Gold ETFs Gain Traction Among Investors with the Highest Inflow in 16 Months. Is it Time to Invest in Gold?

Date : 15/09/2023
Read: 3 mins

Gold ETFs are listed investment avenues that help you invest in gold affordably. These ETFs have seen the highest inflows over the past 16 months. Should you also add gold to your portfolio? Let’s find out.

Gold ETFs witness highest inflows in 16 months

While gold attracts investment among many Indians, its digitized format is also gaining traction among many. Gold Exchange Traded Funds (ETFs) are gold-oriented investment avenues that allow you to invest in gold in a digitized format and in smaller quantities. These ETFs are listed on the stock exchange, and you can buy and hold them through your Demat Account. These investments are becoming popular per AMFI’s (Association of Mutual Funds in India) report. Gold ETFs saw an investment of Rs.1028 crores in September 2023, higher than the investment reported in August 2023. This makes gold ETF investments to be the highest in the last 16 months.

Highlights

Gold ETFs are liquid investment avenues allowing you to invest in gold in the dematerialized format.
Gold ETFs have witnessed a considerable inflow over the last 16 months.
Easy liquidity, convenient trading, safe custody, and good returns are some of the benefits of gold ETFs.
With the upcoming festive season, gold demand and price might increase, making gold a good investment avenue.

What is Contributing to the Growth of Gold ETFs?

Gold ETFs offer a distinct advantage to investors, which is why they are popular. Some such advantages are as follows –

Safe investment avenue as 90% to 100% of the portfolio is invested in gold with 995 purity.
No exit loads are allowing you to buy and sell gold ETFs anytime that you want. This makes them liquid
Gold is considered a hedge against inflation and equity volatility. Investors consider it a safe haven and invest in it in uncertain times.
After gold prices reached all-time highs in March 2023, recently, there’s been a sharp correction in the prices. The prices have fallen, allowing investors to see gold as a lucrative investment opportunity.
Over the last year, gold has generated a return of 13% to 15%.

Should You Invest?

With the upcoming festive season, gold prices might rise as demand surges. As such, it might be a good time to invest in the metal at a reduced rate to earn returns when prices rise. Moreover, with gold ETFs, you get liquidity, easy tracking of gold price movements, no storage concerns, etc. So, you might invest in the ETFs if they align with your needs.

Also Read – Find out how to invest in gold ETFs

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The Bottom Line

Assess the gold price movements in the recent past and then make your decision. You can buy the metal for its traditional value or investment returns; the choice is yours.

Also Read – Physical gold or gold ETFs, which one should you choose? Find out.

Disclaimer: This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.