Gold exchange-traded funds (ETFs) have lost favour among investors as mutual fund managers pulled out ₹487 crore from these products in the first two months of the fiscal, according to data released by the Association of Mutual Funds in India.
Gold ETFs had seen significant outflows in the past two financial years, too. There was an outflow of around ₹1,475 crore from these products in 2014-15 and withdrawal of ₹2,293 crore by mutual fund managers in 2013-14. Market experts attributed the outflows in the ongoing fiscal, 2015-16, to poor returns offered by gold schemes, continuous weak prices, and negative outlook for the yellow metal amid strong equity markets.
The outflow led to the AUM of gold funds plunging by 23 per cent.