• UGI USER
  • May 13, 2024
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GOLD ETFS EXPERIENCE INITIAL OUTFLOW POST MARCH 2023, CITING PROFIT BOOKING

Why in the news?

Gold ETFs witness first net outflow since March 2023, attributed to profit booking amid a 5% rise in assets under management.

source:wordpress

 About the Gold ETF Outflows:

  • Gold Exchange Traded Funds (ETFs) experienced a net outflow of Rs 396 crore in April, marking the first withdrawal since March 2023.
  • This outflow was attributed to profit booking as investors capitalised on gains in gold prices.
  • Despite the outflow, the asset under management (AUM) of gold funds increased by 5%, reaching Rs 32,789 crore at the end of April.
What are Gold Exchange Traded Funds (ETFs)?

  • Gold Exchange Traded Funds (ETFs) are passive investment instruments.
  • They track domestic physical gold prices and invest in gold bullion.
  • Gold ETF units represent physical gold in paper or dematerialized form.
  • Each unit equals 1 gram of gold.
  • Units are backed by gold of high purity.

What is an Exchange-Traded Fund (ETF)?

  • Exchange-Traded Fund (ETF) is like a stock basket, traded on an exchange.
  • Its value mirrors an Index, such as BSE Sensex, based on underlying stock Net Asset Value (NAV).
  • ETFs trade throughout the day, unlike mutual funds, which trade once daily.
  • They can hold a wide range of stocks from various industries or focus on a specific sector.
  • Bond ETFs, another type, include government, corporate, and municipal bonds.
  • Bonds represent loans from investors to borrowers, like corporations or governments.