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.
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