"For a long time, investors have stayed away from investing in gold ETFs/funds, as gold prices, after making a high around 2012, has retracted and remained range-bound since then. However, there has been a reversal in trend this year, with gold prices again moving up," Himanshu Srivastava, Senior Research Analyst and Manager Research, Morningstar Investment Adviser India said.
While gold as an asset class acts as a hedge against inflation, it is also a safe haven in times of economic turmoil, he said, adding that the global economy has been facing headwinds in the recent times, gold has once again found its safe haven appeal.
In April, gold ETFs
AUM stood at Rs 4,594.06 crore and rose to Rs 4,606.69 crore in May. It further climbed to Rs 4,931.16 crore and Rs 5,079.22 crore in June and July, respectively, as per the data.
V K Sharma, Head PCG & Capital Markets
Strategy, HDFC Securities said the US-China trade war, plunging bond yields and fears of recession have attracted safe haven buying in gold.
are passive investment instruments that are based on price movements and investments in physical gold.
In this financial year, gold has given spectacular returns to investors and has outperformed stock markets
handsomely, he added.
He also noted that gold would continue to attract buyers as economic uncertainties prevail and fearful investors shy away from financial assets.
Regarding stock markets
yet to give positive returns in the current fiscal, Lakshmi Iyer, Chief Investment Officer (Debt) and Head Products at Kotak Mutual Fund Company, said there has been a global trend of risk aversion, which has meant less money into risk asset class like equities and money flow into safe haven asset class like fixed income and gold.
As valuations improve and markets get more clarity on how the overall macro will pan out, one could see risk on sentiment re-emerge, albeit with a lag, she added.