Is it appropriate to buy gold at this time? What fund managers have to say is as follows

Is it appropriate to buy gold at this time? What fund managers have to say is as follows

Although there were withdrawals from gold funds in April, fund managers generally agree that the yellow metal will remain strong and provide a safe haven, particularly in times of market turbulence.

The AUM of Gold ETFs was estimated by AMFI to be Rs 32,855.41 crore in April 2024, a significant increase from Rs 22,909.38 crore in April 2023 - a gain of over 43 percent in a single year.

Although there may have been withdrawals from gold funds in April, fund managers generally agree that the yellow metal will continue to be popular and provide a safe haven, particularly during volatile market times.

According to the most recent statistics available from the Association of Mutual Funds in India (AMFI), outflows from gold exchange-traded funds (ETFs) were Rs 395.69 crore in April. It's worth noting that this is the first time in the last year that the category has had withdrawals within a single month.

Fund managers, however, think that gold will always be important for investors, both domestically and internationally.

In a letter published on May 9, Vishal Jain, CEO of Zerodha Mutual Fund, emphasized how gold ETFs have traditionally increased in difficult economic times. Jain claims that during the epidemic period, the assets under management of gold ETFs surged dramatically by around 150 percent, from Rs 5,527.76 crore in December 2019 to Rs 13,819.39 crore in December 2020.

The AUM of gold ETFs was estimated to be Rs 32,855.41 crore in April 2024, according to AMFI statistics. This is a significant increase from Rs 22,909.38 crore in April 2023 - a leap of over 43 percent in only one year.

Everything shiny is made of gold.

Gold has been a popular investment strategy due to its extraordinary performance, with a compound annual growth rate (CAGR) of over 50 percent in the domestic market over the previous two and a half years, according to Deveya Gaglani, Senior Research Analyst at Axis Securities.

The next Akshaya Tritiya, according to Gaglani, "we expect gold prices to touch Rs 77,000 as well, as investors may flock into gold due to uncertainty in the global market."

Since today is Akshaya Trithia, buying gold is seen to be auspicious on this day.

Rather of purchasing actual gold, Gaglani suggests people consider investing in gold ETFs, gold sovereign bonds, and gold bees.

It's interesting to note that in recent years, investment possibilities in the form of digital gold have emerged, relieving investors of the burden of maintaining and storing precious metal.

Both traditional and digital gold jewelry are appealing investment options, according to Suraj H S, co-founder of Aurm, an asset protection company that works with banks to provide automated safe-deposit vaults in residential communities. However, Suraj H S notes that digital gold has better liquidity in case cash is needed right away.

"Gold jewelry has two purposes: it may be used as adornment for special occasions and as an investment. Furthermore, he said, traditional jewelry may be bequeathed to the next generation.

According to Kresha Gupta, Director of StepTrade Share Services, ordinary investors are increasingly choosing to make gold investments online, even though gold investing has long been a mainstay in India.

"Gold mutual funds offer a hedge against economic shocks due to their stability against market fluctuations and his capacity to provide consistent returns against inflation." "Generating wealth over the investment period and protecting against market downturns should be the primary goals of such investments," Gupta said.

In the meanwhile, according to Ghazal Jain, Fund Manager at Quantum Mutual Fund, a 10-15 percent gold allocation might prevent portfolio loss during risk-asset drops given the geopolitical environment in the Middle East and surrounding Russia-Ukraine.

Gold ETFs have continued to provide strong returns over the course of a year, coinciding with the steady increase in gold prices. For instance, in the last year, the Axis Gold ETF, which has an AUM of Rs 483 crores, has delivered returns of almost 15%. Likewise, the Nippon India Gold Savings Fund has produced returns of around 15.58 percent with an AUM of Rs 1,842 crore.

This year has seen a strong start to the market for gold funds in India, mostly driven by themes related to multi-asset investment and portfolio diversification. Because of their efficiency, safety, and simplicity of use, gold funds should see more coverage and subscriptions as the capital market becomes more active, according to Vikram Dhawan, Head Commodities as well as Fund Manager at Nippon India Mutual Fund.

The speaker notes that while the price of gold is at an all-time high, investors who are seeking protection against the upcoming elections in the US and India may want to think about investing in gold exchange-traded funds (ETFs).

The majority of fund managers think that investors may have decided to adjust their portfolios or record profits as a result of the recent withdrawals from gold ETFs.

In the next months, Jain of Quantum Mutual Fund believes that investor interest in gold ETFs will increase again, and that investors can take advantage of price reversals as good opportunities to enter the market.