Gold prices have grabbed headlines almost throughout the calendar year of 2024. Rarely have gold prices rallied so sharply in recent years both in the global and domestic market of India as they have done this year. While this has prompted a lot of investors to turn to gold as man investment medium, it has also attracted the attention of investors to modern investment avenues such as gold ETF or gold exchange-traded funds.
Gold ETFs track the prices of the physical metal in the market. The first gold ETF hit the Indian market in 2007. It was called Gold BeES. As the name implies, these funds are traded on exchanges and one needs a demat account to invest in gold ETFs.
How investors are rising in gold ETF market
To illustrate how investors have reacted enthusiastically to gold ETF, let’s turn to AMFI data. In September 2024, there were 17 gold ETFs in the market and the number of folios in this segment was 57,10,499. The market was marked by a net positive inflow of Rs 1,232.99 crore.
In October 2024, the total number of gold ETF schemes rose to 18 and the number of folios in the market rose to 59,13,163. There was a net positive inflow of Rs 1,961.57 crore in this market. In November 2024, the number of schemes remained the same but the number of folios – 62,52,992 at the end of the month – indicate investor enthusiasm was growing. The positive flow to this segment stood at Rs 1,961.57 crore.
Better performing gold ETFs
All ETFs, including gold ETFs, are passively managed funds. They pool in money from as many investors as possible to invest in gold. Some of the better performing gold ETFs include LIC MF Gold ETF, Nippon India ETF Gold BeES, HDFC Gold ETF and SBI Gold ETF.
Outlook of gold prices in 2025
Experts feel that gold will maintain its golden run in 2025 too. The tailwinds could be the continuing geopolitical tension in the world and rate cuts by the US Fed. “With the return of Donald Trump as U.S. president, there is likely to be more uncertainty regarding trade and tariffs, which should also support the gold price,” Steffen Metzger and Stefan Staubach, heads of precious metals division of Heraeus has been quoted in the media as saying.
ETF: the best medium to invest in gold
“If you want to invest in gold, ETFs perhaps constitute the best medium to do so. There are no storage concerns or cost, no fear of pilferage, and most important, no reduction in value like deduction of making charge etc which is applicable if you want to sell a piece of jewellery in the market,” investment strategist Prasunjit Mukherjee, who is also the CEO is Plexus Management Services told News9.
(Disclaimer: This article is only meant to provide information. News9live.com does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)
The monthly investment data from the Association of Mutual Funds in India reveals how investment in gold ETF (exchange traded fund) is continuously rising over the past few months. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
