Gold ETFs register outflows on almost all months in last 4 years

Himadri BuchMoneycontrol
Over the last 3 years (from December 2013 to November 2016) gold ETFs have witnessed outflows in almost every month, and cumulatively an outflow of around Rs 5,300 crore. Fund managers attributed the outflows in gold ETFs in the last 4 years to the outperformance of Indian equity markets prompting investors to shift their investments from Gold ETFs to equities. The asset base of gold exchange traded funds dropped to Rs 5,670 crore at the end of January 2017 from Rs 12,057 crore in end of January 2013. 

Indians appear to view investments in physical gold and gold ETFs differently. Traditionally, Indians are known to buy and hold investments in physical gold for years, even generations. Gold has been seen as a store of value and inflation hedge. But when it comes to gold ETFs or demat gold, it seems to be a different story.