Gold exchange traded funds (ETF) had witnessed a record inflow of 100 crore in the month of septemeber- the highest ever in a single month- taking up its total asset under management (AUM) to 8,173 crore. This is the sixteenth consecutive month of inflow despite a fall in prices for the underlyingcommodity in the month, a report by crisil research said. “gold is looked upon as a safe haven in the times of uncertainty and also an asset class with a low correlation to equities. Hence, investors have increase their participation to this asset class,” said Mr Jiju Vidhyadharan, the head offunds and fixed income research at crisil research. However, instead of directly investing in gold ETF, investors are increasing their exposure to the yellow metal through the gold fund of funds (FoF) launched by various fund houses, according to Mr sundeep Sikka, chief executive officer of reliance mutual fund. The FoF pools money from investors and invests in other mutual fund schemes. Relianes gold savings funds had seen its AUM swell to 3,000 crore with participation from close to 3.8 lakh investors. “more money is flowing in to gold savings funds, because unlike gold ETF, it does’nt require an investor to have a demat account and a stockbroker to make their investment. This provides a hassle-free mode of investment,” Mr sikka added. Others feel that the recent correction in the prices of gold had also prompted investors to accumulate gold. “ this coincided with the launch of gold FoF by various fund houses attracting investors,” said Ms Lakshmi Iyer, headof fixed income and products, Kotak Mahindra Mutual fund.
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