New Delhi: Gold Exchange Traded Funds (ETFs) witnessed a significant influx of Rs 2,920 crore in 2023, marking a six-fold surge compared to the previous year, as investors sought the safety of this traditional safe haven amid higher inflation, subsequent hike in interest rates and geopolitical events.
Additionally, the asset base of gold ETFs and investors’ accounts experienced growth in the year, latest data from the Association of Mutual Funds in India (Amfi) showed.
According to the data, Gold ETFs witnessed an inflow of Rs 2,920 crore in the entire 2023, which was way higher than the Rs 459 crore inflow seen in 2022.
Notably, the segment attracted Rs 1,028 crore in August 2023, which was the highest inflow in 16 months.
The attractiveness of gold as a safe haven and a hedge against inflation enhanced significantly during the year. Investors turned to this traditional safe haven amid rising inflation, subsequent interest rate hikes, and geopolitical events, seeking a secure investment option.
“Higher inflation and subsequent hike in interest rates augured well for gold. Moreover, heightened geopolitical tension triggered due to the war between Israel and Hamas made it an attractive and safe investment destination for investors,” Himanshu Srivastava, Associate Director— Manager Research at Morningstar Investment Research India, said.