Beating all expectations, investors traded a record Rs 423 crore worth gold exchange traded fund (ETF) units at the NSE platform on the occasion of ‘Akshaya Tritiya' on Friday.
The value of units traded was more than double the Rs 172 crore on the same occasion last year.
The growing popularity of Gold ETFs can also be gauged from the fact that both the number of investors and the number of traded units on ‘Akshaya Tritiya' day have doubled over a year. Last year, on the auspicious occasion, the number of Gold ETF units traded at the National Stock Exchange (NSE) platform was a little over 10.5 lakh. This increased to 20 lakh units on Friday, data available with the NSE showed. From 41,000 investors last year, this year saw over 80,000 investors trading in Gold ETF units at the NSE platform.
Investor interest this year was also amplified in the run up to the ‘Akshaya Tritiya', with the total traded value of Gold ETFs touching a level of Rs 179 crore on Thursday. This trend was not visible in the run up to this auspicious day last year.
Part of the reason for the increased investor interest in Gold ETFs this year was that the two leading stock exchanges — NSE and the Bombay Stock Exchange (BSE) — had kept their trading platforms open till 9 p.m. The total traded volume at both the exchanges stood at about Rs 500 crore. Some softening in spot prices of gold also helped.
“This (extending the trading hours for Gold ETFs) has certainly helped create more volumes. This allowed many investors to invest after office hours. Gold ETF as a product itself is picking up,” said an exchange official familiar with the trading patterns.
Gold ETFs, as a product, have been available to investors since March 2007. The total traded value of Gold ETFs on the NSE for financial year 2006-07 stood at Rs 13.95 crore. This has grown manifold to Rs 4,074.3 crore for financial year 2010-11, an astounding growth of 313 per cent compounded annual growth rate (CAGR).
NSE had recently launched a Web site — http://www.nsegold.com — to create awareness among small and institutional investors on the advantages of Gold ETFs.
Gold prices have risen more than 22 per cent CAGR since April 2007. While 10 gm of gold coin cost Rs 9,357 in April 2007, it is now priced over Rs 20,000.