive monthly inflow, according to the latest World Gold Council data. Recent inflows and the rising gold price pushed global gold ETFs' total AUM to $246 billion, while holdings rose to 3,154 metric tonnes.
Inflows Into Mutual Funds
Equity inflows declined 8.6% to Rs 37,113.4 crore last month against Rs 40,608.2 crore in June. Net flows recorded an inflow of Rs 1.89 lakh crore against an outflow of Rs 43,636.5 crore in June, led by a jump in the fixed income funds, according to the AMFI data.
July was marked by a slew of proposals to tame the booming participation in equity derivatives as warnings swelled to ensure the savings of retail investors are made productive.
Overall inflows into mutual funds stood at Rs 1.89 lakh crore during July, compared with an outflow of Rs 43,636.5 crore. Net assets under management increased to approximately Rs 65 lakh crore in July from Rs 61.2 lakh crore in June.
Having crossed Rs 50 lakh crore in December 2023, the next Rs 10-lakh crore journey of the net AUM to the Rs 60 lakh crore mark has been achieved in just six months.
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